Distribution Logistics

Nevroz GSTERC
2012. Apri
College of Dunajvros
Dunajvros
Tncsics M. u. 1/A. F/118/E.
Abstr!ct

Aim of the aer is to reresent a!out "istri!ution logistics.#ogistics is the managemet of
the flo$ of goo"s !et$een the oint of origin an" the oint of "estination.
%ntegration of information&transortation&inventor'&$arehousing&material han"ling&ac(aging
an" often securit'.)ere is an e*amle+,n the earl' morning&a major suermar(et-s o$n truc(
"elivers fresh sulies to relenish those that $ere sol" on the revious "a' tight to the
loa"ing ram.all re.ic(e" for ghe retail outlets.At the same time&tje secialt'.foo" retailer
ne*t "oor is !u'ing goo"s for that articular "a' from the $holesaler.Distri!ution logistics
a"ressess these t'es of "eliveries an" others as $ell.,n the rocess&"istri!ution logistics
covers much more then the simle shiment of a ro"uct from /oint A to /oint 0.1 [1]
Logistiksysteme | Pfohl 2004)
Figure 1. rocess of logistics
"ntro#uction
The concet of logistics "ates !ac( to anti2uit'. 3evertheless& real interest to$ar" the su!ject
of logistics arose "uring 4orl" 4ar 5 $hen large 2uantities of men an" material ha" to !e
rai"l' "elo'e" aroun" the $orl". #ater on& in 1678s an" 1698s the monetar' an" strategic
value of logistics e*an"e" at a rai" rate.
Desite the fact that logistics e*ists in t$o forms 1militar' an" managerial:& an" !oth forms
are ver' similar& it is ver' imortant to "ifferentiate among the t$o of them.
Militar' logistics is concerne" $ith movement of goo"s an" eole. Managerial logistics
concentrates rimaril' on finishe" ro"ucts.
Firstl'&,t coul" !etter to see the historical rocess of logistic.

16;8.1698+ Esta!lishing hase of logistics
1698.16<8+ =n"erstan"ing i"ea of logistics an" gain a reutation
16<8.1688+ ,nterchange age of riorities an" mo"els
1688.until to"a's+3e$ age of economic an" technical change
,mrovement of logistics can !e a""e" > main hase.
!$Desintegr!tion%1&'0(1&)0$+,n this erio"&$e can see that activities of constituent arts of
logistics are con"ucte" searatel'.?ome of follo$ing oerations rocessing in a institution
an" artiall' the' $ere outsourcing.
Deman rovi"ence
/urchansing
@e2uirements lanning
/ro"uction lanning
Factories- stoc(s
4arehousing
Material rocesses
/alletiAation
,nventories
Br"ering rocess
?himent
Customer services
Distri!ution sche"uling
b$Associ!tion%1&)0(2000$+,n this erio" logistical oerations come un"er 5 main concet
Materials an" sulies management
/'hsical "istri!ution
c$Tot! integr!tion%2000(No*!#!+s$+?till.continuing this rocess a"" u "esintegration an"
association gather un"er one single roof.Clo!aliAation&li!eraliAation in $orl" econom' an"
concor"antl' harmon' efforts $hich force firms increases logictical activities imortances
an" reveal integrate" logicstic concet.
,f , ma(e a grou of logistic factorsD
4arehousing
Transortation
?toc( management
%nformation an" control
/ac(aging
Clearance
Customer services
,f $e anal'Ae cost of logistic activities&$e $ill see that shiment costs stan" out.
Logistic Costs R!tio
?himent costs E78.E97
,nventor' an" material han"ling E58.E>7
0usiness la'out "esign
costs1lanning an" managing of
storage an" "istri!ution centrals:
E18
Communication an" information
costs
E7
Distri!ution #ogistics resents a comlete an" !alance" treatment of "istri!ution logistics
!' covering !oth alications an" the re2uire" theoretical !ac(groun"& therefore e*ten"ing its
reach to ractitioners an" stu"ents in a range of "iscilines such as management& engineering&
mathematics& an" statistics. There are some relate" areas of stu"' for "istri!ution logistics
inclu"esD
?ul' chain management
3et$or( "esign an" transortation
Deman" forecasting
,nventor' control in single. an" multi.echelon s'stems
,ncentives in the sul' chain
Fehicle routing
1hracat Gelitirme Et! "erke#i$Lo%istik &arih'esi()istory of logistic$Lo%istik Elema*lar(
+actors of logistics)
1.Concept !n# scope o, #istribution ogistics
Distri!ution logistics comrises all activities relate" to the rovision of finishe"
ro"ucts an" merchan"ise to a customer. The ro"ucts can !e "elivere"
"irectl' from the ro"uction rocess or from the tra"er-s stoc( locate" close to
the ro"uction site or& ossi!l'& via a""itional regional "istri!ution $arehouses.
#i(e rocurement logistics& "istri!ution logistics is a mar(et.lin(e" logistics
s'stem. ,t lin(s a coman'-s ro"uction logistics $ith the customer-s
rocurement logistics.
,n "istri!ution logistics& customer orientation la's a secial role !ecause of
the close lin( to the customer. 4or(ers in a "istri!ution center fre2uentl' have
more contact $ith the customer than sales reresentatives "o.
The tremen"ous significance of service thin(ing in "istri!ution logistics arises
from this customer orientation. The aim is to constantl' search for innovative
$a's that offer the customer imrove" logistics solutions. ,n the rocess&
secial re2uirements are !eing ma"e as the tra"itional mar(eting rincile of
Gro"uce in a mar(et.focuse" mannerH is !eing relace" !' the future.oriente"
mar(eting rincile of Gsell first& ro"uce later.H Furthermore& service is
increasingl' !eing rovi"e" to the customer in a multi.facete" $a' !ase" on
the rincile of Gjust for 'ou.H 0oth tren"s re2uire a great amount of service
see" an" fle*i!ilit'.
1.1-!r.eting *it/ ! #eiver+ service
,f the "eliver' service is consi"ere" to !e an instrument of mar(eting strateg'&
inter"een"encies $ith other instruments must !e consi"ere". This is !ecause
the instruments use" in mar(eting strateg' have an effect on the customer onl'
$hen com!ine" $ith the mar(eting mi* . ,nformation a!out the current
inter"een"encies $ill !e rovi"e" in later articles a!out "istri!ution logistics.
,n the rocess& mar(eting instruments are com!ine" into tools of ro"uct
strateg'& contract olicies or terms I con"itions& communications strateg' an"
"istri!ution strateg'.1 [1] Logistiksysteme | Pfohl 2004)
2.T/ir# 0!r+ Logistics
A thir".art' logistics rovi"er 1a!!reviate" >/#& or sometimes T/#: is a firm that rovi"es
service to its customers of outsource" 1or Jthir" art'J: logistics services for art& or all of
their sul' chain management functions. Thir" art' logistics rovi"ers t'icall' secialiAe
in integrate" oeration& $arehousing an" transortation services that can !e scale" an"
customiAe" to customersK nee"s !ase" on mar(et con"itions an" the "eman"s an" "eliver'
service re2uirements for their ro"ucts an" materials. Bften& these services go !e'on"
logistics an" inclu"e" value.a""e" services relate" to the ro"uction or rocurement of goo"s&
i.e.& services that integrate arts of the sul' chain. Then the rovi"er is calle" thir".art'
sul' chain management rovi"er 1>/?CM: or sul' chain management service rovi"er
(SCMSP).(,electi*g a &hir! Party Logistics -.PL) Pro/i!er "arti* "rray0a1ot2com(
htt34$$e*25iki3e!ia2org$5iki$&hir!(3arty6logistics)
2.1.T+pes o, 10L 0rovi#ers
Thir".art' logistics rovi"ers inclu"e freight for$ar"ers& courier comanies& as $ell as other
comanies integrating I offering su!contracte" logistics an" transortation services
)ert# a*! 7lfre!sso* -200.) "escri!e four categories of >/# rovi"ers+
?tan"ar" >/# rovi"er4 this is the most !asic form of a >/# rovi"er. The' $oul" erform
activities such as& ic( an" ac(& $arehousing& an" "istri!ution 1!usiness: L the most !asic
functions of logistics. For a majorit' of these firms& the >/# function is not their main
activit'.
?ervice "eveloer4 this t'e of >/# rovi"er $ill offer their customers a"vance" value.
a""e" services such as+ trac(ing an" tracing& cross."oc(ing& secific ac(aging& or
rovi"ing a uni2ue securit' s'stem. A soli" ,T foun"ation an" a focus on economies of
scale an" scoe $ill ena!le this t'e of >/# rovi"er to erform these t'es of tas(s.
The customer a"ater4 this t'e of >/# rovi"er comes in at the re2uest of the customer
an" essentiall' ta(es over comlete control of the coman'Ks logistics activities. The >/#
rovi"er imroves the logistics "ramaticall'& !ut "o not "evelo a ne$ service. The
customer !ase for this t'e of >/# rovi"er is t'icall' 2uite small.
The customer "eveloer4 this is the highest level that a >/# rovi"er can attain $ith
resect to its rocesses an" activities. This occurs $hen the >/# rovi"er integrates itself
$ith the customer an" ta(es over their entire logistics function. These rovi"ers $ill have
fe$ customers& !ut $ill erform e*tensive an" "etaile" tas(s for them.1)ert# a*!
7lfre!sso* 200.)
2.2.2n(De3!n# Tr!nsport!tion
Bn."eman" transortation is a relativel' ne$ term coine" !' >/# rovi"ers to "escri!e their
!ro(erage& a".hoc& an" Jfl'erJ service offerings. Bn."eman" transortation has !ecome a
man"ator' caa!ilit' for to"a'Ks successful >/# rovi"ers in offering client secific solutions
to sul' chain nee"s.
These shiments "o not usuall' move un"er the Jlo$est rate $insJ scenario an" can !e ver'
rofita!le to the >/# that $ins the !usiness. The cost 2uote" to customers for on."eman"
services are !ase" on secific circumstances an" availa!ilit' an" can "iffer greatl' from
normal Ju!lishe"J rates.
Bn."eman" transortation is a niche that continues to gro$ an" evolve $ithin the >/#
in"ustr'.
?ecific mo"es of transort that ma' !e su!ject to the on."eman" mo"el inclu"e 1!ut are not
limite" to: the follo$ing+
FT#& or Full Truc( #oa"
)otshot 1"irect& e*clusive courier:
3e*t Flight But& sometimes also referre" to as 0est Flight But 1commercial airline
shiing:
,nternational E*e"ite"1htt34$$e*25iki3e!ia2org$5iki$&hir!(3arty6logistics)
1.2utsourcing Distribution4-ore ,e5ibiit+ ess ris.s
1.1.6/!t is outsourcing7
3o$a"a's&firms $ant to focus their core jo! !' this $a' the' $ant to imrove their a!ilit'.?o
it reveal a ten"enc'.That-s mean firms ta(e some hel for some organiAations from another
logistical firms.Firms can set all other activities to the other firms e*cet firms core a!ilit'.,n
this $a' the' !oth "o resource savings&"o$nsiAing an" the' can focus their core !usiness.
A firm can-t !e the !est in ever' area.,f firm can not shir( some of their function the' can
leave it to firms $hich are more e*rience" than them.,n !asic of tra"itional outsourcing&firm
rocure ra$ materials from the outsi"e.0ut no$a"a's&the' outsource ever'thing e*cet their
ra$ materials.For e*amle&4estinghouse is ver' $ell at ro"ucing !ut the' realise that there
are $ell.e*rience" coman' for transortation an" the' ha" an agreement $ith this
e*rience" logistic coman'.There is another e*amle for outsourcing.@oll.@o'ce is the
$orl" famous car coman' in car in"ustr'.Bnce the' ha" a !ig crisis.,n 1661.1665 the' lost
178 million "ollar1?ilver ?ur Touring #imuAin:.The onl' $a' $as outsourcing for them an"
the' "i" it.3o$ the' outsource vehicle !o"'&a*le tree etc. other$ise the' focus
engine&aint&leather etc.
Butsourcing means glo!al sourcing.For "ecreasing material cost&firms ma(e a !argain $ith
another firms $hich is far from there a!out 8888 mile.1Richard L. Dalt, Management,2. Edition,
Dryden Press, London, 1991, page 611---http://.ms!la"s.org/#or$m/e%onomi/&''92(
o$tso$rcing(dis(%ayna%(%$llanma(%a)rami.html*i!++1s,-.'Rl/)
1.2.2utsourcing 0ro#uct Distribution
4hen "istri!ution is not a core cometenc' for 'our coman' an" 'ou "o not have the
resources to ma(e it one& outsourcing the function can hel 'our coman' gro$ !' allo$ing
'ou to focus on 'our mission.critical activities. There are t$o t'es of outsourcing that are
common among start.us . tra"itional "istri!ution an" !ro3 shi3 flfillme*t.%DS8$
Tra"itional "istri!ution outsourcing involves hiring a thir" art' to store an" "istri!ute 'our
ro"ucts through its national or international "istri!ution net$or(D this art' rovi"es the
staff& $arehouses& "istri!ution center an" transortation fleet.The secon" t'e of outsourcing&
D?F& has gro$n in arallel $ith 05C retailing over the ,nternet. 4ith D?F& a start.u
coman' sells a ro"uct& charges the customer& generates a urchase or"er& an" sen"s the /B
to the manufacturer or sulier& $ho then fulfills the or"er !' shiing the ro"uct "irectl' to
the customer. ?ince the start.u never ossesse" the ro"uct& the coman' "oes not incur an'
of the costs associate" $ith storing or urchase the ro"uct. Man' ,nternet start.us have
a"ote" this streamline" !usiness mo"el.
=nfortunatel'& comanies nee" to !e careful $hen choosing an outsourcing artner.
Butsourcing is not a anacea . if 'our thir".art' "istri!utorKs roce"ures an" erformance are
not carefull' monitore"& 'ou ris( ermanentl' alienating the customers 'ou have $or(e" so
har" to attract.
The (e' to a successful outsourcing relationshi inclu"es un"erstan"ing the rocess&
secif'ing o!jectives& esta!lishing internal roce"ures for evaluating erformance against
o!jectives& an" "elo'ing s'stems that hel to manage the function effectivel'.
6!tc/ing Costs !n# Service
,f the manufacturer or "istri!utor& $hich ma' !e the same coman'& fulfills the customerKs
or"er correctl'& ever'one is ha'. )o$ever& in most cases& there are ro!lems in one or more
of these (e' areas+
M Customer service . Another coman' ma' !e "istri!uting 'our ro"ucts& !ut ultimatel' 'ou
are resonsi!le for the customer relationshi. True& 'our coman' "oes not have "irect control
over the "istri!ution rocess& !ut the customer onl' cares a!out receiving the ro"uct . not
$ho sent it or ho$ it got there. ,f something goes $rong& 'ou are resonsi!le an" must "o
$hat is necessar' to correct the situation.
M ?hiing costs . Most manufacturers are setu to shi truc(loa"s or allets of ro"ucts& not
multile or"ers of a single ro"uct. There are also manufacturers that re2uire 'ou to urchase
more ro"ucts 'ou nee"& others set ri"iculousl' high rices for the service& an" some siml'
$ill not shi the or"ers. ,n some cases& start.us are J(ittingJ a num!er of ro"ucts& not
!ecause it a""s value for the customer& !ut !ecause it ushes the "ollar value of their or"er
a!ove a threshol" $here the manufacturer $ill agree to D?F the ro"ucts.
M /rofita!ilit' . ?hiing costs "irectl' affect 'our !ottom line. Man' start.us are assing
along the manufacturerKs shiing costs to their customers& raising the rice of their ro"ucts
an" utting themselves at a "isa"vantage in a cometitive mar(et. ,f the start.u "oes not ass
along the entire cost& the shiing e*ense cuts into the rofita!ilit' of ever' transaction.
Getting Auto3!te# 9ep
?uccessfull' managing a thir".art' "istri!utor re2uires esta!lishing internal monitoring
rocesses an" re2uiring that secific emlo'ees are resonsi!le for this function.
These emlo'ees shoul" also !e resonsi!le for "eveloing an" "elo'ing comuter s'stems
to hel automate the management function. )ere are five critical re2uirements for 'our
outsourcing relationshi $ith 'our "istri!utor+
M Esta!lish measura!le stan"ar"s for "istri!utor erformance.
M Con"uct erio"ic erformance revie$s.
M Fisit "istri!utor sites to chec( securit' roce"ures 1onl' if the start.u o$ns the inventor':.
M Monitor customer fee"!ac( an" satisfaction levels.
M As sales volume gro$s& erio"icall' revisit the "ecision to outsource the "istri!ution
function.
The right comuter s'stem can imrove 'our a!ilit' to manage the "istri!ution function in
three areas+
M Communication . To allo$ 'ou to automate communication $ith 'our suliers an"
manufacturers& 'ou must esta!lish a !ac(.en" s'stem. This means that 'ou shoul" not rel'
just on !asic email& generate" !' an emlo'ee& to trac( or"ers. For e*amle& 'ou sen" the
sulier an email to chec( on a !ac(logge" ro"uct& someone then emails 'ou !ac( $ith a
resonse& an" finall' 'ou re.(e' the information into 'our s'stem . imagine a han"ful of
emlo'ees chec(ing 788 ro"ucts. To !e more efficient& 'ou nee" a s'stem that $ill scale this
function as 'our volume e*an"s an" $ill use automate" email& fa*& 4e! ortals an"/or ED,
to communicate or"er information.
M Fisi!ilit' . Nou must (no$ if a ro"uct is availa!le !efore it is sol"& an" 'ou cannot (no$
this until 'ou vie$ 'our sulierKs inventor' to fin" out ho$ much ro"uct 'ou have !een
allocate" an" $hat is availa!le. To "o this& 'ou nee" an alication that rovi"es 'ou $ith
visi!ilit' into 'our sulierKs inventor' trac(ing s'stem.
M Trac( an" Trace . Customers $ant to (no$ the status of their or"er+ 4hen $as it shie"&
$here is it no$& an" $hen $ill , get itO ,f 'ou $ant to retain customers& 'ou nee" to !e sure
'our comuter s'stem hels 'ou manage returns& e*changes an" refun"s efficientl'. A
consulting organiAation that secialiAes in "istri!ution an" transortation can hel 'ou setu
effective internal rocesses an"& if necessar'& !uil" an" "elo' the comuter s'stems 'ou nee"
to manage an outsource" "istri!ution function for ma*imum !enefit. /art of a consultantKs
value can !e in the area of (no$le"ge transfer& e"ucating 'our organiAation on ho$ the
"istri!ution an" transortation function $or(s at the macro level an" heling 'ou set realistic
e*ectations.1Logistics a*! ,33ly 8hai* o*li*e maga#i*e
7g2 20 2000)
1.1. :ene,its o, 2utsourcing
Even for small amount of goo"s&firms- mar(eting an" "istri!uting net$or( achieve
ever' oint of "estination.Thus&firms can move more fast to customer in outlet.
Decreasing stoc(ing costs.
,n the mar(et shiment an" transortation costs are so high.Firms can economise costs
than the' can face their fiel"s of activit'.
?himent costs can "ecrease $ith logistic service rovi"ers- high volume caacit' an"
lea"ing a!ilit'.
?toc( level can !e minimiAe".
?aving mano$er.
?ome situation li(e losts&acci"ents an" thieves can !e assigne" to logistic firms.
Firms can reach $orl"$i"e a!ilities an" ne$ technolog'
There are some facts can effect firms for using1or not use: >/#D
1. CentraliAation
5. @is( an" control
>. E*en"iture an" service activities
;. ,nformation technolog'
7. @elationshis
Tr!nsport!tion
Tr!nsport or tr!nsport!tion is the movement of eole& animals an" goo"s from one
location to another. Mo"es of transort inclu"e air& rail& roa"& $ater&ca!le& ieline& an" sace.
The fiel" can !e "ivi"e" into infrastructure& vehicles& an" oerations. Transort is imortant
since it ena!les tra"e !et$een eoles& $hich in turn esta!lishes civiliAations.
Transort infrastructure consists of the fi*e" installations necessar' for transort& an" ma'
!e roa"s& rail$a's& air$a's& $ater$a's& canals an" ielines& an" terminals such
as airorts& rail$a' stations& !us stations& $arehouses& truc(ing terminals& refueling "eots
1inclu"ing fueling "oc(s an" fuel stations:& an"seaorts. Terminals ma' !e use" !oth for
interchange of assengers an" cargo an" for maintenance.
Fehicles traveling on these net$or(s ma'
inclu"e automo!iles& !ic'cles& !uses& trains& truc(s& eole& helicoters& an" aircraft.
Berations "eal $ith the $a' the vehicles are oerate"& an" the roce"ures set for this
urose inclu"ing financing& legalities an" olicies. ,n the transort in"ustr'& oerations an"
o$nershi of infrastructure can !e either u!lic or rivate& "een"ing on the countr' an"
mo"e1htt34$$e*25iki3e!ia2org$5iki$&ra*s3ort)
Distribution Centre
A "istri!ution center for a set of ro"ucts is a $arehouse or other secialiAe" !uil"ing& often
$ith refrigeration or air con"itioning& $hich is stoc(e" $ith ro"ucts 1goo"s: to !e
re"istri!ute" to retailers& to $holesalers& or "irectl' to consumers. A "istri!ution center is a
rincial art& the or"er rocessing element& of the entire or"er fulfillment rocess.
Distri!ution centers are usuall' thought of as !eing "eman" "riven. A "istri!ution center can
also !e calle" a $arehouse& a DC& a fulfillment center& a cross."oc( facilit'& a !ul( !rea(
center& an" a ac(age han"ling center. The name !' $hich the "istri!ution center is (no$n is
commonl' !ase" on the urose of the oeration. For e*amle a Jretail "istri!ution centerJ
normall' "istri!utes goo"s to retail stores& an Jor"er fulfillment centerJ commonl' "istri!utes
goo"s "irectl' to consumers& an" a cross."oc( facilit' stores little or no ro"uct !ut "istri!utes
goo"s to other "estinations.
Distri!ution centers are the foun"ation of a sul' net$or(& as the' allo$ a single location to
stoc( a vast num!er of ro"ucts. ?ome organiAations oerate !oth retail "istri!ution an"
"irect.to.consumer out of a single facilit'& sharing sace& e2uiment& la!or resources& an"
inventor' as alica!le.
A t'ical retail "istri!ution net$or( oerates $ith centers set u throughout a commercial
mar(et& $ith each center serving a num!er of stores. #arge "istri!ution centers for comanies
such as 4al.Mart serve 78L157 stores. ?uliers shi truc(loa"s of ro"ucts to the
"istri!ution center& $hich stores the ro"uct until nee"e" !' the retail location an" shis the
roer 2uantit'.
?ince a large retailer might sell tens of thousan"s of ro"ucts from thousan"s of ven"ors& it
$oul" !e imossi!l' inefficient to shi each ro"uct "irectl' from each ven"or to each store.
Man' retailers o$n an" run their o$n "istri!ution net$or(s& $hile smaller retailers ma'
outsource this function to "e"icate" logistics firms that coor"inate the "istri!ution of ro"ucts
for a num!er of comanies. A "istri!ution center can !e co.locate" at a logistics center.
Stor!ge oc!tions !n# stor!ge cont!iners
Coo"s 1ro"ucts: arrive an" are store" in a "istri!ution center in var'ing t'es of storage
locations an" containers suite" to the ro"uct characteristics an" the amount of ro"uct to !e
transorte" or store". These t'es of locations an" containers have secific in"ustr'.accete"
names. ?ecialiAe" ieces of e2uiment 1material han"ling e2uiment& or M)E: are use" to
han"le the various t'es of containers. The follo$ing is a list of some of the names an"
characteristics of common storage containers+
,ntermo"al containers 1shiing containers: are use" for the efficient transortation of goo"s.
?tan"ar"s secif' the volume an" "imensions of containers to facilitate efficient han"ling.
/allets are one of the most commonl' use" means to store an" move ro"uct in a "istri!ution
center. There are man' secialiAe" "evices 1material han"ling e2uiment or M)E: use" to
han"le allets . see for(lift truc(&allet jac(&allet inverter an" unit loa" automate" storage
an" retrieval s'stems 1A?@?:. /allets are store" on the floor& ma' !e stac(e"& an" ma' !e
store" in allet ran(ing.
Ca'lor"s are large single !o*es usuall' connecte" or attache" to a allet.
Cases an" Cartons are !o*es usuall' containing man' items. ,n "istri!ution centers there is a
generall' accete" "istinction ma"e !et$een the terms JcartonJ an" JcaseJ& although !oth are
!o*es. Coo"s are receive" an" store" in cartons& $hile goo"s are shie" in cases. A store"
carton is calle" a case once it has !een ic(e" or ulle" for shiment.
Totes are reusa!le containers use" to hol" an" transort goo"s.
0!c.!ging
/ac(aging is the science& art& an" technolog' of enclosing or rotecting ro"ucts for
"istri!ution& storage& sale& an" use. /ac(aging also refers to therocess of "esign& evaluation&
an" ro"uction of ac(ages. /ac(aging can !e "escri!e" as a coor"inate" s'stem of rearing
goo"s for transort& $arehousing& logistics& sale& an" en" use. /ac(aging contains& rotects&
reserves& transorts& informs& an" sells.,n man' countries it is full' integrate" into
government& !usiness& institutional& in"ustrial& an" ersonal use.
Consu3er Goo#s Deiver+
Most consumer goo"s are "elivere" from a oint of ro"uction 1factor' or farm: through one
or more oints of storage 1$arehouses: to a oint of sale 1retail store:& $here the consumer
!u's the goo" an" is resonsi!le for its transortation to oint of consumtion. There are
man' variations on this mo"el for secific t'es of goo"s an" mo"es of sale. /ro"ucts sol" via
catalogue or the ,nternet ma' !e "elivere" "irectl' from the manufacturer or $arehouse to the
consumerKs home& or to an automate" "eliver' !ooth. ?mall manufacturers ma' "eliver their
ro"ucts "irectl' to retail stores $ithout $arehousing. ?ome manufacturers maintain factor'
outlets $hich serve as !oth $arehouse an" retail store& selling ro"ucts "irectl' to consumers
at $holesale rices 1although man' retail stores falsel' a"vertise as factor' outlets:. 0uil"ing&
construction& lan"scaing an" li(e materials are generall' "elivere" to the consumer !' a
contractor as art of another service. ?ome highl' erisha!le or haAar"ous goo"s& such
as ra"ioisotoes use" in me"ical imaging& are "elivere" "irectl' from manufacturer to
consumer. )ome "eliver' is often availa!le for fast foo" an" other convenience ro"ucts&
e.g. iAAa "eliver'. ?ometimes home "eliver' of suermar(et goo"s is ossi!le. A mil(
float is a small !atter' electric vehicle 10EF:& secificall' "esigne" for the "eliver' of
fresh mil(.
Deiver+ ;e/ices
Fehicles are often secialiAe" to "eliver "ifferent t'es of goo"s. Bn lan"& semi.trailers are
outfitte" $ith various trailers such as !o* trailers& flat!e"s& car carriers& tan(s an" other
secialiAe" trailers& $hile railroa" trains inclu"e similarl' secialiAe" cars. Armore"
cars& "um truc(s an" concrete mi*ersare e*amles of vehicles secialiAe" for "eliver' of
secific t'es of goo"s. Bn the sea& merchant shis come in various forms& such as cargo
shis& oil tan(ers an" fishing !oats. Freight aircraft are use" to "eliver cargo.
1htt34$$e*25iki3e!ia2org$5iki$9istri1tio*6ce*ter)
1.Logistics ,or Custo3er S!tis,!ction
0efore en"ing this toic , $ant to e*lain something a!out customer satisfaction relate" $ith
#ogistics.
The term logistics is often misintrerete" to mean transortation. ,n fact& the scoe of logistics
goes $ell !e'on" transortation. #ogistics forms the s'stem that ensures the "eliver' of the
ro"uct in the entire sul' ieline. This inclu"es transortation& ac(aging& storage an"
han"ling metho"s& an" information flo$. The imact of logistics in the a!ilit' of a coman' to
satisf' its customers cannot !e overstate". All other efforts at mo"erniAation $ithin a
coman' $oul" not !ear fruit until the logistics s'stem is carefull' "esigne" to facilitate the
smooth an" efficient flo$ of goo"s in the s'stem.
1.1T/e v!ue o, Logistics
Material han"ling an" storage are t'icall' la!elle" as Jnon.value a""ingJ activities. 4hile
one can areciate the motivation !ehin" such la!eling as one "irecte" to$ar"s $aste
re"uction& it can lea" to is an erroneous assumtion that all material han"ling an" storage can
!e avoi"e". 4hile manufacturing rocesses rovi"e Jform utilit'J& logistics relate" activities
rovi"e Jtime an" laceJ utilit' to a ro"uct. The challenge is to rovi"e the time an" lace
utilit' at a cometitive cost. ,f a coman' can achieve this goal& it $ill gain a significant
cometitive a"vantage in the mar(etlace.
1.20u vs. 0us/ S+ste3s
There are t$o !asic aroaches of !ringing the ro"uct to its final "estination& i.e.& the
customer. ,n a /ush s'stem 1?ee Figure 1:& ro"ucts are ushe" from the manufacturing lants
to "istri!ution oints !ase" on a sales forecast. The secon" aroach is the /ull s'stem 1?ee
Figure 5: $hich re2uires that the ro"uct !e ulle" from the lants !ase" on actual "eman".
,n a /ush s'stem& since all the ro"uct is "elo'e" !ase" on the sales forecast for each region&
an inaccurate sales forecast incurs several severe enalties $hich inclu"e+
P ,ncrease" safet' stoc(
P #arger Distri!ution Centers/Co"o$ns
P )igher stoc( transfer rates
The re.or"er "elo'ment of ro"uct increases safet' stoc(. ?ince there is greater uncertaint'
associate" $ith forecasts& $hich are often little !etter than e"ucate" guesses& the s'stem must
rovi"e for variations in the "eman" in a articular region service" !' the articular go"o$n.
,n a""ition the s'stem must rovi"e for errors in the overall forecast for the countr' as a
$hole. These concerns lea" to the carr'ing of larger safet' stoc(s& $hich necessitate larger
go"o$ns.
The iron' in the concet of safet' stoc(s is that although sufficient stoc(s ma' e*ist in the
s'stem& the ro"uct mi* "eman"e" in a articular region ma' not e*ist in the regional
go"o$n. This necessitates inter.go"o$n transfer of goo"s. The result is an increase in the
transortation costs s'stem.$i"e& in a""ition to han"ling an" shiing costs& information
costs& ro"uct loss an" "amage& an" oor customer service. The more oints of "istri!ution in
the s'stem& the greater the enalties incurre" for unre"icta!le or"er fluctuations.
The goal of an' logistics s'stem is to maintain or imrove customer service. ,n the /ush mo"e
of oeration& the enalties of higher safet' stoc(& larger go"o$ns& an" inter.go"o$n transfer
are not the onl' enalties. ?toc( rotation !ecomes more "ifficult to maintain. )an"ling of all
ro"ucts at each go"o$n involves unloa"ing& staging& storing& ic(ing& staging an" loa"ing for
shiment. All these activities involve an element of cost. ,n a""ition& there is a otential for
ro"uct "amage each time a ro"uct is han"le".
There are some ositive asects of a /ush s'stem as $ell. These are+
P ?mall lant $arehouses
P /otential for higher customer service
P #o$er transortation costs
?ince the majorit' of the ro"uct is store" at the go"o$ns& the lant nee"s to maintain a lo$
inventor' of finishe" goo"s. This allo$s the lant to utiliAe its sace for ro"uction an"
eliminate the nee" for a full $arehouse staff. ,f the forecast is accurate& the /ush s'stem
rovi"es the otential for higher customer service !' having the ro"uct rea"' for "eliver'
"irectl' to the customer/retailer. Finall'& !' having the ro"ucts "elo'e" in the go"o$ns& the
lants have the caa!ilit' of shiing full truc(loa"s an" there!' re"ucing the s'stem.$i"e
transortation costs.
A /ush s'stem $or(s !est $hen sales are consistent& the ro"uct variet' is small& an" there
are a fe$ regionsl "istri!ution oints.1:*!ia* :*stitte of "aterials "a*ageme*t(
htt34$$5552iimm2org$k*o5le!ge61a*k$16logistics(for(cstomer(satisfactio*2htm)
Distribution S+ste3s
0efore settling for a "istri!ution s'stem the mar(eter has too (ee in min" various factors
affecting "istri!ution s'stem 1li(e mar(eting "ecision an" relationshi issues:.
The follo$ing "istri!ution "esigns are availa!le to the mar(eter for his "istri!ution s'stem+
1. Direct Distri!ution ?'stems
5. ,n"irect Distri!ution ?'stems
>. Multi.Channel or )'!ri" Distri!ution ?'stems
1. Direct Distribution S+ste3s
,n "irect "istri!ution s'stem the mar(eter reaches the target consumer "irectl'
$ithout the use of an' interme"iar'. The "istri!ution chain is small an" no other art'
can ta(e o$nershi of the ro"uct !eing "istri!ute". The "irect "istri!ution s'stem can
!e further su!."ivi"e" on the !asis of the metho"s of communication that ta(es lace
"uring sale !et$een mar(eter an" consumer. These metho"s are+
Direct Mar(eting ?'stems
,n this s'stem the consumer !u's the ro"uct !ase" on information
gaine" from imersonal contact $ith the mar(eter li(e !' visiting the
mar(eterKs $e!site or or"ering from the mar(eterKs catalog. Br he !u's !ase"
on information gathere" through some ersonal communication $ith a
customer service ersonnel $ho is not a saleserson an" can !e reache"
through a toll.free num!er.
Direct @etail ?'stem
,n this t'e of s'stem the mar(eter oerates his o$n retail stores. A
erfect e*amle of this s'stem is ?tar!uc(s.
/ersonal ?elling ?'stems
,n this s'stem the "istri!ution of the ro"uct is carrie" for$ar" !' eole
$hose main resonsi!ilit' is creating an" managing sales 1for instance a
saleserson:. )e ersua"es the !u'ers into lacing an or"er. This or"er ma'
not !e han"le" !' the saleserson !ut through $e!sites or toll.free telehone
num!ers. The sales erson la's a vital role here in generating sales.
Assiste" Mar(eting ?'stem
,n this form of "istri!ution s'stem the mar(eter han"les the "istri!ution
of his ro"uct an" hels it reach "irectl' to the en" user. )o$ever he nee"s
assistance from others to srea" a$areness a!out his ro"uct among the
customers. An e*amle of assiste" mar(eting s'stem is e.!a'& here the !u'ers
an" sellers are !rought together for a fee. Agents an" !ro(ers can also !e
inclu"e" in this categor'.
5. "n#irect Distribution S+ste3
,n in"irect "istri!ution s'stem the mar(eter inclu"es interme"iaries or other
mem!ers in his "istri!ution chain. These resellers ma(e sure the ro"uct reaches the
en" user& $hile erforming their "uties the' ta(e comlete o$nershi of the ro"uct.
)o$ever the reseller ma' sell ro"ucts on a consignment !asis $herein the reseller
a's for the ro"uct onl' $hen the ro"uct is sol". The resellers ma' !e e*ecte" to
ta(e u a fe$ resonsi!ilities to hel !oost the sales of the ro"uct.
,n"irect metho"s inclu"e the follo$ing+
?ingle./art' ?elling ?'stem
,n this s'stem the mar(eter involves another art' to sell an" "istri!ute
his ro"uct to the en" user. An e*amle of single.art' selling can !e $hen the
ro"uct is sol" through large store.!ase" retail chains or through online
retailers. ,n this case the "istri!ution s'stem is also referre" to as tra"e selling
s'stem.
Multile./art' ?elling ?'stem
,n multile.art' selling s'stem the "istri!utor involves t$o or more reseller in the
"istri!ution rocess !efore the ro"uct reaches the en" user. This is most li(el' to
haen $hen a $holesaler !u's the ro"uct from the manufacturer an" then sells it
to the retailer.
>. -uti(C/!nne %9+bri#$ Distribution S+ste3
A mar(eter is sai" to !e using a multi.channel or h'!ri" "istri!ution s'stem
$hen he utiliAes more than one "istri!ution "esign. As $e have stu"ie" earlier in the
e*amle of ?tar!uc(s& multile "istri!ution "esigns are ut to use in the "istri!ution of
its ro"uct. ,t uses a "irect retail s'stem $hen it sells its ro"ucts in coman'.o$ne"
stores& a "irect mar(eting s'stem !' selling via "irect mail an" single art' selling
s'stem is ut to use $hen its ro"ucts are sol" through grocer' stores. Aart from
these other "istri!ution s'stems are also ut to use.
Multi.Channel "istri!ution s'stem is a"vantageous as it e*an"s the "istri!ution
s'stem an" more customers can !e reache". The ossi!le "isa"vantage again is
channel conflict of $hich the mar(eter shoul" al$a's !e cautious.1
htt34$$5552ttorso**et2com$marketi*g6home5ork6hel3$!istri1tio*$!istri1tio*6syste
ms6assig*me*t6hel36ttori*g2htm)
RE8ERENCES%A re,erences incu#e o, t/is #!te410.0<.2012$
htt+//$$$.ms*la!s.org/forum/e(onomi/<>>65.outsourcing."is.(a'na(.(ullanma.
(avrami.html
htt+//$$$.!i'me".com/ages/ma(aleler/ma(ale;1.htm
htt+//en.$i(ie"ia.org/$i(i/Transort
The )an"!oo( of #ogistics an" Distri!ution
Management % htt+//$$$.amaAon.com/,ntro"uction.Distri!ution.#ogistics.?tatistics.
/ractice/"/8;<1<78;;1 :
htt+//en.$i(ie"ia.org/$i(i/Thir".art'Qlogistics
htt+//$$$.ihracat115.com/lojisti(.htm
htt+//$$$."hl.
"iscoverlogistics.com/cms/en/course/rocesses/"istri!utionQlogistics/"efinition.js
htt+//$$$."ersiAlesene.com/Aof.>.?inif./aAarlama.Nonetimi."ers.notlari.vi"eo//aAarlama.
Ranallari.ve.FiAi(sel.Dagitim.968.html
htt+//en.$i(ie"ia.org/$i(i/Distri!utionQcenter
htt+//$$$.iimm.org/(no$le"geQ!an(/1Qlogistics.for.customer.satisfaction.htm