Distribution Management is a process that encompasses the planning, organizing, directing, and controlling the efficient, effective, and economical flow and storage of goods from the point of origin to the point of consumption to meet customers’ needs. Many factors greatly impact distribution management, but here we will discuss only five factors.
Distribution management refers to the process of getting goods from the point of origin to the point of consumption efficiently and effectively. Each of these factors can either help or hinder distribution managers as they work to meet customer demand.
According to Taylor & Francis Group, The main trade-off influencing distribution structure selection is “service level” versus “logistics costs.”
In this article, we will discuss these five impactful factors in detail.
What is Distribution Management?
Distribution management (DM) is the process of planning, organizing, directing, and controlling the efficient, effective and economical flow and storage of goods from the point of origin to the point of consumption in order to meet customers’ needs.
The five factors that have a great impact on distribution management are geographical location, transportation methods, technological advances, government regulations, and market trends. Each of these factors can greatly affect how goods are distributed and how companies must adjust their distribution strategies to remain successful.
Successful distribution management utilizes:
- State-of-the-art information systems
- Logistics software
- Highly efficient equipment
- Forecasting tools
- Warehouse inventory management systems (WMS)
- Excellent safety and training programs
Why does Distribution Management Influence?
Distribution management is a complex process that is constantly being influenced by these five factors. Understanding and keeping up-to-date with these trends are essential for any company that wants to maintain a successful distribution network.
- Geographical location is important because it affects transportation methods. For example, a company that is located in a remote area will likely have to use more expensive transportation methods, such as air freight, to get its products to consumers. On the other hand, a company located in a major city can use less expensive means of transportation, such as road or rail transport.
- Technology has also had a huge impact on distribution management. For example, the development of computers and barcode scanners has made it possible for distributors to track inventory levels and shipments more accurately.
- Additionally, the internet has allowed companies to sell their products directly to consumers, bypassing traditional distribution channels.
- Government regulations can also have a big impact on distribution management. For example, changes in tax laws or import tariffs can cause companies to alter their distribution strategies. Similarly, changes in labor laws can affect how companies staff their warehouses and distribution centers.
- Finally, market trends must also be taken into account when managing a distribution network. For example, the rise of e-commerce has led to an increase in demand for home delivery services.
5 Top Factors Influencing Distribution Management
The distribution management process encompasses the planning, organizing, directing, and controlling of the efficient, effective and economical flow and storage of goods from the point of origin to the point of consumption to meet customers’ needs.
There are five factors that have a great impact on distribution management- these are geographical location, transportation methods, technological advances, government regulations, and market trends.
Geographical Location
The geographical location of a business will have a big impact on its distribution management process. Businesses located in remote areas will face different challenges to those based in more accessible locations.
For example, businesses in remote areas may have to factor in longer lead times for deliveries and may need to use alternative transportation methods such as air freight.
Transportation Methods
The transportation methods used by a business will also have an impact on its distribution management. Businesses need to consider the most efficient and cost-effective way to get their goods to their customers.
This may mean using a combination of different transportation methods such as road, rail, sea, or air.
Technological Advances
Technological advances have also had a big impact on distribution management. The use of computers and other technology has made it easier to track inventory levels, plan routes, and schedule deliveries. This has helped to improve the efficiency of the distribution process and has reduced the overall cost.
Government Regulations
Government regulations can also have an impact on distribution management. Businesses need to be aware of any changes in regulations that may affect their ability to distribute their goods. For example, new environmental regulations may impact the transportation methods that can be used.
Market Trends
Market trends can also influence distribution management. Businesses need to be aware of any changes in customer demand or preferences that may impact the way they distribute their goods. For example, if there is a trend for more people to buy online, businesses need to ensure that their goods are available to be delivered to this customer base.
Distribution management is a complex process that is influenced by a number of different factors. Businesses need to be aware of these factors in order to ensure that they are able to effectively manage their distribution.
Successful Distribution Management
Pulling all of the variables together, making informed decisions, and striving to improve performance each day is the key to distribution management success and customer satisfaction. Complacency has led to the demise of many logistics companies, while innovation has created today’s leaders.
Reliability, anticipation, responsiveness, safety, and high efficiency are the attributes of a genuinely successful distribution management company.
For example, businesses in remote areas may have to factor in longer lead times for deliveries and may need to use alternative transportation methods such as air freight.
Final Words
All in all, getting your distribution process right is a complex but necessary endeavor for any business that ships products. By taking into account the five factors we’ve discussed – product, warehouse, transportation, information systems and reverse logistics – you can develop a well-oiled machine that runs smoothly and meets customer expectations.
And if you need help with any aspect of online store or company store development and management, Brikl has a team of expert copywriters who would be happy to assist you. What other factors do you think are important when it comes to managing product distribution?