Physical Distribution, Meaning, Objectives, Components

Physical distribution is an important aspect of the marketing process. Its activities are focused on moving raw materials from suppliers to manufacturers and from manufacturers to end consumers or users. Marketing entities like merchants, dealers, and others majorly handle these distributions, playing a crucial role in maintaining product flow and physically delivering it to consumers' homes or stores.

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Physical Distribution Meaning

Steps of Physical Distribution

Key Features of Physical Distribution

• Inventory Management: Effective physical distribution involves managing inventory levels to meet customer demand without overstocking or understocking. This includes maintaining the right amount of products at the right locations to ensure timely delivery and cost-efficiency.
• Warehousing : Warehousing is a crucial component of physical distribution. It involves strategically storing goods to facilitate quicker and more cost-effective deliveries. Efficient warehousing includes proper organisation, storage conditions, and security measures.
• Transportation: Transportation is the movement of goods from one location to another. Choosing the most efficient and cost-effective transportation methods is essential to ensure timely delivery. Depending on the nature of the goods and delivery destinations, this can include a mix of road, rail, air, and sea transport.
• Order Processing: Order processing includes receiving orders, picking and packing products, and preparing them for shipment. Efficient order processing systems are vital for accurate and prompt delivery and for minimising delays and errors.
• Packaging : Proper packaging protects products during transit and storage, ensuring they reach customers in good condition. It also involves considerations of cost, sustainability, and customer experience.
• Customer Service : Customer service in physical distribution involves communication with customers about their orders, handling inquiries and complaints, and providing solutions to delivery issues. High-quality customer service enhances satisfaction and loyalty.

Hindrance in Physical Distribution

• Inadequate Infrastructure : Poor transportation infrastructure, such as roads, railways, and ports, can significantly delay the movement of goods. Shortage of warehousing facilities can also lead to inefficiencies and increased costs.
• High Transportation Costs: Rising fuel prices and logistical expenses can escalate transportation costs, making it challenging to maintain cost-effective distribution. Additionally, inefficient route planning and vehicle maintenance issues can increase costs.
• Regulatory and Legal Issues: Complex regulations, customs procedures, and trade barriers can slow distribution. Compliance with various legal requirements across different regions can also add to the administrative burden.
• Supply Chain Disruptions : Unpredictable events like natural disasters, strikes, and geopolitical tensions can disrupt the supply chain, causing delays and shortages. Dependency on single suppliers or limited transportation routes can exacerbate these issues.
• Inventory Management Challenges: Poor inventory management can lead to overstocking or stockouts, which hinder efficient distribution. Inaccurate demand forecasting and inadequate inventory tracking systems contribute to these problems.
• Technological Limitations : Lack of advanced technology and automation in warehousing, transportation, and order processing can lead to inefficiencies. Outdated systems and poor integration with supply chain partners can slow down operations.

Physical Distribution in E-commerce

• Supports Faster Shipping Times

• Reduces Physical Distribution Costs

• Improves Customer Satisfaction

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