15-Sep-15

Supply Chain Management

SESSION 2

PHYSICAL DISTRIBUTION &

LOGISTICS

Physical Distribution
Cover of this topic
1.

Physical Distribution .

2.

Activities in Physical Distribution.

3.

Channel Distribution

4.

Objects of Physical Distribution

5.

Order Processing.

6.

Transportation.

7.

Warehousing

8.

Packaging

9.

Material Handling

1
Print to PDF without this message by purchasing novaPDF (http://www.novapdf.com/)

15-Sep-15

Physical Distribution
Physical distribution is responsible for delivering to the customer what is
wanted on time & at minimum cost
The Objective of distribution management is to design & operate a
distribution system that attains the required level of customer services &
does so at least cost
TYPES

Physical Supply
goods moving from supplier to manufacturer
inbound

Physical Distribution
goods moving from manufacturer to customers
outbound

Physical Distribution

2
Print to PDF without this message by purchasing novaPDF (http://www.novapdf.com/)

15-Sep-15

Activities in Physical Distribution

Transportation: It involves various methods of
moving goods outside the firms building
Distribution Inventory: It includes all finished
goods inventory at any point in the distribution
system
Materials Handling: It is the movement of stored
goods inside the distribution center
Packaging: Goods moving in a distribution system
must be contained protected & identified
Order Processing: It includes all activities needed
to fill customers orders

Channels of Distribution
A Channel Distribution is one or more companies or
individuals who participate in the flow of goods or services
from the producer to final customer
TYPES
Company may deliver directly to customers
Use other companies or individuals to deliver goods
Intermediaries
wholesalers
transportation companies

agents
warehouses

3
Print to PDF without this message by purchasing novaPDF (http://www.novapdf.com/)

15-Sep-15

Object of Physical
Distribution
1. Total Cost Concept
2. Customer Service Concept
a. Time
b. Dependability
c. Communication
d. Convenience
e. Accuracy
3. Distribution Cost-Service trade offs
a. Achieve right balance between them
b. Flexibility is important in balancing the cost and
service

Order Processing
a.

Verifying Customers Credibility

b.

Checking for any outstanding payment

c.

Monitoring stock level

d.

Preparing invoice

e.

Arranging transporter

f.

Sending the consignment and information

4
Print to PDF without this message by purchasing novaPDF (http://www.novapdf.com/)

15-Sep-15

Transportation
i.

Transportation brings together raw materials for

production of marketable commodities & distributes the
products of industry to the marketplace

FACTORS
i.

Suitability or nature of product

ii.

Affordability

iii. Availability
iv. Customers specifications
v.

Competitors transportation model

Warehousing
Warehouses include plant warehouses, regional
warehouses, and local warehouses.
The service function that warehouses perform can be
classified into two kinds:
General Warehouse: where goods are stored for long
periods & where the prime purpose is to protect goods until
they are needed
Distribution Warehouse: It has dynamic purpose & mixing.
Goods are received in large volume uniform lots, stored
briefly & then broken down into small individual orders
Role of Warehouse: Transportation Consolidation, Product
mixing, Service

5
Print to PDF without this message by purchasing novaPDF (http://www.novapdf.com/)

15-Sep-15

Packaging
The basic role of packaging in any industry is to carry the
goods safely through a distribution system to the customer.
The Package must do following:
Identify the Product
Contain & Protect the product
Contribute to physical distribution efficiency
Role: Protect the product against shock, compression,
vibration, moisture, heat, solar radiation, oxidation,
animals, bacterias etc
Atleast 3 levels of packaging: Primary Packaging to hold
product, next for small packages shipping container is
needed, thirdly several primary or sec packages are
assembled into unit load

Materials Handling
Materials handling is short distance movement that takes
place in or around a building such as plant or distribution
center
Objectives:
To increase cube utilization by using the height of building &
by reducing space
To improve operating efficiency by reducing handling
To improve the service levels by increasing the speed of
response to customer needs
TYPES:
Conveyors, Industrial Trucks, Cranes & Hoists

6
Print to PDF without this message by purchasing novaPDF (http://www.novapdf.com/)