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GU 02 Distribution Network Planning S

The document discusses distribution network planning. It describes distribution as involving physical flow of goods from manufacturers to retailers to customers, with distributors in between. Distribution management involves order processing, warehousing, finished goods management, material handling, shipping, and transportation. Distribution channels are formed to address functional performance, reduce complexity, and allow for specialization. The central focus of distribution is efficiency of time, place, and delivery utility. Distribution planning occurs at strategic, aggregate, and operational levels and involves determining inventory needs, throughput volume, order quantities, geographic customer spread, and delivery speed.

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53 views

GU 02 Distribution Network Planning S

The document discusses distribution network planning. It describes distribution as involving physical flow of goods from manufacturers to retailers to customers, with distributors in between. Distribution management involves order processing, warehousing, finished goods management, material handling, shipping, and transportation. Distribution channels are formed to address functional performance, reduce complexity, and allow for specialization. The central focus of distribution is efficiency of time, place, and delivery utility. Distribution planning occurs at strategic, aggregate, and operational levels and involves determining inventory needs, throughput volume, order quantities, geographic customer spread, and delivery speed.

Uploaded by

Tanmay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Physical Distribution Network Planning

1
Distribution Network Planning (DN/SCND)
• Distribution:
• A supply channel is composed of three structures.
– At one end of the channel is the manufacturer. The manufacturer
focuses on the development and production of products and
originates the distribution process.
– The terminal point in the channel is the retailer who sells goods and
services directly to the customer for their personal, non-business
use.
– In between the two lies a process called distribution, which is more
difficult to define. One ultimately could maintain that distributors
include all enterprises that sell products to retailers and other
merchants—and/or to industrial, institutional, and commercial
users—but do not sell in significant amounts to the ultimate
customer.
• Distribution involves a number of activities centered around a physical
flow of goods and information to the outbound side of supply chain
management.
Fig: Distribution Network
Distribution Network Planning (DN/SCND)
• Management of the outbound flow involves these elements:
– Order processing
– Warehousing and storage
– Finished goods management
– Material handling and packaging
– Shipping
– Transportation
• Distribution channels are formed to solve three critical distribution
problems: functional performance, reduced complexity, and
specialization.
• The central focus of distribution is to increase the:
– Efficiency of time, place, and delivery utility.
• As the supply chain grows more complex, costs and inefficiencies
multiply in the channel.
Distribution Network Planning (DN/SCND)
• Distribution Planning:
• The five basic questions need to be answered.
i. How much inventory ?- Depends on production and
marketing activities.
ii. What volume throughput?-Volume and product range.
iii. How many orders?-Order size.
iv. How far?-Geographical spread of customers.
v. How quickly?-Fast and reliable delivery service.
Distribution Network Planning (DN/SCND)
• Distribution Planning:
Distribution planning can be at three levels:
i. Strategic planning – Long term (1-3 years)
– Warehousing needs
– Product range/packaging evaluation ;
– Speed of service/inventory policies;
– Organizational relationships;
– Socio-economic trends.
Distribution Network Planning (DN/SCND)
ii. Aggregate Planning- Medium term (3-12 months)
– Annual forecast-against production/marketing input.
– Resource allocation-to meet perceived changes against
annual forecast.
– work-load planning for 3-12 months

iii. Operational Planning – Short term: daily-weekly-monthly


– Daily/weekly/monthly resources allocation to meet
demand
– Daily/weekly/monthly work-load planning:
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