DISTRIBUTION MANAGEMENT REVIEWER b) Protection. It ensures protection of the product.

The
contents of the package must be protected from damage or
LESSON: PACKAGING FOR MATERIALS HANDLING EFFICIENCY loss from outside environmental effects Logistics Management:
PACKAGING is the science, art and technology of enclosing or Components such as shock, moisture, dust, insects, and
protecting products/materials for distribution, storage, sale, contamination. This reduces the security risks of shipment.
and use. Packaging is typically viewed towards consumers with c) Apportionment. Packaging needs proper apportionment or
a marketing focus, and for industrial purposes with logistics division of the product into appropriate quantities. The output
focus. Packaging refers to a container in which the product must be reduced from industrial production to a manageable,
reaches the end user and is a part of the presentation of the desirable consumer size.
product that stays right till the customer takes it from the retail
store. d) Unitization. Primary packages can be unitized into
secondary packages (e.g., placed inside a corrugated case),
Packaging aims at: which can then be unitized into a stretch wrapped pallet, and
1. Product identification ultimately into a container loaded with several pallets. This
2. Product Protection reduces the number of times a product must be handled.
3. Product Promotion e) Convenience. Packaging allows products to be used
4. Product Information conveniently, that is with little wasted effort by customers.
5. Product Communication
f) Communication. Packages and labels communicate how to
For example, food packaging is done to ensure protection of use, transport, recycle, or dispose of the package or product.
food products from outside influences and damage, provide
information to the consumers on its ingredients, nutritional g) Marketing. The packaging and labels can be used by
information, cost, expiry date etc. marketers to encourage potential buyers to purchase the
product. Package design is an important and constantly
The functions of packaging are to: evolving feature.
a. Attract buyers’ attention. h) Sustainability. It facilitates sustainability. Returnable and
b. Protect goods inside the packaging. reusable packaging can be used repeatedly before it is
c. Give description of contents. recycled; some materials are engineered to be of
d. Explain the benefits of the goods inside. biodegradable material.
e. Provide warranty, warnings, and consumer
information. There are usually three levels of packaging required in a
f. Indicate value, price, and uses distribution system.

PACKAGING IS USED AS UNDER TO MOVE MATERIALS First is a primary package that holds the product. Next, for
THROUGHOUT THE VARIOUS STAGES OF LOGISTICS small packages, a shipping container such as a corrugated box
MANAGEMENT PROCESS: is needed. There is a third level of packaging where several
primary or secondary packages are assembled into a unit
a. Assembly: Protecting and holding components load. Typical applications include holding and protecting bulk
delivered in production processes. materials, cases, loads or individual items for shipping and
b. Automation: Automating systems require standardized receiving, organizing products in static or automated storage
trays or pans to function. systems, and acting as a receptacle to hold picked items for a
c. Transportation: Aggregating and protecting loads as discrete order.
they move through the supply chain.
d. Warehousing: Protecting products during storage. In general packaging is good if it fulfills the following
e. Holding Order: Holding stored products prior to their requirements:
delivery
1. Convenient
Packaging has following benefits: 2. Attractive
3. Economical
a) Containment. It facilitates containment of products before 4. Protective; and
they can be moved from one place to another. If the package 5. Communicative
breaks open, the item can be damaged or lost, or if it is a
hazardous material it can contribute to environmental pollution

TYPES OF PACKAGING
Packaging may be described in relation to the type of product
being packaged. It is sometimes convenient to categories
packages by layer or function primary (first envelops and
holds), secondary (outside) or tertiary (transit). The four
common types of packaging are:
1) Containers: Receptacles that hold, protect and organize
products and materials during storage and transport. They
come in a variety of forms, including bags, barrels, drums,
cartons, cases. Common materials Material Handling and
Packaging include corrugated cardboard, welded wire mesh,
metal (including steel and aluminum), corrugated plastic and
high-density polyethylene (HDPE) (most frequently used in the
construction of reusable and returnable containers).
2) Pallets: These made of wood, plastic, or metal (steel or
aluminum), provide a portable, horizontal, rigid platform that
serves as a base for unit loads. Pallets are used as a returnable,
reusable surface for assembling, storing, stacking, and handling
and transporting of goods as a unit load.
3) Dunnage: These are materials or devices used in the
securing and/or bracing of products during shipments. Since it
is impractical for most facilities to stock multiple container sizes
to accommodate shipping different product weights and sizes,
most items get shipped in big boxes.
4) Unitizers: Materials that hold several items together to form
a complete load.
PACKAGING MATERIAL
There are various types of materials available for packaging of
the goods. These materials are paper, plastics, wood,
cardboard etc. The selection of the packaging materials should
be made keeping in view primarily the specifications required
for the consumer. The selection of the packaging materials
would depend upon the following factors:
a. Product characteristics.
b. Transportation and storage methods.
c. Climate
d. Standards and environmental considerations.
e. Market position
LESSON: THE NATURE OF INVENTORY
What Is Inventory Management?
Inventory management helps companies identify which and
how much stock to order at what time. It tracks inventory from
purchase to the sale of goods. The practice identifies and
responds to trends to ensure there’s always enough stock to
fulfill customer orders and proper warning of a shortage.
Once sold, inventory becomes revenue. Before it sells,
inventory (although reported as an asset on the balance sheet)
ties up cash. Therefore, too much stock costs money and
reduces cash flow.
One measurement of good inventory management is inventory
turnover. An accounting measurement, inventory turnover
reflects how often stock is sold in a period. A business does not
want more stock than sales. Poor inventory turnover can lead
to deadstock, or unsold stock.
Why Is Inventory Management Important?
Inventory management is vital to a company’s health because it
helps make sure there is rarely too much or too little stock on
hand, limiting the risk of stockouts and inaccurate records.
Public companies must track inventory as a requirement for
compliance with Securities and Exchange Commission (SEC)
rules and the Sarbanes-Oxley (SOX) Act. Companies must
document their management processes to prove compliance.
BENEFITS OF INVENTORY MANAGEMENT
The two main benefits of inventory management are that it
ensures you’re able to fulfill incoming or open orders and raises
profits. Inventory management also:
Saves Money: Understanding stock trends means you see how
much of and where you have something in stock so you’re
better able to use the stock you have. This also allows you to
keep less stock at each location (store, warehouse), as you’re
able to pull from anywhere to fulfill orders — all of this
decreases costs tied up in inventory and decreases the amount
of stock that goes unsold before it’s obsolete.
Improves Cash Flow: With proper inventory management, you
spend money on inventory that sells, so cash is always moving
through the business.
Satisfies Customers: One element of developing loyal
customers is ensuring they receive the items they want without
waiting.
INVENTORY MANAGEMENT CHALLENGES
The primary challenges of inventory management are having
too much inventory and not being able to sell it, not having
enough inventory to fulfill orders, and not understanding what
items you have in inventory and where they’re located. Other
obstacles include:
Getting Accurate Stock Details: If you don’t have accurate
stock details, there’s no way to know when to refill stock or
which stock moves well.
Poor Processes: Outdated or manual processes can make work
error-prone and slow down operations.
Changing Customer Demand: Customer tastes and needs
change constantly. If your system can’t track trends, how will
you know when their preferences change and why?
Using Warehouse Space Well: Staff wastes time if like products
are hard to locate. Mastering inventory management can help
eliminate this challenge.
WHAT IS INVENTORY?
Inventory is the raw materials, components and finished goods
a company sells or uses in production. Accounting considers
inventory an asset. Accountants use the information about
stock levels to record the correct valuations on the balance
sheet.
INVENTORY VS. STOCK
Inventory is often called stock in retail businesses: Managers
frequently use the term “stock on hand” to refer to products
like apparel and housewares. Across industries, “inventory”
more broadly refers to stored sales goods and raw materials
and parts used in production.
Some people also say that the word “stock” is used more
commonly in the U.K. to refer to inventory. While there is a
difference between the two, the terms inventory and stock are
often interchangeable.
WHAT ARE THE DIFFERENT TYPES OF INVENTORIES?
There are 12 different types of inventories: raw materials,
work-in-progress (WIP), finished goods, decoupling inventory,
safety stock, packing materials, cycle inventory, service
inventory, transit, theoretical, excess and maintenance, repair
and operations (MRO). Some people do not recognize MRO as
a type of inventory.
INVENTORY MANAGEMENT PROCESS
If you produce on demand, the inventory management process
starts when a company receives a customer order and
continues until the order ships. Otherwise, the process begins
when you forecast your demand and then place POs for the
required raw materials or components. Other parts of the
process include analyzing sales trends and organizing the
storage of products in warehouses.
HOW INVENTORY MANAGEMENT WORKS
The goal of inventory management is to understand stock
levels and stock’s location in warehouses. Inventory
management software tracks the flow of products from
supplier through the production process to the customer. In
the warehouse, inventory management tracks stock receipt,
picking, packing and shipping.
INVENTORY MANAGEMENT TECHNIQUES AND TERMS
Some inventory management techniques use formulas and
analysis to plan stock. Others rely on procedures. All methods
aim to improve accuracy. The techniques a company uses
depend on its needs and stock.
FIND OUT WHICH TECHNIQUE WORKS BEST FOR YOUR
BUSINESS BY READING THE GUIDE TO INVENTORY
MANAGEMENT TECHNIQUES.
HERE’S A SUMMARY OF THEM:
ABC Analysis: This method works by identifying the most and
least popular types of stock.
Batch Tracking: This method groups similar items to track
expiration dates and trace defective items.
Bulk Shipments: This method considers unpacked materials
that suppliers load directly into ships or trucks. It involves
buying, storing and shipping inventory in bulk.
Consignment: When practicing consignment inventory
management, your business won’t pay its supplier until a given
product is sold. That supplier also retains ownership of the
inventory until your company sells it.
Cross-Docking: Using this method, you’ll unload items directly
from a supplier truck to the delivery truck. Warehousing is
essentially eliminated.
Demand Forecasting: This form of predictive analytics helps
predict customer demand.
Drop shipping: In the practice of drop shipping, the supplier
ships items directly from its warehouse to the customer.
Economic Order Quantity (EOQ): This formula shows exactly
how much inventory a company should order to reduce holding
and other costs.
FIFO and LIFO: First in, first out (FIFO) means you move the
oldest stock first. Last in, first out (LIFO) considers that prices
always rise, so the most recently purchased inventory is the
most expensive and thus sold first.
Just-In-Time Inventory (JIT): Companies use this method in an
effort to maintain the lowest stock levels possible before a
refill.
Lean Manufacturing: This methodology focuses on removing
waste or any item that does not provide value to the customer
from the manufacturing system.
Materials Requirements Planning (MRP): This system handles
planning, scheduling and inventory control for manufacturing.
Minimum Order Quantity: A company that relies on minimum
order quantity will order minimum amounts of inventory from
wholesalers in each order to keep costs low.
Reorder Point Formula: Businesses use this formula to find the
minimum amount of stock they should have before reordering,
then manage their inventory accordingly.
Perpetual Inventory Management: This technique entails
recording stock sales and usage in real-time.
Safety Stock: An inventory management ethos that prioritizes
safety stock will ensure there’s always extra stock set aside in
case the company can’t replenish those items.
Six Sigma: This is a data-based method for removing waste
from businesses as it relates to inventory.
Lean Six Sigma: This method combines lean management and
Six Sigma practices to remove waste and raise efficiency.
YOUR COMPLETE GUIDE TO INVENTORY FORECASTING
Effective inventory forecasting can mean the difference
between profitability and piles of unsold goods that eat up
your available cash. The bottom-line impact of inventory
forecasting is clear: less money is tied up in inventory, stock is
maintained at a realistic threshold and ordering becomes much
more precise.
INVENTORY VS. CYCLE COUNTING
“Taking inventory” is the process of physically counting all
stock, once a year in most cases. Cycle counting is the practice
of counting a selected set of stock more often. Cycle counting
serves as an important means of checks and balances to ensure
the amount of inventory represented in the inventory
management system is what you have on the shelf.
A cycle counting best practice is to count specific SKUs regularly
and integrate it into the daily tasks of warehouse staff.
Companies may determine different standards for different
types of inventory, such as performing a cycle count of top-
moving SKUs or higher-value items. Learn more about the
benefits of cycle counting.
DEMAND PLANNING AND INVENTORY MANAGEMENT
Demand planning is an important part of successful inventory
management. It is the process of determining how much of
each item you anticipate selling, and when. Once demand is
determined, inventory management follows the flow of goods
from the supplier through production and ultimately fulfilling
customer orders.
INVENTORY MANAGEMENT FORMULAS
 Inventory Management KPIs
Effective inventory management plays an important
role throughout the supply chain. There are many key
performance indicators for measuring inventory
management success throughout the different
organizations in the business. Understanding which
calculations return the most insight into your business
processes is important. To learn more, see inventory
management KPIs.
 Award Winning
 Cloud Inventory
 Free Product Tour
HOW IS INVENTORY MANAGEMENT DIFFERENT FROM OTHER
PROCESSES?
People sometimes confuse inventory management with related
practices. Inventory management controls all stock within a
company. Supply chain management manages the process
from supplier to delivering the product to the customer.
Warehouse management is a part of inventory control and
focuses on stock in a specific location.
INVENTORY MANAGEMENT VS. INVENTORY CONTROL
inventory control is a part of the overall inventory management
process. Inventory control manages the movement of items
within the warehouse.
INVENTORY MANAGEMENT VS. INVENTORY OPTIMIZATION
Inventory optimization is the process of using inventory in the
most efficient way, and as a result minimizing the dollars spent
on stock and storing those items.
You can also think about inventory optimization as seeing
inventory across all locations and selling channels, being able
to use any of it to fulfill customer orders—in doing so, you can
hold less stock overall.
INVENTORY MANAGEMENT VS. ORDER MANAGEMENT
Inventory management is responsible for ordering and tracking
stock as it arrives at the warehouse.
Order management is the process of receiving and tracking
customer orders. Software often combines both tasks.
Inventory management plays an important role in order
management. As orders are received, inventory can be
allocated to specific orders, and then the status can be changed
in the inventory record to essentially put it “on hold” for that
order. Furthermore, when the order management system and
inventory system are integrated, the inventory system can
recommend which location should fulfill the order, based on
where all the items in the order are available—this eliminates
multiple shipments for a single order.
INVENTORY MANAGEMENT VS. SUPPLY CHAIN
MANAGEMENT
Supply chain management is a process of managing supply
relationships outside a company and the flow of stock into and
through a company. Inventory management may focus on
trends and orders for the company or a part of the company.
Inventory management is essential for a properly running
supply chain. Inventory management follows the flow of goods
to, through and out of the warehouse. The supply chain
includes demand planning, procurement, production, quality,
fulfillment, warehousing and customer service—all of which
require inventory visibility.
INVENTORY MANAGEMENT VS. WAREHOUSE MANAGEMENT
Warehouse management complements inventory
management. Warehouse management organizes stock in a
warehouse. Inventory management manages stock and trends
for many warehouses or an entire company.
The key to streamlining your warehouse operations is a
thoughtfully laid out and meticulously organized facility. When
each product has a specific place in the warehouse, it prevents
staff from moving about inefficiently and maximizes labor
efficiency. But these processes are only as good as the
inventory records that drive them.
INVENTORY MANAGEMENT VS. LOGISTICS
Logistics is the practice of controlling processes in a warehouse
and in the replenishment and delivery systems. Inventory
management maintains stock levels and manages stock
location.
Inventory management is a crucial part of how companies
manipulate their logistics. The relationship between inventory
management and logistics is interdependent. Logistics need
inventory management to perform their activities. Good
logistics systems improve warehouse and operational activities.
INVENTORY MANAGEMENT VS. ERP
An enterprise resource planning (ERP) system is software that
manages business activities such as accounting, purchasing,
compliance and supply chain operations. By contrast, inventory
management is a part of a modern ERP system, providing
insight into stock levels, inventory en-route and the status of
current inventory—this makes it visible across the organization
in real time.
Inventory management helps to properly plan a company’s
replenishment orders. ERP systems give companies accurate
inventory data, so they have the most current information for
their inventory management plan. ERP systems optimize the
data so inventory management is successful.
RETAIL INVENTORY MANAGEMENT
Retail inventory is the stocking of products that you sell to
consumers. Use the system to set profitable prices and ensure
you have the right amount of stock to meet demand.
MANUFACTURING INVENTORY MANAGEMENT
Manufacturing inventory management is the practice of
keeping enough stock on hand so production lines can fulfill
orders. The process helps managers see stock levels at a glance
and tracks raw materials, parts, work-in-progress and finished
goods.
WHAT IS MULTI-LOCATION INVENTORY MANAGEMENT?
Multi-location inventory management is the process of
managing stock across multiple locations, warehouses, and
retail stores or across multiple selling channels. With multi-
location management, you can watch stock levels in all
locations and optimize your inventory to fulfill orders.
WHAT IS AN INVENTORY MANAGEMENT SYSTEM?
An inventory management system combines varying software
packages to track stock levels and stock movements. The
solution can integrate with multichannel sales systems or
shipping systems.
An inventory management system optimizes inventory levels
and ensures product availability across multiple channels. It
provides a single, real-time view of items, inventory and orders
across all locations and selling channels. This enables
businesses to carry less inventory on hand and frees up cash to
be used in other parts of the business. An inventory
management system helps keep inventory costs low while
delivering on customer expectations.
LESSON: ROLE OF INFORMATION TECHNOLOGY IN SUPPLY
CHAIN MANAGEMENT
Role of IT In Supply Chain Management
In today's modern era IT will play an important role in every
sector mainly in supply chain management. IT will use in many
different sectors like transaction execution, collaboration and
coordination and decision support. With the help of IT
companies can create better visibility performance of the
supply chain, which will gives us to more control over business
and also stay ahead of the competition than other companies.
IT will help to enable your business to operate more efficiently,
help to reduce many different operational expenses.
Additionally, through a more stable and efficient supply chain,
you can greatly enhance customer satisfaction and retention.
Here are just a few ways to integrate modern technologies into
your business model and improve your supply chain
management.
SHIPPING AND TRACKING
With the help of the latest technologies and internet-based
software companies can create simple supply processes and
decreasing the shipping problems. Software like flash view
gives us option to relating all aspects of their supply chain in
one place. The software will allow us to digitalize our all data
like inventory, tracking option, electronic invoices etc. With the
help of IT in supply chain management we can easily reduce
the time spent shipping, receiving, tracking and compiling
order data, which will easily save the company's time and
money. Flash views will easily giving the good experience to the
customer with the ability to track their order status. If we
talking about these days having technology like flash view is
helpful for the company as well as consumer also.
USE OF SOCIAL MEDIA
Asocial networking site is a famous tool for every enterprise to
increase their company's share in the market. Over 288 million
Twitter users and 1.23 billion Facebook users, it is a huge
amount in which company gain visibility will improved quickly.
Over 70 percent of all 400 companies depend upon the social
media for their products marketing. According to social media
companies will prepare their marketing strategy and supply
chain management. With the help of social media company's
can easily communicate with the customers, increase the
visibility of your company, know about the demand of the
customers, prepare cost effective products, reduce other
expenses so that company will easily enhance their overall
productivity. With the help of social media companies will
easily interact with the customers, know their feedback, give
their delivery schedule about their products different updates
also.
SIMPLIFY YOUR SUPPLY CHAIN
With the help of IT company will easily simplify their supply
chain because through technology they will easily collect the
data like delivery schedule, weather forecasting so that the
company will not face any type of loss from customers. Mainly
companies will take the help of IT to select their delivery area
so that the customer does not face any difficulty to collect their
order. They will easily collect their order time or before time. If
we talking about companies production the company will
always select that area which will consumed less time to
provide raw material so that company will easily manage their
supply chain at the time of production as well as delivered
finished goods.
LIMITATIONS
Traceability: recent events like food safety with India's fast
food suppliers like KFC, Dominos, Pizza hut suppliers has does
not have proper equipment to trace the order by customers.
Similar to supply chain visibility, global and complex supply
chains make it very difficult to quickly and efficiently trace
materials back through the supply chain.
Complexity: When any company will going for reduce the cost
supply chains can become very complex, creating an intricate
web of global third parties when company will attempting to
track and control supply chain in that case the complexity is
very challenging, creating many other problems also.
Supplier Performance: Suppliers freeze on costs and tight
delivery times so that they does not reduce the cost of raw
materials which was not good for companies. In that case
company does not fulfill the demand according to the demand.
Sometime supplier performance will also affects the supply
chain management.
Natural Disasters (e.g. extreme weather, earthquakes, floods):
There is also a little bit confusion about the weather patterns
and weather events because of global warming. Natural
disasters like typhoons, floods, earthquakes, volcanoes had
creating a negative impact on location as well as duration also.
It will create a problem for the company as well as customers
also.
Technology: In the modern era technology will easily improve
the supply chain performance but daily updated technology
will create a more expenses on technology. This was harmful
for the company. If technology will not properly worked,
cannot be managed properly then it can be the biggest
problem for the company because everyone does not have
proper knowledge updated technology.
Cyber Risks / IT Issues: We will talk about the IT in supply chain
management. But cyber risks will also a big issue for every
company. Supply chains depend upon the flow of information
up and down the value chain, and integrity of that information.
Cyber-attacks are a constant threat and can result in loss of
commercial information, exposure to stolen confidential
information and an inability to conduct business for some
period of time.
LESSON: THE ROLE OF TRANSPORTATION IN PURCHASING
Transportation, the movement of goods and persons from
place to place and the various means by which such movement
is accomplished
SCOPE OF THE IMPORTANCE OF TRANSPORTATION
In more recent history, industrialization popularized the use of
trains and rail freight, and further scientific development led to
the invention of motor vehicles, aircraft, and even spacecraft.
Can you even imagine a world without cars, vans, and trucks,
or travelling by buses, trains, or airplanes?
GETTING THE RIGHT PRODUCT TO THE RIGHT PLACE AT THE
RIGHT TIME
THE ROLE OF TRANSPORTATION IS TO INCREASE THE
EFFICIENCY OF YOUR OPERATIONS BY GETTING RAW
MATERIALS, INTERMEDIATE PRODUCTS AND FINISHED GOODS
FROM THEIR POINT OF ORIGIN TO THEIR DESTINATION.
IMPORTANCE OF TRANSPORTATION
 TRANSPORTATION FOR WORK / JOB
 TRANSPORTATION FOR CONNECTIVITY
 TRANSPORTATION FOR CONVENIENCE
 TRANSPORTATION FOR WELLBEING
 TRANSPORTATION FOR MOVEMENT OF GOOD
4 ROLE OF TRANSPORTATION 4 IN PURCHASING
1. TRANSPORTATION ALLOWS FOR BETTER INVENTORY FLOW
 Effective transportation management keeps your
inventory lean, thereby making the flow of stock
through your warehouses much smoother and more
efficient.
2. TRANSPORTATION ENHANCES CUSTOMER SATISFACTION
 Making sure finished products reach a customer on
time and in the condition they were shipped in is an
essential aspect of transportation management.
3. TRANSPORTATION IS USED TO BYPASS GEOGRAPHICAL
BARRIERS
 Transportation makes goods available to consumers no
matter where they are. The success of your supply
chain depends on the strategic use of an appropriate
transportation system
4. TRANSPORTATION IS USED TO SEGMENTSHIPMENTS BASED
ON PRIORITY
 Every shipment will have varying degrees of priority
depending on the customers, products, and time of
year, among other factors.
LESSON: THE ROLE OF PACKAGING IN DISTRIBUTION
MANAGEMENT
Packaging is sometimes seen as a necessary evil
COORDINATED SYSTEM OF PREPARING GOODS FOR
1. Safe
2. Cost-effective
3. Efficient movement
EVENTUALLY LEADS TO MAXIMIZING CONSUMER
1. Value,
2. Sales,
3. And Hence Profits.
In fact, packaging design has recently developed into a mature
communication discipline on its own – and clients now realize
that packaging is a critical and central element in the creation
of an effective brand identity
In order to achieve successful distribution management,
packaging systems have to be connected with aspects of:
1. Marketing,
2. Logistics,
3. Productions,
4. And The Environment.
IMPORTANCE OF PACKAGING IN DISTRIBUTION
1. Products Are Protected
 Products that get damaged in the transportation
process can create significant difficulties.
 It will not only cost you the value of the damaged
product and shipping cost but, there is also a possibility
you will also need to send replacements.
2. Give vital information to the customers
 A distributor requires a lot of information about the
product.
 And transportation packaging is a suitable position to
display the same. Numerous things can be printed on
the packaging boxes
3. Good packaging makes the storage of goods possible
 Suitable packaging allows storing of products easily.
  It really does not matter what the size of the product,
or how delicate a product is if the right packaging is
done. costs.

4. Product packaging can even help you in increasing your

sales figures

 If the packaging of your product is retail ready, your

goods can be displayed on the counters in their custom
display.