DISTRIBUTION LOGISTICS AND

SUPPLY CHAIN MANAGEMENT

PRESENTED BY
VIBIN VELU
RANJITH KUMAR
KEVIN BOSE
RAMADOSS AKSSHAYA
DISTRIBUTION
 DISTRIBUTION LOGISTICS (Physical distribution)

efficient and effective product distribution

 CHANNEL MANAGEMENT

purchasing
storing
conversion of inputs into products
physical distribution of the input products
channel fns. of taking the product to the ultimate consumers

VENDORS--------------------------------------------CUSTOMERS
RAW MATERIALS---------------------------------END PRODUCT
SUPPLY CHAIN
 Supply chain-value chain
 Reduced cost
 Improved service
DISTRIBUTION LOGISTICS
 Confers place and time utility on the product
 Helps build clientele
 Promising area for cost reduction
COMPONENT FUNCTIONS OF DISTRIBUTON
LOGISTICS
 Planning the physical distribution system
 In plant-warehousing
 Transportation
 Field warehousing
 Receiving
 Handling
 Secondary transportation
 Inventory management
 Order processing
 Accounting/record keeping
 Communication/reporting
3 MAJOR FUNCTIONS
 TRANSPORTATION
 WAREHOUSING
 INVENTORY MANAGEMENT
Designing – Distribution Logistic System
Steps involved –
Articulating distribution objectives and Prescribing
the service level to be achieved in product delivery
Finding out what the customers and channels want
in product delivery.
Finding out what the competitors do
Optimizing the costs and Tackling the cost- Service
Tussle
Providing for flexibility in the system
Distribution Objectives & service level in
product delivery
Distribution objectives of the firm must be properly
articulated.
 minimum service level to be guaranteed
The design should be able to meet with the promises
given to the customers
Ex: dominos
Finding out what the customers want in
product delivery
Customers expectations – most important task in this

function
Timely delivery & exceptionally speedy delivery in

times of emergency.

Ex : DHL;UPS;DELL
Finding out what competitors do
Competitors policies should be analysed.
Different level of services they follow in product
delivery.
Opt for the best suitable one.
Optimizing costs and tackling the cost-
service tussle.

Service level
Costs

Ex: Asian Paints

Cost Distribution in Logistics
6%
5%
27%
Customer Service/
order entry
Administration

Transportation

Warehousing
39%
Inventory carrying

23%
Providing for flexibility in the System
Flexibility of the system - in case of economical issues
Flexibility should be ensured at the time of designing
the physical distribution system.
Marketing Channels - Consumer
Products
Marketing Channels - Business Products
Transportation
The movement of products.

Transportation modes
Railroads—heavy, bulky full carloads of freight
Trucks—flexible schedules, speed and access
Waterways—heavy, low-value non-perishables
Airways—fast delivery, high-value or perishable
goods
Pipelines—bulk petroleum and chemicals
General Distribution of Transport modes
0.4%
13.2%

Railroads
41.7%
16.5% Trucks
Pipelines
Waterways
Airways

28.2%
Tasks-Transportation Management
Choosing the right mix of transport modes
Routing
Operational plans
Control of transportation costs
Control of Transportation Cost

Transportation cost is a major cost in most businesses

Savings in transportation cost can be reailsed by:
(a) Optimizing the mix of transport modes
(b) Reducing the transport lead and lead-time
(c) Eliminating multiple and wasteful transfer and
handling of products
Examples:
Warehousing
Second major component of physical distribution
Major steps involved are
(a) Designing a Warehousing System
(b) Determining the Location and Size of the
warehouses
(c) Improving warehousing effectiveness
Inventory Management

 Inventory costs keep rising

- Warehouse rent, handling cost etc.

 Optimum Inventory
- less stock (stock-out situation).
- Compromise between cost and service.
 Ordering Time
- Sufficiently before inventory becomes zero.
- Longer the lead time

 Order Quantity
- Ordering cost and inventory cost
- Higher the quantity ordered, lesser the ordering cost but
more inventory cost.
- Inventory cost should be bothered than ordering cost.
Economic Order Quantity
Distribution

Distribution needs integrated handling

- High cost transportation incurs higher price.

Outsourcing of logistics
- Higher service standards
- Cost effective
FedEx, Blue Dart, DHL etc.
Thank You