Distribution Management: The Four Stages Of Supply Chain Management

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Distribution management is an overarching terms that refers to numerous activities and processes such as packaging, inventories, warehousing, supply chain and logistic. This process is what has been known as distribution channel (Philip Kotler 2001). The sale of groceries in petrol and service stations is an example of how intensive distribution has grown (Bowersox eta’l 1986). Management of the supply chain focuses on incoming materials, but just as importantly. Distribution management also focuses on the outbound flow of product. Whether creating a network of warehouses or retail outlets, finding the optimal number of facilities represent a critical and often dynamic decision. Effectively managing the entire distribution process is critical…show more content…
Reducing an organisation’s supplier base is often a key aim of any procurement professional in a new role. It is always assumed that aggregation is right and less is more when it comes to the long tail of suppliers. Supplier selection considers numerous factors such as strategies fit, supplier competence, delivery and quality performance. There is four stage process of supplier selection: supplier evaluation, supplier development, negotiation and contracting. The first stage of supplier selection is supplier evaluation, which is involves finding potential supplier and determining the likelihood of becoming good suppliers. If a good supplier was chosen then all other supply effort are in good condition. Evaluation criteria critical to the firm might include these as well as production process capability, location and information…show more content…
Definition of logistic has been augmented to include services along with goods and information movement. In addition to conforming to customers’ requirements, others view the output of the logistic process as creating value for the ultimate customer and contributing to current and future profitability of the firm. Procurement activities in large part support a firm’s inbound logistics and are vital to value creation (Porter, 1985).The purpose of logistic management is to obtain efficiency of operation through the integration of all material, movement and storage activities. The efficiency of a supply chain can be assessed using the total logistics cost a financial measure. It is necessary to assess the financial impact of broad level strategies and practices that contribute to the flow of products in a supply chain. Since logistics cut across functional boundaries care must be taken to assess the impact of actions to influence costs in one area in terms of their impact on costs associated with other areas (Cavinato, 1992). For example, a change in capacity has a major effect on cost associated with inventory and order
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