What is distribution management?
Distribution management refers to the process of overseeing the transfer of goods from suppliers or manufacturers to the point of sale. It is an all-encompassing term that refers to numerous activities and processes such as packaging, inventory, warehousing, supply chain and logistics.
Distribution management is an important part of the business cycle for distributors and wholesalers. Businesses’ profit margins depend on how quickly they can turn goods around. The more they sell, the more they make, which means a better future for the business. Having a successful distribution management system is also important for a business to remain competitive and keep customers happy.
- Distribution management manages a company’s supply chain, from suppliers and suppliers to manufacturers to point of sale, including packaging, inventory, warehousing and logistics.
- Adopting a distribution management strategy is important to a company’s financial success and longevity of the business.
- Distribution management helps keep things organized and customers happy.
Learn about distribution management
Distribution management is critical to a company’s ability to successfully attract customers and operate profitably. Its successful execution requires effective management of the entire distribution process. The larger the company, or the greater the number of supply points a company has, the more it will be necessary to rely on automation to efficiently manage the distribution process.
Modern distribution management involves more than moving products from point A to point B. It also involves gathering and sharing relevant information that can be used to identify key opportunities for market growth and competitiveness. Most progressive companies now use their distribution power to gain market intelligence, which is critical to assessing their competitive position.
There are basically two distribution methods: commercial distribution (commonly known as sales distribution) and logistics distribution (commonly known as logistics). Distribution involves functions such as customer service, transportation, warehousing, inventory control, private truck fleet operations, packaging, receiving, material handling, as well as plant, warehouse, store location planning and information integration.
The goal is to deliver raw materials and parts (both partially and fully finished) to the right place and time under the right conditions for ultimate efficiency. Logistics planning should be aligned with the overall channel strategy.
Advantages of a distribution management strategy
Aside from maintaining profit growth, there are many reasons why a company might want to use a distribution management strategy. First, it keeps things organized. Without a proper management system, retailers will be forced to hold inventory at their own locations – a bad idea, especially if sellers lack proper storage space.
Distribution management systems also make things easier for consumers. It allows them to visit one location for a variety of different products. If the system didn’t exist, consumers would have to visit multiple locations to get what they need.
Having a proper distribution management system in place can also mitigate any potential delivery errors, as well as the time required to deliver the product.
Businesses can adopt distribution management strategies through electronic platforms, which help to streamline processes and boost product sales.
Distribution Management as a Marketing Function
The basic idea of distribution management as a marketing function is that distribution management takes place in an ecosystem that also involves the following considerations:
- product: Products are not always tangible objects, but can also refer to ideas, music or information.
- Price: This refers to the value of a good or service to buyers and sellers, and it may involve tangible and intangible factors such as list prices, discounts, financing, and the possible reactions of customers and competitors.
- promotion: This is any method of communication used by the seller to inform, persuade and/or alert buyers and potential buyers about the seller’s goods, services, image, ideas and their impact on society.
- place: This refers to the process of ensuring the availability, accessibility, and visibility of a product to end consumers or business users in the target channel, or customers they prefer to buy.
Effective distribution management involves selling your products while ensuring adequate inventory in channels, while managing promotions in those channels and their varying requirements. It also involves ensuring that the supply chain is efficient enough to keep distribution costs low enough to sell products at the right price to support your marketing strategy and maximize profits.