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A number of studies have shown that rational consumers will only go for products that give them the highest level of satisfaction. As a result, industries are striving to manufacture quality products that meet customer demand. Lately, marketing industry has experienced a lot of competition, mainly caused by the entry of many processing industries into the market. It is due to the above reasons that all aspects of supply must be maintained at a high level to facilitate gaining a share of the market.
Distribution centers forms the link between the manufacturers and the customers. This makes them a vital stage in supply process. According to Berry (Berry, 1997), a supply channel consists of three stages, such as the manufacturer, distributor and retailer. The manufacturer uses the raw materials stored at the storage warehouse to develop products required by the customers. Once the products are manufactured, they are moved to the distribution centre where they await transportation to the retailer. Products are released with respect to market demand. The operations that take place before the product reaches the retailer are complex as they involve a lot of logistics and analysis in order to ensure that the market of the product is maintained and profits realized. The end point of the supply channel is the retailer who sells products directly to the customer.
The process of distribution is centered on the flow of goods and services from the source to where they are required. In the past, distribution was only concerned with the movement of products after they had been manufactured. However, it has recently been expanded to cover almost all forms of material monitoring except for the stages of manufacturing and retailing (Gattorna, 1998). To improve efficiency of material handling, distribution operations are now employed, once materials are received at the storage warehouse. When managing the inflow of materials, a number of elements must be considered. Firstly, the inventory at the warehouse should be planned and controlled effectively to ensure the use of materials according to the budget. When the stock goes beyond a certain level, the right materials are ordered at the right time to always maintain the stock. Secondly, only the required amount should be purchased and at the lowest prevailing market price. Once materials are purchased, space for their storage should be created at the warehouse. There are many ways of creating space at the warehouse, such as vertical cube utilization, use of racks, etc. Another element is material handling; supervisors should monitor how the materials are used and give daily reports to the warehouse manager on the progress. Materials should be arranged in accordance to their necessity for the production process; those that are required frequently should be easily accessible.
On the other hand, management of the outbound flow involves a variety of elements; among them is manufacturing products according to the distributors order. This reduces the time a product stays at the Distribution Centre before sale. Once other products are manufactured, they are moved to the distribution centre before being released to the distributors. During the low season, the products tend to pile up at the warehouse unless proper arrangements for their storage are made before they are processed. This calls for factory and warehouse managers to always be in touch so as to control the rate of production whenever the need arises. Some industries outsource firms to assist in finished goods management. Such firms are shown their duties and paid on contract basis. Proper packaging of goods plays a major role in marketing the product (Thompson & Soper, 2007). The package should be appealing to the customer and ensure that the goods remain uncontaminated, especially if it is a food product. Another outward element is transportation of the product to the retailer; the transportation means should be efficient and less costly, and in case of perishable products, such as vegetables, fruits and flowers, they ought to be delivered always in time, or else losses are incurred.
Distribution focuses mainly on increasing time and place efficiency, and delivering products as per demand. This helps increase performance and reduce the rigorous process associated with distribution. Industries face the challenge of always ensuring that the product is available as per demand. If distribution strategies are effective, it becomes easier for the industries to keep up with the requirements. This is because products are transported, sold and revenue to purchase raw materials realized. The workers are paid in time, raw materials delivered also on time, and thus the factory is always running. But if there is a failure at the distribution stage, all the other activities, such as manufacturing and product delivery, start to lag behind. This lowers the functional performance of the factory and ultimately results in losses. When demand is high and products are available, the delivery is satisfactory. However, some challenges may arise; the number of producers will increase resulting to competition as they try to sell a common product to the same consumers. Also, the geographical distance between producers and consumers may expand, thus calling for the need of intermediaries to facilitate smooth and timely delivery of the products (Waters, 1999). Once the number of intermediaries between the producer and the consumer grows, the process of distribution becomes more complex. This will raise the price of the product resulting in market loss and consequently the company’s pulling out of the market.
Distribution management aims at reducing the complexity of the whole process through the use of sorting. Sorting involves a variety of activities where the distributor physically separates products with respect to market acceptability. Products are divided into quantities demanded by the market. Procedures and policies are put in place to ensure efficient transactions. The products are graded in accordance to quality; homogenous products are sold in bulks. A channel distributor works on acquiring products once they are manufactured, on acquiring these products; they are transported to the market place in bulk quantities to other small distributors or retailers who then sell them to consumers. Another strategy may involve the use of distribution channels to carry out the process of selling the product. By placing an emphasis on being marketing experts in their area, distribution firms usually have selling organizations and a wide range of knowledge of their customers and what they expect from the products. The producer uses the distributor to tap into these resources. Because of the large scale of the distributing firm's techniques and its professional skills in channel coordination, it can significantly improve the time, place, and possession elements by bringing products closer to the customers. These advantages mean that the producer can reach many small and far customers at a lower cost, thus allowing the producer to focus its expenses on product development and production process. More complex distribution planning became a necessity, and this led to creation of a distribution requirements planning (DRP) at the early1970s. DRP helps outbound logistic systems monitor, manage and minimize inbound raw-materials. DRP is used in line with material requirements planning (MRP) to help in scheduling delivery times. This helps in examining both inbound and outbound inventories.
One of my recommendations to the distribution sector is to incorporate information technology into their operations. Use of data entry programs enhances the accuracy of items bought and sold from the warehouse. In today’s world, technology is being increasingly used to ensure efficient performance in production and distribution of goods and services to customers. Another aspect includes marketing of these products to the consumers. Use of advertisements and promotions makes consumers aware of the products as well, as of the prevailing price. It also entices the consumers to buy the product. A product easily sells itself if it has been advertised at least once. This awareness makes the demand for the product go high and consequently leads to higher prices. Due to this, distributors are able to distribute products in bul, thus lowering the cost of transportation. Some products can be transported by using cost-effective means, such as trains, which lowers the cost of transportation. Another aspect is opening depots at different places; the goods are transported to the depots that are the closest to the consumer. Once the stock goes down at the retail shop, it becomes easier for the goods to be moved to this area, hence efficiency in delivery. Application of e-commerce which facilitates communication through mobile phones, ordering products through internet and mobile money transfer makes the transactions between customers and distributors more effective. Employing qualified personnel will facilitate professionalism in the sector; this saves time because the strategies put in place are effective and have been successfully employed elsewhere.
There are various ways that can be used to maximize the warehouse space. Lack of space may result from either having too much of the right inventory, or having a wrong merchandise, or using the available space poorly. A lot of the right product may seem satisfactory, but if not controlled, it may become cumbersome, as it takes up most of the space available. Using racks improves organization of the warehouse, and more goods can be put in place (International Association of Refrigerated Warehouses, 1999). On the other hand, a lot of wrong merchandise may be stored and remain unused over a long period of time, thus resulting in inefficient use of space. These materials should be moved to other temporary locations to create space for the right materials. Spaces available should be economically used through application of various methods, such as the use of racks. According to Powell (Powell 1996), good record-keeping of the goods within the warehouse helps keep track of the stock available. Companies such as Dell have used distribution strategies aimed at ensuring the goods are sold once manufactured to create room for other products. The use of internal and external intermediaries during the supply of the product makes the delivery efficient and ensures the product reaches as many consumers as possible (Mulcahy, 1994).
Distribution strategies enhance the delivery of products to the consumers. It forms the intermediary between production and consumption. It is vital to ensure that products reach the customers as per demand and on time. Application of up-to-date procedures, such as the use of computer software, also enhances service delivery. Use of multiple storage facilities for keeping of the products before transportation to the market ensures the product availability is maintained over the required time. Intermediaries make the flow of goods and services smoother, and they also get deep into the market to places where the major distributors cannot reach. The production industry should work closely with the distributor channel so as to identify products that are in high demand and should, therefore, be produced in sufficient quantities to meet the market requirement (NEVADA, 2011). As far as warehouses management is concerned, the use of raw materials should be monitored and proper records put in place to facilitate increased functional performance. Space should always be created to accommodate the inventory on high demand and such that takes a short time to produce. During the purchase of the merchandise, only the right amount should be bought at the lowest prevailing market price. This ensures that the warehouses are not overstocked, and expenses are reduced for maintaining the raw materials at the warehouse. If proper strategies and policies are put in place, the complexity of the distribution process is cut into a simple process that is easy to coordinate and is managed more effectively. This results in minimization of distribution costs and higher profits for the industies, thus keeping them in business. It also ensures that quality goods and services continue to be provided to the society. It is up to the industry sector to put in place the above recommendations so as to keep up with the competitive world of distribution and marketing, which will ultimately benefit both the producer and the consumer.