Physical Distribution Management and Strategy
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Transcript of Physical Distribution Management and Strategy
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Physical Distribution Management and
Strategy
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Physical Distribution• The process of
– planning, implementing, and controlling– the efficient, effective flow and storage– of goods, services, and related information– from point of origin to point of consumption– for the purpose of conforming to customer's
requirements. • Physical distribution cost can represent 20%
or more of the selling price of a product.
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Logistics Management• The efficient management of the flow of
materials inbound-through and outbound of an organization.
• Two primary product flows:– Physical supply (materials management):
Flows that provide raw materials, components, and supplies to the production process.
– Physical distribution management: Flows that deliver the completed product to customers and channel intermediaries.
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Supplier
Manufacturer Customer
Materials manageme
nt
Physical distribution
management
Logistics Management
InboundLogistics
OutboundLogistics
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Study Area Map
Supply chain management (a series of connected logistics flows)
Logistics management
Materials management Physical distribution
Incoming transportation Traffic managementReceiving ShippingPurchasing Customer serviceIncoming warehousing Finished goodsInventory control
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Functions of Traffic Management
• Mode and carrier selection• Routing• Claims processing• Operation of private transportation
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Many of the imported goods you purchase were shipped in 20-foot (TEU) or 40-foot (FEU) steel
containers
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Large cranes load the containers onto ships.
(Image courtesy of the Port of Charleston))
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Larger container ships can hold 4,000 to 6,000 containers.
(Image courtesy of Maersk Sealand)
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After unloading from ships, containers can be loaded onto a flatbed rail car, or truck flatbed,
for additional intermodal shipping. (Image courtesy of CSX Corp.)
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Alternatively, a container can be attached to a set of wheels for motor transport
(as an 18-wheeler trailer).
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Major Advantages by Transportation Mode• Motor
– Speed of delivery
– Diversity of equipment
– Flexibility– Frequency of
movement– Transfer of
goods to other carriers
– Convenient to both shipper and receiver
• Rail– Mass movement of
goods– Low unit cost of
movement– Dependability– Long-haul moving– Wide coverage to
major markets and suppliers
– Many auxillary services (i.e., switching)
– Transfer of goods to other carriers
– Specialized equipment
• Water– Very low unit
cost of movement
– Movement of low-unit-value commodities
– Long-haul movement
– Mass movement of bulk commodities
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• Pipeline– Lowest unit cost
of movement– Mass movement
of liquid or gas products
– Long-haul moving
– Large capacity– Most
dependable mode
• Air– Frequent
service to major markets
– Large capability– Overnight
service– Most rapid
speed of any carrier
• Intermodal– Cost savings– Lower loss and
damage claims due to containerization
– Service extended to more shippers and receivers
– Reduced handling and storage costs
Major Advantages by Transportation Mode
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Controllable Elements in a Logistics System
• Customer service• Logistics communications• Warehousing• Packaging• Production planning• Order processing• Transportation• Inventory control• Materials Handling• Plant and warehouse location
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