Physical Distribution Channel

3364 Words14 Pages
Physical Distribution Management Part of logistics management, physical distribution is concerned with the transporting of merchandise, raw materials, or by-products, such as hazardous waste, from the source to the customer. A manager of physical distribution must also assess and control the cost of transporting these goods and materials, as well as to determine the most efficient way to store them, which usually involves some form of warehousing. Hence, physical distribution (PD) is concerned with inventory control, as well as with packaging and handling. Customer relations, order processing, and marketing are also related activities of PD. In essence, physical distribution management (PDM) involves controlling the movement of materials…show more content…
Physical distribution activities have recently received increasing attention from business managers, including small business owners. This is due in large part to the fact that these functions often represent almost half of the total marketing costs of a product. In fact, research studies indicate that physical distribution costs nationally amount to approximately 20 percent of the country 's total gross national product (GNP). These findings have led many small businesses to expand their cost-cutting efforts beyond their historical focus on production to encompass physical distribution activities. The importance of physical distribution is also based on its relevance to customer satisfaction. By storing goods in convenient locations for shipment to wholesalers and retailers, and by creating fast, reliable means of moving the goods, small business owners can help assure continued success in a rapidly changing, competitive global market. A SYSTEM APPROACH Physical distribution can be viewed as a system of components linked together for the efficient movement of products. Small business owners can ask the following questions in addressing these components: * Customer service—What level of customer service should be provided? * Transportation—How will the products be shipped? * Warehousing—Where will the goods be located? How many warehouses should be utilized? *
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