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Chapter 1.1 Introduction To Distribution Management

This document outlines the course content for a distribution management course. It includes 4 learning outcomes focusing on describing distribution and its components, explaining distribution channels and operations, and analyzing international distribution. It also lists 6 chapters that will be covered: Introduction to Distribution Management, Components of Distribution Management, Channels of Distribution Management, Distribution Operations Planning, Distribution Operations Execution, and International Distribution. Various assessment methods are outlined including tests, quizzes, presentations, problem scenarios, and a mini project.

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307 views25 pages

Chapter 1.1 Introduction To Distribution Management

This document outlines the course content for a distribution management course. It includes 4 learning outcomes focusing on describing distribution and its components, explaining distribution channels and operations, and analyzing international distribution. It also lists 6 chapters that will be covered: Introduction to Distribution Management, Components of Distribution Management, Channels of Distribution Management, Distribution Operations Planning, Distribution Operations Execution, and International Distribution. Various assessment methods are outlined including tests, quizzes, presentations, problem scenarios, and a mini project.

Uploaded by

有川静寂
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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DPL 5023

DISTRIBUTION MANAGEMENT

1
Course Learning Outcome (CLO)
 Describe briefly the scope, the importance and the development of physical
distribution in logistics and supply chain area. (C1, PLO1)

 Explain clearly the components and the channels of distribution management in


logistics and supply chain activities. (C2, PLO1)

 Apply accordingly the distribution operations planning and execution in logistics and
supply chain management. (C3, PLO1)

 Explain about the international distribution management based on the current


logistics environment effectively. (A3, PLO9)

2
List of Chapters

Chapter 1 Introduction to Distribution Management


Chapter 2 Components of Distribution Management
Chapter 3 Channels of Distribution Management
Chapter 4 Distribution Operations Planning
Chapter 5 Distribution Operations Execution
Chapter 6 International Distribution

3
ASSESSMENT (50%)
Context Test Quiz Presentation Problem Mini
(15%) (10%) Scenario Project
(5%) (20%)
Chapter 1
√

Chapter 2
√
Chapter 3

√
Chapter 4
√
√
Chapter 5

Chapter 6
√
4
CHAPTER ONE

INTRODUCTION
TO
DISTRIBUTION MANAGEMENT
5
LEARNING OBJECTIVES:

1. Define the meaning of 4. Describe the development


physical distribution of distribution and logistics
• 1950s and early 1960s
2. Identify the scope of physical • 1960s and early 1970s
distribution • 1970s and 1980s
• Late 1980s and early 1990s
• 1990s and 2000
• 2010 and beyond
3. Describe the importance of
logistics and distribution • Explain the relationship of
 Importance in the economy
distribution with the
 Importance of key components
logistics and supply chain
 Importance by industry sector
activities
6
Distribution Management can be known as:
Physical distribution
Logistics
Business logistics
Materials management
Procurement and supply
Product flow
Marketing logistics
Supply chain management
Demand chain management

7
Scope and Definition:
Logistics = Materials management + Distribution

Supply Chain = Suppliers + Logistics + Customers

** Logistics and the supply chain are concerned with physical


and information flows and storage from raw material through to
the final distribution of the finished product.

Thus, supply and material management represents the storage


and flows into and through the production process, while
distribution represents the storage and flows from the final
production point through to the customer or end user.
8
DEFINITION

Distribution: the function of moving various products from


the vendor’s facilities or the manufacturing workstation (where the
product were manufactured) to the company’s facility for storing,
picking the products based on customers order requirements, and
delivery the product to the customer’s facilities or workstation.

(David Mulcachy, Warehouse Distribution and Operations Handbook)

9
Simple Definition:
Distribution

 Physically moving products and establishing


intermediary relationships to support such movement.

Physical Distribution (Logistics)

 The activities of distribution involved in the physical


relocation of products.

10
The key components of distribution and logistics /
Scope of physical distribution

11
Determining the Scope of Physical Distribution

Transportation—which mode to use?

 Common carriers
Transportation intermediaries available for hire to the
general public.
 Contract carriers
Transportation intermediaries that
contract with individual shippers.
 Private carriers
Lines of transport
owned by shippers.

12
Determining the Scope of Physical Distribution

Storage
 Lack of storage space is a common problem

Materials Handling
 Protecting the firm’s output during warehousing .
Specifying Responsibility for Delivery Terms
 Paying freight costs
 Selecting the carriers
 Bearing the risk of damage
 Selecting the modes of transport

13
Determining the Scope of Physical Distribution

Information and control

 Design of systems
 Control procedures forecasting

14
Transportation Modes
Rail
Rail
Nation’s
Nation’slargest
largestcarrier,
carrier,cost-effective
cost-effective
for
forshipping
shippingbulk
bulkproducts,
products,piggyback
piggyback
Road
Road
Flexible
Flexiblein
inrouting
routing&&time
timeschedules,
schedules,efficient
efficient
for
forshort-hauls
short-haulsofofhigh
highvalue
valuegoods
goods
Water
Water
Low
Lowcost
costfor
forshipping
shippingbulky,
bulky,low-value
low-value
goods,
goods,slowest
slowestform
form
Pipeline
Pipeline
Ship
Shippetroleum,
petroleum,natural
naturalgas,
gas,and
andchemicals
chemicals
from
fromsources
sourcestotomarkets
markets
Air
Air
High
Highcost,
cost,ideal
idealwhen
whenspeed
speedisisneeded
neededororto
to
ship
shiphigh-value,
high-value,low-bulk
low-bulkitems
items
15
The importance of logistics
 In today’s scenario, logistics and distribution can be considered as
a whole in the business and economy context.

 It is an important activities that making extensive use of the human


and material resources that affect the national economy.

 There are several research that been done to try to estimate the
impact of logistics to the economy.

Group Discussion:
Identify the importance of logistics to:
1) Economy
2) The key components
16
3) Logistics Industry
Importance of logistics and distribution
to the economy
Study showed that 30% of the working population in
UK are related to logistics.
At the main European and North American economies
having between 8% to 11% of GDP represented by the
logistics sectors.
The range for developing country much higher
between 12% to 21%, with India at about 17% and
China at 21%.

17
Importance of logistics and distribution
to the economy

18
Importance of logistics and distribution
to the economy

Referring to the figure, the numbers represent some


very substantial costs.
It is important to understand the logistics costs and
how to keep it minimum.
Countries with the lowest cost are having stronger
recognition and vice versa.
It is to be expected that the logistics costs at
developing country will decrease over a years.

19
Importance of key components
There are surveys conducted to identify the breakdown
of the costs of different elements within logistics in the
US.

Transport takes 50% of the cost


Inventory carrying cost takes 20%
Storage/warehousing takes 20%
Customer service/order entry takes 7%
Administration takes 3%

20
Importance of key components
 Cost breakdown in European.
Transport at 40%
Warehousing at 32%
Inventory carrying cost at 18%
Customer service/order entry at 5%
Administration at 5%

 In both studies, the transportation cost are high due to fuel


prices are high.

 In US, the long distance travelling are affecting the costs.

21
Importance by industry sectors
The costs can vary between companies and also
between industries.(refer to table)

22
23
Importance by industry sectors
One main reasons for costs difference is the
logistics structures can be different between
companies and industries.
Channels can be short (very direct), or long
(having many intermediate stocking points).
Channels also may be operated by the
manufacturers, retailers, and now the
specialist 3rd party.
The high value products having a low costs of
logistics and vice versa.

24
Importance by industry sectors
 A study by Datamonitor (2008) indicate that in global market, the retail
logistics has dominated up to 63.9%.
 This means that retails sectors have advance and innovative
development in logistics.

25

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