physical-distribution.ppt distributiin mark

Marketing

1. PHYSICAL DISTRIBUTION

2. Logistics & Supply Chain
Logistics
Component parts
& Raw material
In-process inventory Finished goods
Supply Chain

3. Physical Distribution
•Creation of customer is task of mktg.
•Product availability leads to satisfaction
•To achieve this value adding generally have
a distribution activity known as distribution
system, traffic mgt., mktg. logistics, or
physical distribution
•So it is a mktg. activity that concerns the
handling & movement of goods

4. Physical Distribution
•It includes all those activities concerned
with the efficient movement of goods from
the place of production to the place of
consumption
•It involves the handling of raw material
fabricates parts, supplies & finished goods
from producers to consumers via
intermediaries

5. Physical Distribution
•William Stanton: Involves the mgt.of
physical flow of products & establishments
& operation of flow systems
•Philip Kotler: Involves planning,
implementing, & controlling the physical
flow of material & final goods from the
point of origin of use to meet customer need
at a profit

6. Objective of Physical Distribution
•Basically two broad objective
•1. Attain customer satisfaction
•2. Profit maximization
•3. Getting the right product, at the right
place, at the right time, in right quantity, at
the right customer at the lower cost
•4. Proper co-ordination of distribution
acivities

7. Objective of Physical Distribution
•5. To use powerful tool of competitive
mktg.
•6. To provide better service of lower prices
•7. To increase profit margin

8. Objective of Physical Distribution
–Meetings standards of customer service for
•Timeliness of order fulfillment
•Accuracy of order fulfillment
–Reducing total distribution costs
•Inventory levels against warehousing costs
•Materials costs versus transportation costs
•Distribution costs against customer service standards
•Overall goal is to achieve the lowest total distribution cost
compatible with the firm’s customer service objectives.
–Reducing cycle (process completion) time
•Faster processes for increased customer service

9. Significance of Physical Distribution
•Creation if utilities: Place –Transportation
Time –Warehousing
●Improved consumer service
●Cut in distribution cost
●Market share
●Price stabilization
●Play vital role where production location &
markets are distanced

10. Cost of Physical Distribution
Functions

11. Participants in physical distribution
•Supplier
•Manufacturer
•Intermediaries
Wholesalers, Retailers
•Agents –Selling, Manufacturing, C & F etc.

12. Component functions of physical
distribution
•Planning the overall physical distribution
system
•In bound transport
•Receiving –Raw material, orders
•In plant warehousing
•Inventory management
•Order processing

13. Component functions of physical
distribution
•Packaging
•Dispatch of goods
•Out bound transport
•Field warehousing
•Customer service

14. Components of physical
distribution
•Order Processing
–The receipt and transmission of sales order information
•Order entry
•Order handling
•Order delivery
–Electronic data
interchange
•A computerized means
of integrating order
processing with production,
inventory, accounting, and transportation

15. Order processing
•Series of logical steps from receiving orders
to dispatch –
there should be a standard procedure for
receiving the orders, handling orders,
granting of credit, invoicing, dispatching,
collecting the bills and post dispatch
adjustments

16. Steps in order processing
•Communication of orders –Verbal or written
•Credit check
•Inventory check
•Order of dispatch
•Intimation to customer
•Dispatch of goods
•Collection of payments

17. Material Handling

18. Material Handling
•Sub system of PDS
•Stands for movement & handling of goods
•Represents product handling from plant to
warehouse & warehouse to place of loading
•An agent of cost reduction & improved
customer service
•Reflects on efficiency & speed of
warehousing operations
•Efficient & effective MHS contributes
efficiency & effectiveness of total PDS

19. MH operations performed in
following stages
•Unloading incoming material from transport
vehicles
•Moving unloaded material to assigned warehouses
•Lifting the mat. from warehouses during order
picking
•Moving the material for inspection & packing
•Loading packages/boxes to transport vehicles

20. MH Equipments & Systems
•Manual –Use of man power & animal
•Mechanised system –wheeled trolleys,
forklift trucks, side loaders, mobile cranes,
conveyors –wheel, roller, belt, chain
•Semiautomatic system –sorting device
robotics

21. Warehousing

22. Warehousing
Storage
(Location)
Balancing act

23. Warehousing
•An act of storing and assorting the finished
goods so as to create maximum time utility
at minimum cost
•Sub function –Storage, movement,
assorting, hold, consolidation, break bulk,
packing,

24. Advantage of Warehousing
•Serves as safeguard
•Make provision for unloading
•Serves economically at lower prices
•Helps in determining the channel of distribution
•Assist in maintaining continuous sales
•Balancing demand & supply
•Stabilizing prices
•Reduces need for instant transportation