PHYSICAL DISTRIBUTION

1
PHYSICAL DISTRIBUTION
2
Logistics Supply Chain
Logistics
Supply Chain
3
Physical Distribution

• Creation of customer is task of mktg.
• Product availability leads to satisfaction
• To achieve this value adding generally have a
  distribution activity known as distribution
  system, traffic mgt., mktg. logistics, or
  physical distribution
• So it is a mktg. activity that concerns the
  handling movement of goods

4
Physical Distribution

• It includes all those activities concerned with
  the efficient movement of goods from the place of
  production to the place of consumption
• It involves the handling of raw material
  fabricates parts, supplies finished goods from
  producers to consumers via intermediaries

5
Physical Distribution

• William Stanton Involves the mgt.of physical
  flow of products establishments operation of
  flow systems
• Philip Kotler Involves planning, implementing,
  controlling the physical flow of material final
  goods from the point of origin of use to meet
  customer need at a profit

6
Objective of Physical Distribution

• Basically two broad objective
• 1. Attain customer satisfaction
• 2. Profit maximization
• 3. Getting the right product, at the right place,
  at the right time, in right quantity, at the
  right customer at the lower cost
• 4. Proper co-ordination of distribution acivities

7
Objective of Physical Distribution

• 5. To use powerful tool of competitive mktg.
• 6. To provide better service of lower prices
• 7. To increase profit margin

8
Objective of Physical Distribution

• Meetings standards of customer service for
• Timeliness of order fulfillment
• Accuracy of order fulfillment
• Reducing total distribution costs
• Inventory levels against warehousing costs
• Materials costs versus transportation costs
• Distribution costs against customer service
  standards
• Overall goal is to achieve the lowest total
  distribution cost compatible with the firms
  customer service objectives.
• Reducing cycle (process completion) time
• Faster processes for increased customer service

9
Significance of Physical Distribution

• Creation if utilities Place Transportation
• Time Warehousing
• ? Improved consumer service
• ? Cut in distribution cost
• ? Market share
• ? Price stabilization
• ? Play vital role where production location
  markets are distanced

10
Cost of Physical Distribution Functions
11
Participants in physical distribution

• Supplier
• Manufacturer
• Intermediaries
• Wholesalers, Retailers
• Agents Selling, Manufacturing, C F etc.

12
Component functions of physical distribution

• Planning the overall physical distribution system
• In bound transport
• Receiving Raw material, orders
• In plant warehousing
• Inventory management
• Order processing

13
Component functions of physical distribution

• Packaging
• Dispatch of goods
• Out bound transport
• Field warehousing
• Customer service

14
Components of physical distribution

• Order Processing
• The receipt and transmission of sales order
  information
• Order entry
• Order handling
• Order delivery
• Electronic data interchange
• A computerized means of integrating order
  processing with production, inventory,
  accounting, and transportation

15
Order processing

• Series of logical steps from receiving orders to
  dispatch
• there should be a standard procedure for
  receiving the orders, handling orders, granting
  of credit, invoicing, dispatching, collecting the
  bills and post dispatch adjustments

16
Steps in order processing

• Communication of orders Verbal or written
• Credit check
• Inventory check
• Order of dispatch
• Intimation to customer
• Dispatch of goods
• Collection of payments

17
Material Handling
18
Material Handling

• Sub system of PDS
• Stands for movement handling of goods
• Represents product handling from plant to
  warehouse warehouse to place of loading
• An agent of cost reduction improved customer
  service
• Reflects on efficiency speed of warehousing
  operations
• Efficient effective MHS contributes efficiency
  effectiveness of total PDS

19
MH operations performed in following stages

• Unloading incoming material from transport
  vehicles
• Moving unloaded material to assigned warehouses
• Lifting the mat. from warehouses during order
  picking
• Moving the material for inspection packing
• Loading packages/boxes to transport vehicles

20
MH Equipments Systems

• Manual Use of man power animal
• Mechanised system wheeled trolleys, forklift
  trucks, side loaders, mobile cranes, conveyors
  wheel, roller, belt, chain
• Semiautomatic system sorting device robotics

21
Warehousing
22
Warehousing
Balancing act
23
Warehousing

• An act of storing and assorting the finished
  goods so as to create maximum time utility at
  minimum cost
• Sub function Storage, movement, assorting,
  hold, consolidation, break bulk, packing,

24
Advantage of Warehousing

• Serves as safeguard
• Make provision for unloading
• Serves economically at lower prices
• Helps in determining the channel of distribution
• Assist in maintaining continuous sales
• Balancing demand supply
• Stabilizing prices
• Reduces need for instant transportation