DISTRIBUTION &

WARE-HOUSE
MANAGEMENT
DISTRIBUTION MANAGEMENT
BACK-GROUND
 Retail Boom
 Rise of SCM concept
 Globalization – out-sourcing, out-shoring
 Product customisation – Basic unit, modular fits
for product variation, accessories, add-ons e.g.
DELL
 FGs, sub-assemblies, components moving long
distances involving:
 Ware-houses
 Transportation
 Visibility of inv
 Distribution design &
ware-house function

F1

F1,F2,F3
Ware-house 1

F2

F1,F2,F3
Ware-house 2

F3
Break-bulk eg: Fertilizers, oil & chemicals
Cross docking: Eg: Retails outlets
Mixing , Eg:
 WARE-HOUSING
 ‘FIT’ in the Supply Chain Management (SCM)
 Value addition carried out
 Order filling
 Packing
 Labeling
 Feature fitments (modular)
 Placing of warranty cards, instr manual, discount brochures,
company literature; in the package
 Type, location of ware-house(s)
 Nature of items handled
 Duration of storage & avg inv
 Up and Down linkages
 Road, air and sea connectivity
 MHE and facilities required
 TYPES OF WARE-HOUSING
 Range of items-wise, TVs in one and other
electronic goods in another
 Region/area-wise – hub & spoke model
 Co-location with factory – Mother W/H
 Leveraging tax benefits e.g. Baddi,
Gauhati
 FACILITIES AT WARE-HOUSE
 Safety and Security
 Fire and theft precautions
 Computerized inv mgt, Visibility of inv
 Fitment and assembly of final product
 Basic unit plus required modules, accessories as per
customer’s order
 Inter-ware-house transfers, rush calls to Prod Mgr,
OEMs
 Tie-up with tpt/courier co – hot and fail-proof
 Control & Mgt of orders
 DISTRIBUTION REQUIREMENT
PLANNING (DRP)
 Factors:
 Demand pattern
 Safety stocks
 Order qty
 Re-order point
 Av performance cycle period
 Pre-requisites;
 Accurate sales forecasts wrt loc & time
 Consistent performance cycle
 DISTRIBUTION REQUIREMENT
PLANNING (DRP)

 Benefits of DRP
 Improved customer service
 Focus /prioritisation in marketing efforts
e.g. Hero Honda. Inv level of model CBZ
was critically low and Cruiser inv was stock-piling. – A
slew of schemes followed to enhance sales of
Cruiser.
 Reduction in inv levels
 Optimisation of tpt loads
 Reduction in tpt costs
 Works as a sub-system of ERP
Distribution Channel structures

 M C
 M R C
 M W R C
 M A/D W R C

M = Manufacturer C = Consumer R = Retailer

W = Wholesaler A = C & F Agent D = Distributor
 SPEED AND ACCURACY IN
ORDER FULFILLMENT
 Order registration – complete and giving
specific details of optionals/choices
 Indication of expected delivery time to
customer. E.g. for ex-stock issues, five
working days is a norm. Generally,
delivery takes place on the third day.
 At ware-house :
 Track AWB/DC till received by customer
 An example
of Order fulfillment
 Godrej & Boyce Co
Order No.459 dtd10 Mar 2009, 1740 hrs
 Customer : Mr. Ashish Mahajan (Dealer)
B-12, Kapil Society
44, JN Apte Road
Pune- 411008
Mob – 9898952727
 Refrigerator- Freedom, 300 Ltr, Ash grey,
Qty- 04, with stabilizer S-4 Qty-4 and
Handle protector Qty-04.
 Order Processing
 0900h,10 Mar 09 : Stock availability
checked.
 Freedom 300 Ltr- qty 156 - To be painted as per customer’s choice
 Stabiliser S 4 – qty 02 - Obtain from OEM M/S JP Electricals
 Handle Protector – qty 156
 1000h,10 Mar 09 : 04 Freedom 300 ltr Fridges sent to Paint
shop, with color requisition- Ash grey, Order placed for S-4
stabilizers Qty 02, from M/s JP Electricals
 1100h,10 Mar 09 : Handle protectors Qty 04 issued and
H/O to Pkg & Dispatch.
 1500h,11 Mar 09 : Painting completed, fridges sent to Pkg
& Dispatch
 1800h,11 Mar 09 : Stabilizer S-4 qty-02 recvd from JP Elec.
 1000h, 12 Mar 09 : At Pkg & Dispatch Dept
 Follow-up by Sales Dept
 Received DC No 456 / 11 Mar 08, Overnite
 Tracked the consignment
 1500 h, 13 Mar 08, Consignment delivered
to the customer
 Called up customer 1000 h 14 Mar 08.
Checked safe receipt, if any assistance
required.
 1000 h, 21 Mar 08. Called customer. both
fridges checked, working well. Customer
happy.
 Noida, Delhi
N

Kolkota
DC
DC

Ahmedabad
DC DC

DC
HUB & SPOKE MODEL
Mumbai
Pune

DC DC
Order No459
Chennai
DC
 AT WARE-HOUSE
 Check order, break-down into FGs/items in inv, inform
relevant storekeeper(s) to issue FGs/items
 Forward order copy to Assembly and Packaging Dept
 FGs/items issued & sent to Assy & Pkg.
 Assembly completed, verified against the order
 Documentation, warranty cert, quality cert, operator’s
manual placed in the pkg
 Labeling, strip-binding, RFID, Add, tele of customer
endorsed on pkg
 Hand over to tpt/courier co
 Obtain AWB/DC No
 Inform Sales dept & Customer
 At Pkg & Dispatch dept
 1200 h, 12 Mar 09 : Final check on Correctness
of consignment done.
 1400 h- placement of customer’s order copy,
invoice copy, warranty cards, Operator’s
manuals, Cautionary stickers.
 1430 h- Packed in cartons, transit safety labels
pasted, laminated Labels with Add, tele of
customer stapled on the carton
 1600 h, 12 Mar 09 : Consignment h/o to
Overnight courier. DC no. P 456 dt 11 Mar 09