Distribution in logistics refers to the overall management of the movement of goods from the warehouse to the point of sale. This can include a variety of processes, from transportation and packaging to inventory management, stock control, quality and quantity control, information processing, and customer relations. The ultimate focus is on achieving efficient distribution and smooth and rapid movement of finished products to end customers.

Distribution management is part of the supply chain process that ultimately delivers goods to end consumers or users. Distribution management is essentially the management of the movement of goods, whether it is from wholesaler to retailer or from retailer to consumer.

Key aspects of distribution management

Order processing: Receiving, filling, and shipping customer orders.

Inventory management: Maintaining the right amount of stock on hand to meet customer demand without overstocking or running out of stock.

Transportation: Moving goods from one location to another, including selecting the most efficient mode of transportation and managing transportation costs.

Warehousing: Storing goods until they are needed for shipment.

Customer service: Responding to customer inquiries and complaints, and resolving any issues that arise.

Distribution channels

Distribution channels are the paths that goods take from the manufacturer to the end consumer. There are many different types of distribution channels, including:

Direct distribution: The manufacturer sells goods directly to the consumer, such as through a company website or retail store.

Indirect distribution: The manufacturer sells goods to one or more intermediaries, such as wholesalers or retailers, who then sell the goods to the consumer.

Exclusive distribution: The manufacturer only sells goods to a limited number of distributors, who then have exclusive rights to sell the goods in a particular geographic area.

Selective distribution: The manufacturer sells goods to a select number of distributors, who are chosen based on their ability to reach a target market.

Intensive distribution: The manufacturer sells goods to as many distributors as possible in order to reach the widest possible market.

The choice of distribution channel will depend on a number of factors, including

  • The type of product: Some products are more suitable for direct distribution than others. For example, high-value products may be better suited for direct distribution, while low-value products may be better suited for indirect distribution.
  • The target market: The distribution channel should be chosen so that it reaches the target market as effectively as possible.
  • The manufacturer's resources: The manufacturer will need to have the resources to support the chosen distribution channel. For example, if the manufacturer chooses to distribute directly, they will need to have the infrastructure in place to handle order processing, shipping, and customer service.

Effective distribution management can

  • Reduce costs: By optimizing the distribution process, companies can reduce transportation, warehousing, and inventory costs.
  • Improve customer service: By ensuring that goods are delivered on time and in good condition, companies can improve customer satisfaction.
  • Increase sales: By making goods more readily available to customers, companies can increase sales.

Distribution management is a complex and challenging task, but it is essential for companies that want to be successful in the marketplace.