PHYSICAL

DISTRIBUTION
The process of planning, implementing, and controlling efficient,
effective flow and storage of goods, services, and related information
from point of origin to point of consumption for the purpose of
conforming to customer's requirements.
SUPPLY CHAIN
1.Order Processing: -

• The starting point in a physical distribution system is order processing,

which is a set of procedures for receiving, handling, and filling orders
promptly and accurately
• Electronic data interchange (EDI): - Between customer and supplier
orders, invoices, and other business functions are transmitted by
computer
• Originally, EDI required a direct computer link between supplier and
customer, now it is being conducted via the Internet
• EDI can trim the cost of order processing significantly, which in turn
may reduce purchase prices
2. Inventory Control: -

• The goal of inventory control is to satisfy the order-fulfillment

expectations of customers while minimizing both the investment and
fluctuations in inventories

• Just-in-Time: - JIT combines inventory control, purchasing, and

production scheduling

• Applying JIT, a firm buys in small quantities that arrive just in time for
production and then it produces in quantities just in time for sale
3. Inventory Location and Warehousing: -

• Management must make critical decisions about the size, location, and transportation
of inventories
• One key consideration in managing inventories is warehousing, which embraces a
range of functions, such as assembling, dividing, and storing products and preparing
them for reshipping

4. Materials Handling: -

• Selecting the proper equipment to physically handle products, including the

warehouse building itself, is the materials handling subsystem of physical
distribution management
• Equipment that is well matched to the task can minimize losses from breakage,
spoilage, and theft - Efficient equipment can reduce handling costs as well as time
required for handling
5. Transportation: -

• Management must decide on both the mode of transportation and the

particular carriers

• The leading modes of transportation are railroads, trucks, pipelines,

water vessels, and airplanes

• Using two or more modes of transportation to move freight is termed

intermodal transportation;
MODE OF TRANSPORTATION

MODES OF