Physical Distribution of Logistics

Logistics system analysis and design

Presented by,
DRISYA K
Roll no 27
Physical Distribution of Logistics

Physical distribution “involves

planning, implementing and controlling the
physical flow of materials and final goods from place of
production to the place of end use
to satisfy buyers needs”.
– Philip Kotler
 Logistics involves both physical distribution and physical supply
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 Objectives of Physical Distribution
Basically, two broad objective:
1. Attain customer satisfaction  Total Cost Concept d. Convenience
2. Profit maximization
 Customer Service Concept e. Accuracy
a. Time  Distribution Cost- service trade
b. Dependability offs

c. Communication 1. Achieve right balance

between them.
2. Flexibility is important
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in balancing the cost

 RELATION WITH MARKETING MIX

1 Product-physical Distribution 2 Price-Physical Distribution 3 Promotion-Physical

Distribution
• FMCG- Mass • Reciprocal Relationship • Grab the market
Distribution potential
• Perishable product-
shortest distribution

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 Components
Participants of physical distribution Component functions
in physical distribution of physical distribution
• customer service
1. Supplier • Planning the overall physical
• Order Processing – The distribution system
2. Manufacturer receipt and transmission
of sales order information. • In bound transport
3. Intermediaries
Wholesalers, Retailers • Transportation • Receiving – Raw material, orders
4. Agents – Selling, • Material handling • In plant warehousing
Manufacturing, C & F etc. • Warehousing • Inventory management
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• Order processing
 COMPONENTS OF
PHYSICAL DISTRIBUTION

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 Customer Service Order Processing

refers to the precisely-defined standard of to deliver the order as the customer expects,
customer satisfaction that a small business in the way they expect it, and when they
provides to its customers. expect it to be there.
 Once a standard is set a physical Thus, accuracy plays a vital role in successful
distribution system is then set up to reach order processing, as do procedures that
that goal at the lowest possible cost. minimize the order processing cycle.
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 Warehousing
Materials Handling
Inventory Control
refers to the process of receiving
inbound shipments, storing
to keep inventories in a desired  Material handling comprises merchandise, breaking down bulk
all of the activities associated materials, and ecommerce
state while continuing to
adequately supply customers. with moving products within fulfillment for delivery to the
a production facility, customer.
 Costs include funds invested warehouse, and Warehouse DC - keep goods for
in inventory, depreciation, and
transportation terminals. longer periods,
possible obsolescence of the
goods. fulfillment centers operate as
central distribution locations for
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quick shipments of merchandise
to customers and retail locations.
 Truckload – The favored shipping method for
Transportation most enterprises is trucking.
 Carrying primarily manufactured products (as
opposed to bulk materials), trucks offer fast,
Transportation is an indispensable component of frequent, and economic delivery to more
physical distribution. destinations in the country than any other mode.
 Different transportation modes (LTL, Parcel, Air Trucks are particularly useful for short-distance
Freight) enables retailers to make their goods and shipments, and they offer relatively fast,
services available in store, or at the customer’s consistent service for both large and small
doorstep. shipments.
Fortunately, a retail organization can use anyone,
or a combination of the following transport
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modes to offset some of the overall shipping cost:
 Transportation:

Less-Than-Truckload (LTL) – The transport of Intermodal – Small business utilize a combination

freight that does not require the entire space of of rail and truck transportation for specific
a full truckload. Because each truck contains segments of the transport. Overall costs are often
shipments from multiple clients going to significantly lower under this arrangement than
multiple similar locations, oftentimes it takes with single-mode transport.
longer for LTL freight to arrive.

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 Ocean Freight
Parcel
Air Freight

Package delivery or parcel The transport of goods by sea

Due to the relatively high cost delivery is the delivery of via shipping containers. Ocean
of air transport, small shipping containers, parcels, freight is the most common
businesses typically use air only or high value mail as single mode of transport used by
for the movement of valuable shipments. The service is importers and exporters in the
or highly-perishable products. provided by most postal country, and around the world.
customer service. systems, express mail, private
courier companies, and less
than truckload shipping
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 LOGISTICS SYSTEM ANALYSIS AND DESIGN
SYSTEM ANALYSIS

System analysis refers to the orderly and planned observation

of one or more segments in the logistics network or supply chain to

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determine how well each segment functions.
 LOGISTICS SYSTEM ANALYSIS AND DESIGN
Logistics system analysis Logistics system design

Logistics system analysis is a process of It is an important step in system development process,

collecting factual data, understanding the process involved, and occur after logistics system analysis. A new system is
Identifying problems and recommending feasible suggestions for Designed based on the requirements and
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improving the logistics system functioning. detailed analysis of the existing system.
Thank you!
Presented by,
DRISYA K