Descripción: Sales, Distribution and Supply Chain Management
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Supply chain management
Submitted To: arsalan najmi
Topic: The role of distribution center in supply chain management
Submitted BY: Ghazal Shaq Id: !!"#$" ##%&#
'ba(') *ate: +nd july,!#$
ACKNOWLEDGEMENT:
I express my deep sense of gratitude and sincere thanks to all who motivated me in various ways in the preparation of this assignment. It is honored to convey my heartfelt thanks to Sir Arsalan Najmi for having introduced this topic in the syllabus which helped to acquire wide experience and knowledge and for having encouraged me to complete this assignment successfully.
Table Of Content
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Topic
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Supply chain management & process
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he role of distribution center in supply chain management
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"arehousing #istribution
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Impact of improper warehousing and distribution center
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#istribution centers in supply chain management
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(ey functions of distribution centers
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*actors influencing distribution center
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,onclusion
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The -ole .f *istribution center in supply chain management
Supply Chain Management -anagement of the flow of goods or services between entities in the chain to realie delivery of end products or services/ satisfying customers at minimum cost.
Supply chain process
The Role Of Distriution center in supply chain management
0lthough warehouses and distribution centers appears to be interchangeable terms/ they do have different characteristics. 0 warehouse is a commercial building where goods are stored for some period of time/ while the distribution centers trends to store for goods for short time as per requirement of orders fulfilment i.e on daily basis or weekly or monthly basis. If only a distribution center is used in supply chain/ the production units would need to constantly produce orders to replenish a distribution center servicing retail stores. onger and globally oriented supply chain have often required usage of warehouses where the output of production units can be stored. Such
warehouses can be used to replenish the orders of distribution centers that can be quite distant example long distance container shipping3.
!arehousing 0 warehouse is a large/ spacious and secured building intend for commerce and government use. It functions as a storage place for large quantities of goods. here are three types of warehouses i.e public/ companyowned and owned by third party logistic !43. he government uses public warehouses to store temporarily. he business sector usually restores to companyowned or !4. "arehousing may also cover the completion of goods before distribution. he components and packing materials are 5ust delivered to the building. he assembly and packing of goods will be done in warehouse. he product cover will still look new and enticing upon delivery to distribution centers.
Distriution #istribution refers to the delivery of finished goods to buying centers like retail stores/ markets and super marts. Some manufacturers deliver their goods directly to their accredited retailers. his is advantageous when retailer6s business establishment are 5ust nearby the manufacturer6s place. #irect delivery of goods to retailers can save you from warehousing costs. 7owever/ if you are far from distribution centers/ you have to deal with the logistic cost and inventory frequently. hus/ it is safe to say that warehousing and distribution go handinhand in providing a more cost effective way of delivering goods. Some warehouses are also utilied as a buying or retailing center while maintaining its original function.
"mpact of improper arehousing an$ $istriution -a5or and minor mistakes alike in warehousing and distribution can result high losses. Incorrect storage can damage the goods. If the damaged goods are sold/ they will either be sold in a much lower price or not be sold at all. he manufacturers will not be able to
get back their investments. *ailures to deliver the goods to the right destinations will cause the business to cover another round of delivery costs to do two things8 to bring back the wrong goods and to deliver the right ones. #ue to delay/ goods can get damaged and intended recipients may not want to accept and pay for the delivery. 0nother adverse effect of wrong warehousing and distribution is that it can destabilie the prices of goods. If there is not enough supply due to the incompetence of the warehousing management/ the prices of goods may raise to meet the unchanged demand of the consumers.
Distriution centers in supply chain management
#istribution refers to the step taken to move and store product from the supplier to the end customer in the supply chain. #istribution is the key driver of overall profitability of a firm as it impacts directly both the supply chain cost and the customer experience. 9oods distribution can be used to ob5ectives that ranges from low cost to high responsiveness. #istribution centers add little or no value for product brought in bulk amount with little or no time sensitivity associates with their use. 4roduct insensitive to transportation costs also typically move directly to customers. Similarly for other product distribution centers provide value added role making supply chain more effective and efficient.
#istribution centers add efficiency by consolidating product for shipment to customers/ reducing transportation costs and performing value addition to service e.g. branding/ labeling/ assembling/ packaging/ etc3. #istribution centers also make the supply chain more effective. he strategic placement of distribution centers allows the positioning of products and services close to ma5or markets and customers. :ptimiation strategies are utilied to position product availability and delivery as a competitive advantage while also optimiing the cost tradeoff associates with transportation/ facilities/ equipment workforce and other critical cost variables. #istribution centers also facilitate the time utility by storing until it is demanded. 4roduct type often determines the need for and specific role of distribution centers in the supply chain. ,haracteristics to be considered includes8 • • • • • • •
Seasonality in either production and consumption. #emand variability -anufacturing economics -arketing and promotion initiatives ransportation economics Service requirements ,ustomiability and variants of products
4roducts that have extremely high services requirements from a time perspective present unique challenges since they often effect the efficiency/ performance and cost of customers operations. 4ostponement is also becoming a critical issue and value added service for distribution centers when demand is unpredictable it often makes sense to assemble and ship to order. Inventories remain generic providing more flexibility and reducing costs. 4ostponement is particularly effective in supporting customer product configuration and branding requirements. ,ompany capabilities to determine distribution center requirements are essential for achieving successful networks and operations. #istribution center requirement includes location/ design and operations/ determining the information and technology requirement/ and measuring performance. •
%ocation& #istribution center location is determined based on location of market and customer/ location of supplier/ volume of product/ transportation rates and the product characteristics/ ocal conditions includes cost of labor/ land and building/ I infrastructure/ transportation structure and government policies.
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Design an$ operation& he product/ how it is received/ the nature of customer orders/ service levels and transportation mode are the primary determinants of distribution center design and operation. 4roduct characteristics include weight/ packaging/ shelf life/ temperature/ etc. 7ow the product is received is critical to both inbound operation efficiency and space utiliation. "nformation an$ technology& Information is the critical driver for successful distribution center operations. Shortterm forecast provide information to determine labor and space requirements over short term planning horion. ong term forecasts are used for capacity planning distribution center sie/ workforce and equipment requirements3. Information technology is critical in achieving distribution center performance. "arehouse management system directs where products should be store and provide the necessary functionality for the completion and optimiation of receiving/ storing and shipment operations/ additional functionality may permits use of hand held devices/ bar coding to optimie efficiency and reduce errors. Measuring performance& #istribution centers primary ob5ective is to provide right product/ at the right place/ in right time and damage free. #istribution center most common performance measure includes handling productivity/ space utiliation/ accuracy/ damage/ service/ cost and inventory. 7andling productivity measured in units or lines picked per hour. Space utiliation is evaluated based on total space available storage. 0ccuracy includes measure of location and record accuracy/ percentage of item pick correctly and percentage order pick correctly. #amage measure includes percentage item picked undamaged when receive by customer and percentage of order picked undamaged merchandise. Service measures includes fill rate which is based on number order that were filled completely.
'ey (unction Of Distriution centers •
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A $istriution center offers )alue*a$$e$ ser)ices 8 0 well organied and managed distribution center will provide services like transportation/ cross docking/ orderfulfilment/ labeling and packaging along with services are necessary to complete the order cycle including order processing/ order preparation/ shipping/ receiving/ transportation/ returned goods processing and performance measurement. A $istriution center is customer focuse$ 8 #istribution center mission is to provide outstanding services to its customers. A $istriution center is technology*$ri)en 8 distribution centers of today must have in place state of art order processing/ transportation management. A $istriution center is relationship*centric 8 #istribution center must remain focused on its customer requirements. #istribution center link between supplier and customer/ and its management not only fulfil the customer need efficiently and costeffective methods of meeting those needs.
(actors "nfluencing Distriution Center 4erformance of distribution network should evaluated in two dimension
-eet customer needs ,ost meeting customer needs ,ustomer needs that met influence company6s revenue/ which along with decided cost the profit of delivery network. ,ustomer service consist of many components. Some of them are influenced by structure of distribution network/ these includes8
;esponse time i.e time between customer places order and receives delivery3 4roduct variety i.e number of different products that customer desires from distribution network3 4roduct availability i.e availability of products in stock when a customer order arrives3 ,ustomer experience i.e the ease with which customer places and receives their order3 :rder visibility i.e ability of customer to track their order from placement to delivery3 ;eturn ability i.e customer can return unsatisfactory goods and ability of distribution channel to handle such return3
Conclusion #istribution centers add value to the supply chain management between a supplier stage and customer stage. Improvement in supply chain performance due to some reasons8
;eduction in inbound transportation cost. ;eduction in outbound transportation cost because distribution center combines products from many suppliers in to single outbound shipment. Somehow it allows to lower cost by planning production more effectively.
