by Physical distribution of goods, also known as logistics or supply chain management, involves the planning, implementation, and control of the physical movement of goods from the point of origin to the point of consumption. This process includes the management of transportation, warehousing, inventory management, and order fulfillment.
Transportation:
Transportation is a critical component of physical distribution, as it involves the movement of goods from the point of origin to the point of consumption. There are several modes of transportation, including air, rail, road, water, and pipeline. The choice of transportation mode depends on several factors, including the type of product, distance to be covered, speed required, and cost. For example, air transportation is fast but expensive, while water transportation is slower but more cost-effective for transporting large volumes of goods.
In addition to the mode of transportation, logistics managers must also consider the routing and scheduling of shipments. This involves selecting the most efficient and cost-effective routes and scheduling shipments to minimize transportation costs and ensure timely delivery.
Warehousing:
Warehousing involves the storage and management of goods before they are shipped to the customer. Warehouses serve several functions, including inventory management, order fulfillment, and consolidation. In addition, warehouses can also provide value-added services such as assembly, kitting, and customization.
Effective warehouse management requires careful planning and coordination of activities such as receiving, storage, picking, packing, and shipping. Warehousing also involves the use of technology such as warehouse management systems (WMS), which help to automate and optimize warehouse operations.
Inventory Management:
Inventory management involves the planning and control of inventory levels to ensure that the right products are available in the right quantities at the right time. Effective inventory management requires a balance between minimizing inventory costs and ensuring that customer demand is met.
Logistics managers must consider several factors when managing inventory, including demand forecasting, lead times, safety stock levels, and order quantities. Technology such as inventory management software can help to automate and optimize inventory management processes.
Order Fulfillment:
Order fulfillment involves the process of receiving, processing, and delivering customer orders. Effective order fulfillment requires coordination between different departments such as sales, customer service, and logistics.
Logistics managers must consider several factors when managing order fulfillment, including order processing times, delivery lead times, shipping costs, and customer expectations. Technology such as order management systems (OMS) can help to automate and optimize order fulfillment processes.
In addition to these four aspects of physical distribution, logistics managers must also consider several other factors when managing the supply chain, including:
Supplier Management:
Effective supply chain management requires close collaboration with suppliers to ensure that they can meet the company’s requirements in terms of quality, quantity, and delivery times. Logistics managers must work closely with suppliers to manage procurement, quality control, and transportation of goods from suppliers to the company’s warehouses.
Reverse Logistics:
Reverse logistics involves the management of the return of goods from the customer back to the company. This can include returns due to product defects, overstocking, or customer dissatisfaction. Effective reverse logistics requires a well-defined process for receiving, inspecting, and disposing of returned goods.
Sustainability:
Sustainability is becoming an increasingly important factor in logistics management, as companies seek to reduce their environmental footprint and meet the expectations of customers and stakeholders. Logistics managers must consider factors such as fuel efficiency, carbon emissions, and waste reduction when managing the supply chain.
