Physical distribution the movement of materials from the producers to the consumers two functions physical supply physical distribution supply chain. It also includes several critical decision making areas like customer service, materials, inventory, packaging of the finished product, order processing and fulfilment. Physical distribution and logistics marketing management. Overseeing the movement of goods from supplier or manufacturer to point of sale. Supply chain supplier manufacturer distribution system customer physical supply manufacturing planning and control physical distribution dominant flow of products and services dominant flow of. The following discussion is concerned with the concept of distribution communications and the role of information systems in physical distribution. Mar 25, 2009 this paper examines the interrelationship between physical distribution and channel management. Apr 28, 2015 the evolution from physical distribution to logistics, and then to supply chain management has invoked many interesting studies in recent years. A conceptual framework is developed, based on industry and firm conditions, to explain the relative importance of physical distribution functions in the field of channel management. Inventory management is the heart of the game of physical distribution. Companies achieve competitive advantages using distributed systems. Vellenga, 1995,international logistics and onestop.
Management transportation part of logistics management, physical distribution is concerned with the transporting of merchandise, raw materials, or byproducts, such as hazardous waste, from the source to the customer. Physical distribution, logistics, supply chain management. Both satisfaction level of of customer and competitiveness of company can be enhanced if the distribution problem is solved optimally. If these are well planned and implemented, they are competitive tools that can build sustainable competitive advantage.
Nov 16, 2011 in this presentation, we will discuss about the concept and definition of physical distribution, defining logistics, relation with other marketing mix variables. We strive to achieve this by providing authors with best in class service through timeliness and. Physical distribution is one component of channel management. This eventually generated textbooks on physical distribution management, as well as courses in business schools.
Physical distribution refers to the processes through which a business moves a product through distribution channels and gets it to its customers. Total supply chain management coordinates all activities to meet strategic objectives. Physical distribution has two broad objectives viz. The role of information systems in physical distribution. This concerns movement of a finished productservice to customers. Physical distribution last stage of production is consumption and consumers are called customers. Physical distribution is responsible for delivering to the customer what is wanted on time and at minimum cost. The design and management of physical distribution systems involve a number of business functions in addition to marketing including raw materials management. Physical distribution management pdm caters to the actual movement of products through the various channels of distribution. Physical distribution plays an imporant role in contemporary logistics management. Physical distribution management at the operational le vel, which is considered in this paper, is responsible for an important fraction of the total distribution costs.
The types of packaging and the number of transportation modes capture the range attribute of physical distribution. Designing of a physical distribution system involves these steps. The contribution of physical distribution management to. This field of study is concerned with various aspects related to transportation of the goods, the main of which is transportation cost. Physical distribution advantage, type, cost, a system. Physical distribution, logistics, suplly chain management,consummersneeds. It is a process of managing the movement of the goods. The methods and routes to be adopted to bring the products to the marketto the ultimate consumers and industrial users, must be determined. Marketing mngmt physical distribution tutorialspoint.
Specht has pointed out that this division is not completely accurate, since both of these subsystems exhibit certain common starting points. The lack of attention to physical distribution in channels research in. Chapter ii distribution management and channel practices. Explain the difference between logistic and physical. In physical distribution, the customer is the final destination of a marketing channel, and the availability of the productservice is a vital part of each channel participants marketing effort 4. They make the product available when, where, and in which quantities the customer wants.
The nature and scope of physical distribution physical distribution x comprises all the activities that help to ensure that the right amount of product is delivered to the right place at the right time. However, relatively little attention has been paid to physical distribution function in. Physical distribution comprises all the activities that help to ensure that the right amount of product is delivered to the right place at the right time. Physical distribution is the sum of a firms warehouse location decisions, inventory control processes, order handling and transportation decisions. The producer can sell directly to the customers without the help of intermediaries. We will also talk about the objectives of physical distribution process, components of physical distribution, warehousing, inventory management and control. Chapter ii distribution management and channel practices an.
Distribution channels can be also defined as marketing channels or market channels. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Distribution management is an overarching term that refers to numerous activities and. The management process that integrates the activities of all companies to ensure an efficient flow of goods through the supply chain global marketingschrage 12 1220 physical distribution, supply chains, and logistics management order processing includes order entry in which the order is actually.
To reach this objective, all activities involved in the movement and storage of goods must be organised into an integrated system physically. European journal of business and innovation research vol. At its simplest, the subject of physical distribution and logistics can be defined as having the right quantity of an item, in the right place, at the right time. When an organization decides on what distribution channel to use, it creates the final link in the supply chain. Physical distribution management focuses more narrowly on providing products when and where they are needed3. Physical distribution activities have recently received increasing attention from business managers, including small business owners. Mar 12, 2015 physical distribution management helps in delivering the customer what is wanted in specific time and cost. Physical distribution is defined as the group of activities that deals with the supply of finished product from the finished product to the end consumers. Part of logistics management, physical distribution is concerned with the transporting of merchandise, raw materials, or byproducts, such as hazardous waste. But other than these transactional functions, marketing channels are also responsible to carry out the following functions. Physical distribution and logistics in marketing management. The planning, implementation, and controlling of the physical flow of material or product from one point to another to meet the customer requirements in the market is known as physical distribution. The role of distribution channel management has gained widespread. Physical distribution management flashcards quizlet.
International logistics and onestop shopping janjaap semeijn, david b. International journal of logistics research and applications. As a marketing mix element near product development and. By applying the material flow theory that expands attributes of logistics to coordination of environment, economy, and society, this paper examines the evolution from a unique perspective.
Interpretive structural modeling of supply chain risks hanschristian pfohl, philipp gallus, david thomas. Managing international physical distribution activities international distribution management is complex. The objective of distribution management is to design and operate a distribution a system that attains the required level of customer service and does so at least cost. Pdf physical distribution costs in construction supply chains.
Physical distribution has been acknowledged as being an important component of channel management cf. Physical distribution costs in construction supply chains. However, relatively little attention has been paid to physical distribution function in channels research within the marketing literature. This description of physical distribution and logistics belies the complexity of decisions and planning in achieving these objectives. A distribution channel is a group of dependend on each other organisation units, which are taking part in process of flow of producst or services form producers to buyers. Role of channel of distribution and physical distribution.
Physical distribution links a business and its customers. Pdf local search in physical distribution management. By this time, computers had slowly entered the realm of pd, at least in the united states. Physical distribution is the group of activities associated with the supply of finished product from the production line to the consumers. This paper examines the interrelationship between physical distribution and channel management. Place utility global marketing channels and physical. The two components of distribution are supply chain management and physical distribution. Success requires the correct answers to a number of difficult issues in order to develop the optimal distribution system for each target market. Findings recognizes the dominance of deductive research in logistics, and the need for more inductive and, in particular, abductive research for theory development.
According to this author, acquisition distribution system management includes the management of distribution routes, i. The functional aspect of the distribution channel is seen as a way to connecting and. Physical distribution is the actual movement of products from a producer to consumers. It should be borne in mind that the physical distribution manager can exercise little control, in the short run, over most of the external environmental variables. Smartturn created this ebook for business owners, logistics professionals, accounting staff, and procurement managers responsible for inventory, warehouse and 3pl operations, as well as anyone else who wants to demystify. Today managers becoming more important due to the distribution issue, according to the distribution, physical distribution and management of it and the cost and interaction between analysis, planning, and control of service levels are physical tasks of distribution management. Such a kind of huge retail organization, many a time looking like a miniature township, is usually owned by a big. Three distribution systems are used to transfer the goods from production place to final consumers. Physical distribution is thus, management of the physical flow of products and management and operation of the flow system. Basic model of the flexibility these capabilities are important to strategic responses because they are visible to customers. Physical distribution is part of a larger process called distribution, which includes wholesale and retail marketing, as well the physical movement of products. Physical distribution flexibility in logistics systems and.
Effective management of physical distribution and logistics has a substantial impact on a company and its customers costs, efficiency and effectiveness. The focus is on the relationship between information flows and physical distribution management, using the basic tasks of management. Physical distribution management helps in delivering the customer what is wanted in specific time and cost. Review of physical distribution management scholarworks. The cost of incoming transportation tends to be hidden in the price, but the business owner will feel the price directly if he or she has to ship product any.
Emerald international journal of physical distribution. Physical distribution system and activities scm wizard. Apply to distribution manager, process worker, continuous improvement manager and more. Aug 01, 2017 physical distribution is responsible for delivering to the customer what is wanted on time and at minimum cost. Distribution management refers to the process of overseeing the movement of goods from supplier or manufacturer to point of sale. Physical distribution management pdm definition marketing. Producers produce goods and finally make them ready for the market. For the first time, pd, as well as cost control, became central concerns of upper management. Pdf international journal of physical distribution. The distribution channel includes both the wholesale and retail channels.
The evolution from physical distribution to logistics, and then to supply chain management has invoked many interesting studies in recent years. The contribution of physical distribution management to the competitive supply chain strategies of major uk food retailers. Channel management concerns the entire process of setting up and operating the distribution network. Supply chain management is the process of managing all activities required to transform raw materials into. Pdf optimization of physical distribution problem in. Marketing managers undertake an inventory planning to develop adequate assortments of products for the target market and also try to control the costs involved in obtaining and maintaining inventory. It is an overarching term that refers to numerous activities and processes such as packaging, inventory, warehousing, supply chain, and logistics. Physical supply flexibility physical distribution flexibility demand management. Role of channel of distribution and physical distribution of goods.
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