Distribution logistics - definition, basics, examples

https://www.maschinenmarkt.international/distribution-logistics--definition-basics-
examples-a-865509/
21.09.2019 Author / Editor: Sebastian Hofmann / Theresa Knell.
This article provides the essential information about distribution logistics:
Definitions,
Goals,
Basics,
Discussions

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Distribution logistics ensures that
manufactured goods reach the customer quickly and reliably.
Distribution logistics comprises
distribution of goods - from manufacturing companies to customers.
Customers are either final customers, distributors or processors.
It includes goods handling, transport and interim storage.

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Packaging must be adapted to transport requirements in order to be able to deliver the
product safely.
Sustainably, structured information, quick decision-making and control processes are
essential for implementing successful transport logistics.

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Objectives of distribution logistics

Which distribution modalities do I use to transport my goods?

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Key objectives of sales logistics
The right objects must be available to customers in the right quantity
 at right time
 with the right information
 at the right cost
 in the right place
 with the right quality.

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Distribution Logisticians
Have three goals:
1. Availability:
o Sufficient quantity of products is available to customers.
o Customers should be able to receive goods promptly and without great effort.

2. Cost minimization:
 keep shipping and delivery costs as low as possible. Transport, storage,
shortage and order processing.
 At the same time, however, delivery is to become faster, and more
environmentally friendly.

3. Influence customer: Display in retail shop.

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Optimize logistics services
Delivery reliability, delivery flexibility, delivery time and delivery physical condition
should meet high quality demands.

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TASKS OF LOGISTICS IN SALES
Three fields of activity:

1. Operational control: Operational tasks refer to the processing of orders,

2. Tactical control:
 fleet management,
 defining minimum purchase quantities,
 service level objective
 transport on its own or subcontract.

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3. Strategic control:
 marketing strategies,
 development of distribution network: location and both horizontal and vertical
networking.
o Horizontal networking: The creation of collaborative value adding
networks between companies. Example: Company A cooperates with
company B with complementary products to make distribution logistics
more cost effective for both companies.
o Vertical networking: Describes the internal combination of areas and
departments - from production to the customer.

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Direct and indirect transport logistics
One of the most important tactical considerations for sales logisticians is
how shipping should take place. Two variants:
Direct distribution involves the direct contact between the manufacturer and the
retailer. This variant is used for products with the following characteristics:
 High-price e.g. large screen LCD TVs, Double door fridges, Cars, Trucks
 Narrow customer base
 High complexity e.g. Ultra sound, Xray, ICU machines
 Much need for instructions e.g. as above.
 High sensitivity e.g. Diesel and Petrol to pumps; milk to vendors in sealed
bags / sealed containers
An advantage of direct distribution is the close contact with the retailer. It also saves
manufacturers the cost charged by an intermediary.

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Materials Handling
What is Conveyor & Robotic technology? Applications & challenges

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Distribution channels

 Wholesale is ideally suited for the sale of large quantities. In this sector,
manufacturers usually generate significantly higher sales volumes than in the retail
sector, but also with significantly lower profit margins.

 E-commerce is growing rapidly and presents the industry with completely new
challenges, such as same-day delivery / 2 hours !.

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Key Parameters
Delivery reliability
How many products from one order did the manufacturer deliver on time?
Delivery reliability = (Quantity delivered on time / Requested quantity) × 100
Delivery performance
How punctual is the product delivered by the manufacturer?
Delivery performance = (number of deliveries on time / total quantity of orders) × 100
Transport damage rate
How many goods have reached the customer undamaged?
Transport damage ratio = (no. of damaged goods / number of all delivered goods)×100
Utilization rate of means of transport
What is the capacity utilization of means of transport (from the manufacturer's point of
view)?
Utilization rate of means of transport = (actual load / possible load) × 100

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Transport logisticians must keep the number of empty runs as low as possible.
The first three indicators have a significant effect on customer satisfaction.
The degree of transport utilization is particularly important for the manufacturer.
Finally, transport capacities should be utilized as fully as possible, so that no or at least
only a few empty runs are necessary.

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Process with regular control of the benchmark values and a comparison with the
market figures is used for optimising transport logistics.
is important to ensure that the controlling system is aligned with supply chain
management and does not pose a black box for users.
If problematic values should still exist, the following measures can be taken:
 Staff training
 Adjustment or quality improvement in Packaging
 Change of the transport service provider
 Recourse to a more efficient Goods Management System or a better technology
 Improvement of internal and external coordination / communication

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How to find the ideal racking system for your warehouse - types & tips
Distribution logistics 4.0
 Digitalization.
 Software solutions.
 Machine support e.g. Cranes, ladders, VERTICALLY MOVABLE RACKS ON
CHAIN / Machine handling / Automation, Robotics e.g Amazon Bangalore

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At the Bremen Institute for Production and Logistics (BIBA), researchers have
investigated processes for the energy-efficient telematics operation of transported
goods (telematics refers to the combination of telecommunications and information
technology).
The result is a patented system that determines and records logistics.

Current trend topics in sales logistics are:

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Modern Environmental Trends : Glassgo Conference COP20
Environmental protection currently plays a particularly important role. Legislative
projects at national and European level are forcing companies to reduce Methane, CO2,
emissions and switch to more sustainable models.
Currently massive emissions, not least due to the rapidly growing e-commerce market.
According to estimates of the German Federal Environment Office, this amounts to
about 500 to 900 g per ton-km for an aircraft. The most environmentally friendly type of
distribution logistics is transport by ship. Only 5 to 30 g of CO2 are emitted per ton-km
(the term ton-km refers to the transport of one ton over a distance of one km).
Together with DB Schenker and other partners, the Institute for Electromobility at
the University of Bremen has developed concepts for e-transport vehicles to supply
heavily frequented inner-city areas. A similar logistics concept was also developed
within the framework of the “Zemi-Sec” project. The challenge was to ensure that
electric vehicles were sustainable, energy-efficient and quiet.

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Transport systems
The industry is facing increasing pressure in transport, skilled go-down workers,
executives : Skilled workers tend to avoid these jobs and numerous vacancies remain
unfilled. In a Survey of the German Logistics Association 90 % of the participating
companies stated that they felt the lack of suitable trainees. Logistics service providers
are particularly hard hit: 76 % of respondents in this sector say they find not enough
young and well-educated skilled workers.
Possible solutions to this problem are:
 Increase in wage levels
 Stricter regulation of working hours
 Improvement of the industry’s image
 Use of modern technologies to relieve the burden on employees
 Creation of equal entry opportunities for everyone (especially women, immigrants,
etc.)

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This article was first published byMM Logistik.
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