Page 192 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 10: Logistics and Distribution

Notes
Table 10.1: List of Activities
Primary Activities Secondary Activities
1. Transportation 5. Product Packaging

2. Warehousing 6. Product Handling
3. Order Processing 7. Acquisition
4. Inventory Maintenance 8. Product Scheduling
9. Information Maintenance

Physical distribution is the process of making the end product reach the customers and it
encompasses all the activities in the physical flow of products from producer to customer. The
output of the logistics system is customer service, and how efficiently it is delivered is the
standard against which physical distribution systems are measured. To provide the appropriate
level of customer service, physical distribution managers must make decisions concerning
warehousing, inventory management and control and transportation system.

Did u know? Management of logistics involves planning, implementing and controlling
the physical flow of materials and final (finished) goods from point of origin to the point
of use, to meet customer requirements at a profit.

Figure 10.1: Components of Logistics Management

Logistics Management

Physical Supply Physical
(Material) Handling Distribution

Source of
Supply Plants Customers

10.1 The Concept of Logistics Management

The logistics concept is based on a total system view of the material and goods flow activity
from the source of supply to the final point of consumption. It recognizes the interconnections
and interrelationships between the multitude of functions involved in this movement from
source to final users and in doing so forces management to think in terms of an integrated
system rather than managing by parts. The logistics management task is concerned with the
integration and coordination of marketing activities in a way that end customers are served in
the most effective way and with a profit for the organization. Although managers have used
logistics in the military to fine-tune the process of delivery that is time and location specific,
there is a lag in the incorporation of military logistics requirements in the business sector.

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