Distribution logistics subsystem

Logistic activities in the area of distribution is related to the market. This includes all tasks associated with the supply of products directly from the manufacture, sales from warehouses or from other regional dispatching centres.

Typically, this stage flows already applies to final products, but different situations can be identified such as: transport by specialized distribution logistics service provider, installation of product, servicing.

Problems of distribution logistics

Decisions taken in the field of distribution logistics are dependent on:

• Product Policy - especially taking into account the range of products, product development, handling, storage and warranty and post-warranty service,
• Terms of delivery policy - price level, division of obligations concerning the delivery of products to buyers, applicable discounts (volume and value)
• Communication policy - assumptions regarding advertising, promotion and direct sales, public relations
• Distribution policy - especially related to the organization of distribution channels, sales tasks carried out independently or by freelance intermediaries, level of supplier service.

Regional distribution centre in distribution logistics subsystem

Regional distribution centre is an independent economic entity, which collects and stores the final products or components, of one or more producers, in order to redistribute them to dealers, importers, partner companies or other subordinate entities.

We can distinguish three main stages of the logistics process that is implemented through the RDC:

• input - covers the planning and ordering of supplies, receiving deliveries and unloading,
• internal product management - involving the relocation of the resulting supply in the distribution centre,
• output - the acceptance of the order, organization and preparation of transport.

Benefits of regional distribution centres

Main benefits of RDC use:

• improving the quality and on-time deliveries
• increase the availability of goods, which means, simultaneously, raising the level of customer service
• improved process control of product movement within the supply chain
• cost reduction

Examples of Distribution logistics subsystem

• Freight forwarding: Freight forwarding is a service that arranges the transportation and storage of goods on behalf of another company. The freight forwarder typically handles the paperwork, handles customs clearance, coordinates delivery and may also provide warehousing services. Examples of freight forwarders include FedEx, UPS, and DHL.
• Order fulfillment: Order fulfillment is the process of taking an order, picking the items in the order, packing them, and shipping them to the customer. Examples of companies that provide order fulfillment services include Amazon Fulfillment Services and Shipwire.
• Inventory management: Inventory management is the process of tracking, managing, and replenishing inventory. This includes tracking inventory levels, setting reorder points, and ensuring that the right items are available when necessary. Examples of companies that provide inventory management services include Orderhive and inventory management software such as Fishbowl.
• Warehousing: Warehousing is the process of storing goods and materials in a warehouse. This includes goods that are waiting for delivery, goods that are waiting to be shipped, and goods that are in transit. Examples of companies that provide warehousing services include Amazon Fulfillment Centers and Iron Mountain.
• Logistics: Logistics is the process of coordinating the movement of goods and materials from one location to another. This includes planning routes, scheduling deliveries, and ensuring that goods are delivered on time. Examples of companies that provide logistics services include UPS and FedEx.

Limitations of Distribution logistics subsystem

Distribution logistics subsystem is an essential part of the supply chain, however, there are several limitations that must be taken into consideration when dealing with this subsystem. These include:

• Inaccurate forecasting: Forecasting is a difficult process and often leads to inaccurate estimations of demand and inventory levels, resulting in unbalanced stock levels and supply chain disruptions.
• Capacity constraints: Having limited storage space and transportation capacity can lead to delays in delivery and unfulfilled orders.
• Lack of proper communication: Poor communication between all parties involved in the supply chain can lead to delays and errors in order processing.
• Unreliable transportation: Poor transportation services can lead to delays in delivery, resulting in customer dissatisfaction.
• Lack of collaboration: Without adequate collaboration between suppliers and customers, it is difficult to ensure that the right products are delivered to the right place at the right time.
• Increased costs: As the complexity of the supply chain increases, so too do the associated costs.

Other approaches related to Distribution logistics subsystem

Introduction: The Distribution Logistics subsystem involves a range of activities related to the market, such as the supply of products from the manufacturer, sales from warehouses and regional dispatching centers.

• Supply Chain Management: This is a system that is designed to effectively manage the supply chain, with the aim of increasing efficiency and reducing costs. It involves managing the flow of goods and services, from the manufacturer to the customer.
• Logistics Planning: Planning is key to the efficient and cost-effective movement of goods. Logistics planners need to consider the best way to move goods from the manufacturer to the customer, considering factors such as the cost of shipping, the speed of delivery, and the reliability of the service.
• Warehouse Management: This involves managing the storage, handling and distribution of goods from warehouses. It includes activities such as inventory management, order picking, and shipping.
• Transportation Management: This involves the planning, scheduling and coordination of the transportation of goods. It includes activities such as route planning, scheduling, and monitoring of shipments.
• Distribution Network Design: This involves the design of a network of warehouses and distribution centers to ensure the efficient delivery of goods to customers.

Summary: The Distribution Logistics subsystem involves a range of activities related to the market, such as Supply Chain Management, Logistics Planning, Warehouse Management, Transportation Management and Distribution Network Design, to ensure the efficient delivery of goods to customers.

Distribution logistics subsystem — recommended articles

Supply logistics subsystem — Coordinative function of logistics — Logistics — Distribution cost — Contract logistics — Procurement logistics — Role of transportation — Optimization of transport — Logistic process

References

• Farahani, R. Z., Asgari, N., & Davarzani, H. (Eds.). (2009). Supply chain and logistics in national, international and governmental environment: concepts and models. Springer Science & Business Media.
• Magee, J. F., Copacino, W. C., & Rosenfield, D. B. (1985). Modern logistics management: Integrating marketing, manufacturing and physical distribution (Vol. 22). John Wiley & Sons.
• Oum, T. H., & Park, J. H. (2004). Multinational firms’ location preference for regional distribution centers: focus on the Northeast Asian region. Transportation Research Part E: Logistics and Transportation Review, 40(2), 101-121.
• Poist, R. F. (1989). Evolution of conceptual approaches to the design of logistics systems: a sequel. Transportation Journal, 35-39.
• Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution management: Understanding the supply chain. Kogan Page Publishers.
• Rutner, S. M., Gibson, B. J., & Williams, S. R. (2003). The impacts of the integrated logistics systems on electronic commerce and enterprise resource planning systems. Transportation Research Part E: Logistics and Transportation Review, 39(2), 83-93.