VICENTE, JUDE MICHAEL RUTOL DISTRIBUTION MANAGEMENT

BSBA 4B QUIZ 1 TO 5

1) What are the primary logistics activities?

Logistics activities or Functions of Logistics

1) Order processing

The Logistics activities start from the order processing which might be the work of the
commercial department in an organization. The commercial department is the one who
ensures that the payment terms and the delivery terms have been met and then
processes the order from within the company. Basically, the commercial team accepts
the order from the customer and places the order to the warehouse. If the customer has
given the payment, a commercial team makes the entry into the system and tells the
warehouse that the customer has given an order of 10 units so the warehouse needs to
deliver 10 units.

In many companies, the entry from commercial also deducts the inventory in the
warehouse. So if the commercial team has given the go-ahead for a purchase order of
10 units, the available inventory will automatically be deducted by 10 units so that
double ordering does not happen. This is an important step in logistics activities
because any mistake in this step (wrong entries of quantity, delivery address etc) can
affect the whole logistics process.

2) Materials handling

Material handling is the movement of goods within the warehouse. It involves handling
the material in such a way that the warehouse is able to process orders efficiently.
Although it may sound a mundane task, it is an important one and an ongoing activity in
any warehouse. For a small shop with 100 products, it is very easy to move
one product from one place to another. But IF this small shop was not sure WHERE the
products are kept, the shopkeeper will have to search for the order and the product
every time he receives the order. He will have to search this in all the 100 products that
he has and then he will have to move the other products so that he can give the ordered
product to the customer.

Now multiply this scenario by 100 times. Warehouses of large companies are
sometimes half a mile or more in size. Imagine the amount of material stored in the
warehouse. If the warehouse manager does not know where the material is stored and
how he is going to bring it to the dispatch center of the warehouse, he will be in big
trouble and his productivity and efficiency will take a big hit. That is why materials
handling is an important function of logistics.

3) Warehousing

If we take the example of LG or Samsung, these are consumer durable companies

which are present in multiple countries. Their manufacturing might be at one point, but
the distribution is all across the world. Thus, warehousing plays a huge role and is one
of the important Logistics activities.

The important point in warehousing is that the warehouse should be nearby to the
dealer or the distributors’ place and it should facilitate the easy delivery of goods. If
there was a product which was from a branded company, but which takes 1 week to
deliver, then this product might not move as much in the market as another product
which is taking 2 days to deliver even though it is unbranded.

4) Packaging

There are two types of packaging – One which the customer sees on the shelf of
supermarkets or hypermarkets where the package appears attractive and makes the
customer buy the packages. The other is transport packaging where the products are
packed in bulk so as to avoid any breakage or spillage and yet allow them to transfer
huge volumes of the product safely from one place to another.

5) Inventory control

If a firm has 100 units of a product in stock, but the demand is only of 10 units, then the
company has uselessly invested in 90 units. This is money which can be used as
a working capital and it is money on which banks are applying interest. On the other
hand, another firm had a demand of 500 units, but they have manufactured only 200
units thinking that demand will be less. Now they have lost the orders which is
an opportunity cost.  The perfect firm will be one, which has manufactured 100 units,
knows there will be 50 units of demand and is ready even if demand doubles. But they
are continuously monitoring the demand and are ready for it without investing much in
manufacturing.

6) Transportation

Now we come to one of the major logistics activities which is one of the most resources
heavy and revenue heavy segment of logistics. There is a single reason that
transportation is costly – Fuel. Be it petrol, Diesel or gas, fuel is costly, and it is mostly
consumed in transportation activities. This is why companies spend lakhs to control the
transportation expenses because it is one of the highest variable expense to any
company.

2) Which factors influences the channel design?

Forces for Change

 In the face of inertia, tradition, entrenched industry practice, and a lack of

alternatives, most firms stayed with their established channels and seldom
changed the way they exercised control. Three forces are now changing the
customary rules of channel management: proliferation of customers’ needs, shifts
in the balance of channel power, and changing strategic priorities. Channels
have become dynamic webs, comprising many direct and indirect ways to reach
and serve customers.

Proliferation of Customers’ Needs

 When markets are simple and stable, the appropriate channel configuration is
usually evident. Firms will distribute directly when they want to closely control
selling, serving, and pricing or have only a few readily identifiable customers.
When the market requires a variety of related goods in small quantities,
companies prefer to use intermediaries because of their wide coverage (due to
economies of scope and scale), experience, and specialized distribution in their
industries. Theoretically, the higher the required investments in specialized
assets for servicing the end customer, the more appropriate are direct
channels. However, these guidelines for channel configurations are obscured
when markets are fragmented into segments so diverse that many products are
mass customized. Three factors contribute to mass customization and, hence,
market fragmentation.

Expanding capabilities for addressability and variety.

 Firms have greater ability to address individually each customer or small
subsegment of their market with a combination of database technology5 and
flexible manufacturing.6 Now firms can engage in a direct dialogue with their
customers and appreciate the diversity of their needs.

Channel diversity.
 Increasingly, firms are shifting from centralized batch production to localized,
one-at-a-time production. Meanwhile, distributors, not just manufacturers, are
exploiting the generic capabilities for addressability and variety to automate many
 functions, such as order receipt, shipping, inventory management, and stock
replenishment, so they can respond to orders more rapidly and cheaply and
customize products.7 The net result is continuing turmoil and channel diversity.

Customer expectations.
 Customers have become accustomed to the benefits of customized products and
greater services, ready availability through their preferred channel, and rapid
order fulfillment.9 Thus customers increasingly demand improved performance
that is based on what they now know is possible.
 In short, the new ability to address customers in small groups encourages
channel diversity. Addressability and diversity together raise customer
expectations. And these expectations put further strain on distribution channels.

3) According to you, what are the duties of an ideal distribution manager?

Your role as a logistics and distribution manager is to organize the storage and
distribution of goods. You'll ensure that the right products are delivered to the right
location on time and at a good cost. You may also be involved in transportation, stock
control, warehousing and monitoring the flow of goods.
Understanding the whole supply chain is important so that you can coordinate it
effectively and liaise with suppliers of raw materials, manufacturers, retailers and
consumers.
A logistics or distribution manager’s key task is to organize the safe and efficient
storage and distribution of goods, and to ensure that orders are fulfilled (carried out)
correctly. There's some overlap with the position of warehouse manager, although
logistics managers' work is at a more macro level – they analyses logistical problems
and plan transportation routes for vehicles carrying goods, for example.
Other responsibilities include:
 organizing shipments
 coordinating drivers, vehicles, loads and journeys
 operating IT systems to manage timings, costs and stock levels
 analyzing data to assess performance, discover logistical problems and devise
plans for improvements
 negotiating and agreeing contracts
 planning for and negotiating technical difficulties
 preparing paperwork for regulatory bodies
 liaising with and managing staff and shifts
 monitoring stock and managing waste
 ensuring health and safety standards are met.
4) What are the skills you possess as a distribution manager that differentiates
you from other contenders?

 The skills that I believe I posses as a distribution manager that differentiates me

from other contenders are I have very good communications skills I Understand
written information, I Understand spoken information and I can Speak clearly so
listeners can understand. And I can reason and solve the problem for example I
can Analyze ideas and use logic to determine their strengths and weaknesses,
notice when something is wrong or is likely to go wrong. Recognize the nature of
a problem. Use reasoning to discover answers to problems.

I can also manage oneself, people, time, and things I can Check how well one is
learning or doing something. I can Motivate, develop, and direct people as they
work. And I can Decide how to spend money to get the work done and keep track
of how the money was used.

 Lastly, I can work with people, Change behavior in relation to others’ actions. I
can Persuade others to approach things differently and Solve problems by
bringing others together to discuss differences. And Be aware of others’
reactions and understand the possible causes. And I can Use several methods to
learn or teach new things.

5) What is the one thing that you find extremely difficult in the profile of a
distribution manager?

 Level 4 positions typically demonstrate advanced skills in budget management,

business development, communications, and leadership and execution of
objectives critical to unit's success; provide detailed plans for changes to specific
policies and procedures that may result from trends and changes in overall
direction of functional and/or organizational responsibilities; monitor completed
work of others to ensure soundness of approach, effectiveness in meeting
requirements, the feasibility of recommendations and adherences to
requirements; evaluate and enhance practices that promote a strong
commitment to inclusionary practices which support diversity, safety, and
environmental consciousness throughout the University; demonstrate diplomacy
in persuading and influencing a variety of people to achieve results; resolve
complex, controversial or unprecedented issues and problems, and demonstrate
sound judgment by considering values, risks, impact and implications of actions
throughout organization; set clear expectations and hold management team
accountable for effectively coaching, mentoring and motivating their respective
staffs; develop, evaluate, enhance, and/or implement quality improvement
practices, processes, procedures, or policies that have an impact on University
operations.