Logistics Design for

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Distribution Channel: To Create Time
and Place Utilities of Product to the
Customer

Logistics Management, 3e Author: Vinod V. Sople

 Learning Objectives

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• To understand structure of distribution channel

• To understand logistical requirements of distribution channel

• To understand role of logistics in distribution channel

• Logistical program variants for different channel partners

Logistics Management, 3e Author: Vinod V. Sople

Role of Logistics in Distribution Channel

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Helps in creating time and place utility of the
product

Movement of the product in the right quantity

whenever it is needed by the customer

Logistics Management, 3e Author: Vinod V. Sople

Distribution Channel Structure

Common Channel Structure

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Logistics Management, 3e Author: Vinod V. Sople
Channel Structure in Practice

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Logistics Management, 3e Author: Vinod V. Sople
 Channel Partners

• Wholesalers

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• Dealers
• Stockist
• Van dealers
• Selling agents
• Manufacturing agents
• Brokers
• Retailers

Logistics Management, 3e Author: Vinod V. Sople

 Distribution Task: Exchange Function

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• Buying

• Selling

• Title transfer

• Negotiations

Logistics Management, 3e Author: Vinod V. Sople

Channel Strategy

Length of the channel

Channel Breadth

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Marketing Strategy

Logistics Management, 3e Author: Vinod V. Sople

Logistics support to the distribution Channel

Logistics Service Level requirement planning

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Analyzing the cost benefits
Programs Implementing and Monitoring

Logistics Management, 3e Author: Vinod V. Sople

Containerization

It is a system of inter-modal cargo transport using standard ISO

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containers that can be loaded on containerships , railroad cars/trains
and trucks
Container capacity of Ships, Yards , Terminals are measured in TEU =
Twenty foot Equivalent Units or FEU = Forty foot Equivalent Units .

Logistics Management, 3e Author: Vinod V. Sople

International Standardization of shipping containers

In 1955, former trucking company owner Malcom McLean worked with

engineer Keith Tantlinger to develop the modern intermodal container.

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The challenge was to design a shipping container that could efficiently be
loaded onto ships and would hold securely on long sea voyages.

The result was a 8 feet (2.4 m) tall by 8 ft (2.4 m) wide box in 10 ft (3.0 m)-
long units constructed from 2.5 mm (0.098 in) thick corrugated steel.

The design incorporated a twistlock mechanism atop each of the four corners,

allowing the container to be easily secured and lifted using cranes.

This began international standardization of shipping containers.

Logistics Management, 3e Author: Vinod V. Sople

Benefits of Containerization

Establishment of dry port with container-handling facilities encourage

greater use of container.

Facilitation of multi-modal transport – from one transfer mode to

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another which take place safely, efficiently and speedily.

Complete suitability to door to door transport

Ease to transport of cargo on a combined transport bill of lading.

Lower to risk of damage, pilferage and loss of cargo during transit,

intermediate handling or storage.

Cargo can be sent in “ready to sell” or “consumer-ready” condition.

Logistics Management, 3e Author: Vinod V. Sople