Role of Warehousing in Physical Distirbution System

Topics: Distribution, retailing, and wholesaling, Inventory, Supply chain management Pages: 2 (504 words) Published: June 21, 2013
Role of Warehousing in Physical Distribution System

Physical distribution is the movement of materials from the producer to the consumer.  This movement of materials is divided into two functions: Physical supply is the movement and storage of goods from suppliers to manufacturing. Physical distribution is the movement and storage of finished goods from the end of production to the customer.  The particular path in which the goods move through distribution centers, wholesalers, and retailers is called the channel of distribution. A channel of distribution is one or more companies or individuals who participate in the flow of goods and/or services from the producer to the final user or consumer. The transaction channel is concerned with the transfer of ownership.  Its function is to negotiate, sell, and contract.  The distribution channel is concerned with the transfer or delivery of the goods or services.

To a large extend market requires a well-run distribution system.  Distribution adds place value and time value by placing goods in markets where they are available to the consumer at the time the consumer wants them.  The specific way in which materials move depends upon many factors, some of which are the channels of distribution that the firm is using, the types of markets served, the characteristics of the product, and the type of transportation available to move the material.

Role of warehousing:

The service functions warehouses perform can be classified into two kinds: (1) General warehouse where goods are stored for long periods and where the prime purpose is to protect goods until they are needed.  (2) The distribution warehouse has a dynamic purpose of movement and mixing.  The emphasis is on movement and handling rather than storage.  The size of the warehouse is not so much its physical size as it is the throughput, or volume of traffic handled.  Items should be warehoused only if there is an offsetting benefit gained from storing them....
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