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Physical distribution management

Physical Distribution management helps in delivering the customer what is wanted in specific time and cost.
The Objective of distribution management is to design & operate a distribution system that attains the required level of customer services & does so at least cost
Physical distribution management (PDM) caters to the actual movement of products through the various channels of distribution. This field of study is concerned with various aspects related to transportation of the goods, the main of which is transportation cost.

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Physical distribution management

  2. 2. Physical Distribution Cover of this topic. 1. Physical Distribution . 2. Activities in Physical Distribution. 3. Channel Distribution 4. Objects of Physical Distribution 5. Order Processing. 6. Transportation. 7. Warehousing 8. Packaging 9. Material Handling
  3. 3. Physical Distribution Physical distribution is responsible for delivering to the customer what is wanted on time & at minimum cost The Objective of distribution management is to design & operate a distribution system that attains the required level of customer services & does so at least cost TYPES Physical Supply ◦ goods moving from supplier to manufacturer ◦ “inbound” Physical Distribution ◦ goods moving from manufacturer to customers ◦ “outbound”
  4. 4. Physical Distribution
  5. 5. Activities in Physical Distribution Transportation: It involves various methods of moving goods outside the firms building Distribution Inventory: It includes all finished goods inventory at any point in the distribution system Materials Handling: It is the movement of stored goods inside the distribution center Packaging: Goods moving in a distribution system must be contained protected & identified Order Processing: It includes all activities needed to fill customers orders
  6. 6. Channels of Distribution A Channel Distribution is one or more companies or individuals who participate in the flow of goods or services from the producer to final customer TYPES Company may deliver directly to customers Use other companies or individuals to deliver goods Intermediaries ◦ wholesalers – agents ◦ transportation companies – warehouses
  7. 7. Object of Physical Distribution 1. Total Cost Concept 2. Customer Service Concept a. Time b. Dependability c. Communication d. Convenience e. Accuracy 3. Distribution Cost-Service trade offs a. Achieve right balance between them b. Flexibility is important in balancing the cost and service
  8. 8. Order Processing a. Verifying Customers’ Credibility b. Checking for any outstanding payment c. Monitoring stock level d. Preparing invoice e. Arranging transporter f. Sending the consignment and information
  9. 9. Transportation i. Transportation brings together raw materials for production of marketable commodities & distributes the products of industry to the marketplace FACTORS i. Suitability or nature of product ii. Affordability iii. Availability iv. Customers’ specifications v. Competitor’s transportation model
  10. 10. Warehousing Warehouses include plant warehouses, regional warehouses, and local warehouses. The service function that warehouses perform can be classified into two kinds: General Warehouse: where goods are stored for long periods & where the prime purpose is to protect goods until they are needed Distribution Warehouse: It has dynamic purpose & mixing. Goods are received in large volume uniform lots, stored briefly & then broken down into small individual orders Role of Warehouse: Transportation Consolidation, Product mixing, Service
  11. 11. Packaging The basic role of packaging in any industry is to carry the goods safely through a distribution system to the customer. The Package must do following: Identify the Product Contain & Protect the product Contribute to physical distribution efficiency Role: Protect the product against shock, compression, vibration, moisture, heat, solar radiation, oxidation, animals, bacterias etc Atleast 3 levels of packaging: Primary Packaging to hold product, next for small packages shipping container is needed, thirdly several primary or sec packages are assembled into unit load
  12. 12. Materials Handling Materials handling is short distance movement that takes place in or around a building such as plant or distribution center Objectives: To increase cube utilization by using the height of building & by reducing space To improve operating efficiency by reducing handling To improve the service levels by increasing the speed of response to customer needs TYPES: Conveyors, Industrial Trucks, Cranes & Hoists