DISTRIBUTION MANAGEMENT

Distribution Management

refers to the process of overseeing the movement of goods from supplier or manufacturer to point of sale.

Distribution Management

It is an overarching term that refers to numerous activities and processes such as Supply Chain, Inventory, Warehousing, Logistics

Advantages of Distribution Strategy

- it keeps things organized

- it makes things easier for the consumer

- it also alleviates any potential for errors in delivery, as well as the times products need to be delivered

Unit Perishability

if it’s perishable item then time is of the essence to prevent loss.

Product Mix Forecasting

optimal product mixes vary according to seasons and weather or other factors.

Buyer Purchasing Habits

peaks and troughs in purchasing habits can influence distribution patterns and therefore varying distribution needs that can be predicted.

Truckload Optimization

relies on logistics and fleet management software to ensure very truck is full-to-capacity and routed according to the most efficient path.

Buyer Requirements

e.g. changes in a retailer’s or manufacturer’s just in time inventory demands.

Supply Chain Management

is the centralized management of the flow of goods and services and includes all processes that transform raw materials into final products.

Parts of Supply Chain Management

• planning

• sourcing

• executing/manufacturing

• delivering

• returning

Planning

the process usually begins with planning to match supply with customer and manufacturing demands

Sourcing

entails working with vendors to supply the raw materials needed throughout the manufacturing process

Executing/Manufacturing

the company transfers raw materials by using machinery, labor, or other external forces to make something new

Delivering

the distribution process is often seen as a brand image contributor, as up until this point, the customer has not yet interacted with the product

Returning

it is a process that concludes with support for the product and customer returns

Inventory Management

refers to the process of ordering, storing, using, and selling a company’s inventory

Inventory Management

this includes the management of raw materials, components, and finished products, as well as warehousing and processing of such items

Benefits of Inventory Management

• Saves money

• Impoves cash flow

• Satisfies customers

Warehousing

the process of storing physical inventory for sale or distribution. This are used by all different types of businesses that need to temporarily store products in bulk before either shipping them to other locations or individually to end consumers

Logistics

refers to the overall process of managing how resources are acquired, stored, and transported to their final destination

Logistics Management

involves identifying prospective distributors and suppliers and determining their effectiveness and accessibility

Supply Chain

a _________ is a system of individuals who work together to produce and distribute goods and services

Components of Supply Chain

• supplier

• manufacturer

• distributors

• retailers

• consumers

Continuous Flow Model

managers must routinely restock raw materials in a continuous flow approach to avoid production bottlenecks

Fast Chain Model

companies who sell products based on the newest trends and will benefit the most

Flexible Model

businesses who produce seasonal goods frequently use this model. It guarantees that businesses can ramp up rapidly to start production and shut down successfully as soon as demand starts to decline

Logistics

 the total process of controlling the acquisition, storage, and delivery of resources to their intended location is known as logistics

Importance of Logistics to Supply Chain

1. Delivering right products at the right time

2. Reducing cost and improving efficiency

3. Helping retain customers and increase loyalty

4. Providing a means to deliver goods from the most cost-effective location for production to the location of the customer

Material Management

a more efficient way of handling commodities or input from businesses. It is crucial for every industry whose supply chain management entails distributing and delivering a large amount of raw materials as a result

Production and the Management of Materials

the needs for various materials and components are established using production schedules

Purchasing

buying something is only one aspect of the ____________ process

Transportation

the goal is securing affordable and useful transportation options for the commodities

Receiving

one of their tasks is to inform the purchasing department about the arrival of various materials

Material Requirement Planning

it is a project-planning, inventory, and scheduling

Enterprise Resource Planning

it is an updated version of MRP. It includes the planning of all business-related activities

Logistics Management

is the process of managing the activities that are required to transport goods from its source to the final customer. It is used for tangible goods such as raw materials, finished products, equipment, and machinery to food or other consumable items.

Logistic Activities

- order processing

- material handling

- packaging

- warehousing

- transportation

- customer service management

7Rs of Logistics

- Right Product

- Right Quantity

- Right Condition

- Right Place

- Right Time

- Right Customer

- Right Price

Materials Requirements Planning

is a software-based integrated inventory and supply management system designed for businesses

MRP Inputs

• Product type

• Quantity and delivery

• Inventory status file

• Shelf life of stored materials

• Bills of materials

MRP Outputs

• Purchase orders

• Material plan

• Work orders

• Reports

Storage, Warehousing, Materials Handling

economical and secure storage of products. is the activity of storing goods that are not currently in use or may be needed in the near future

Bonded Warehousing

products imported into a country are processed and stored, can be owned by the government or privately

Public Warehousing

held by third-party logistics firms and accessible to the general public, can be rented for short-term or long-term

Private Warehousing

owned and operated by a business alone, no involvement from a third party

Refrigerated Warehousing

keeps warehouse temperatures within a specific range to protect the integrity of items

Material Handling

refers to machines that make it easy to move cargo or automate handling.

Packaging and Labelling

is the process of creating product containers and designing the package to provide protection during delivery

Primary Packaging

the product comes into direct contact with this type of packaging and is sold along with it

Secondary Packaging

additional layers of packaging to prevent damage, commonly used for fragile or prone-to-leakage products

Tertiary Packaging

handles and transports additional secondary packaging in large quantities, ensures minimal space usage and protects products from the environment

Labeling

is the process of sealing a product with an attractive wrapper or seal and provides information

Inventory

 is a crucial component of any logistics system as it shows the stock of goods a company has on hand and can fulfill customer demand

Raw Materials

primary materials used to make finished goods

Work-in-Progress

products that are partially through development

Finished Products

products that can come from the raw materials and work-in-progress supply chain or purchased by the company

Maintenance, Repair, and Operating Inventory (MRO)

items necessary to keep the manufacturing process functioning smoothly

Packaging Materials

products used to pack a business’ products, such as boxes, bubble wrap, and shipping materials

Transporatation

is a crucial component of the logistics system as it involves the physical movement of commodities from one location to another

Truck Freight

road transportation

Ship

marine transportation

Train

rail transportation

Plane

air transportation

Delivery

involves transferring products to the final client from a warehouse or distribution facility and includes tasks like order processing, packaging, delivery, and tracking

Reverse Logistics

deals with the handling of products and materials after they have been delivered to customers, including returns management, product repair or refurbishment, and movement to origin or warehouse

Forecasting

is an important tool for making informed business decisions. It helps anticipate trends in important business indicators and requires specific skills and correct data.

Timeliness

enough time needed to respond to a new forecast

Accuracy

forecast needs to be as accurate and research as possible

Reliability

forecast system needs to produce consistent results

Correct Units

forecast needs to be in meaningful unit of measurement

Simplicity

forecasts should be thorough yet simple to understand and use

Macro-Level (Forecasting Technique)

looks at general economic condition and external forces

Micro-level (Forecasting Technique)

specific to a particular industry, business, or customer segment

Short Term (Forecasting Technique)

done for a time of less than 12 months

Long Term (Forecasting Technique)

done for greater than a year

Demand Analysis

• evaluates customer needs and identifies high-demand products or services.  

• helps businesses make informed decisions about pricing and sales strategies.

• determines if a business can successfully enter a market and generate expected profits

Predictive Analysis

Evaluates the reason why people buy using current and historic data

Conjoint Analysis

uses surveys to obtain consumer input about product attributes

Client Intent Surveys

asks consumers how they would use and respond to a certain product attributes

Delphi Method

a group of experts provide input and reach a consensus on future demand

Qualitative Approach

more subjective in nature and rely on the opinions of sales reps, executive teams and other market variables to forecast sales revenue. Data is often used for new product lines or when a business first launches, since historical data doesn’t exist yet. Common types of qualitative data include surveys and interviews, industry benchmarks, competitive analyses, and more

Quantitative Approach

uses historical data to determine the future. Based on the assumption that the future will largely mimic the past, it involves the use of formulas to calculate a predetermined forecasting measurement.

Naive Approach

assumes future sales will be the same as previous sales period

Moving Averages

calculates average of data points over a specific time period to make predictions

Exponential Smoothing

considers past data but gives more importance to recent observations

Regression Analysis

analyzes relationship between two or more variables

Executive Opinion

group of executives make decisions based on their experience

Delphi Method

trusted advisors give opinions, which are compiled and interpreted for decision makers

Market Research

uses various methods to gather data and understand target market

Consumer Surveys

asks consumers for their opinions on products

Customer Service

is a series of activities and processes that aim to assist, support, and satisfy customers

Importance of Customer Service

• Builds trust, positive word of mouth, and increases sales

• Allows customers to give honest recommendations and be loyal to the business

Customer Satisfaction

It measures how effectively a company’s products, services, and support meet customer expectations. Reflects degree of customer needs being met and contributes to loyalty and positive sentiment

Marketplace

is where people gather to buy and sell goods

Major Physical Markets

wet and dry markets, e-commerce, indoor markets, street markets, and night markets

Customer’s Expectation

Anticipated perceived value, behavior, service, or benefits that customers expect when making a purchase or using a service. Can influence decision making and affect a business

Customer Requirements

are the specifications or attributes of a product or service that customers perceive as required. These are the characteristics of the product or services that will encourage customers to buy

Core Expectations

these are the needs or necessary features of a particular product

Unstated Expectations

these are expectations that customers do not express, but when they are unsatisfied, they will not buy again. When satisfied, they become loyal customers

Service Expectations

customers anticipate a certain amount of contact and experience when purchasing goods or services