Managing distribution processes in an enterprise – part 1

Managing distribution processes in an enterprise – part 2

Nowadays, selling a product is a more difficult art than producing it, which prompts companies to pay special attention to methods of distributing products to the customer. The concept of distribution derives from the Latin term distributio, meaning separation or division.

According to P. Cyplik, D. Głowacka-Fertsch, and M. Fertsch, distribution consists of “activities related to the movement of materials, usually products and components for service needs, from the producer to the consumer. These activities include transport, warehousing, inventory management, material handling, order processing, location analysis, packaging management, information processing, and communication necessary for the effective coordination of all activities.” According to the approach taken by L. Garbarski, I. Rutkowski, and W. Wrzosek, distribution “consists of bringing and offering the manufactured product to the consumer in accordance with their needs, i.e., in the appropriate form and at the right place and time.”

The essence of distribution is the transfer of products from their places of manufacture to the final recipients, at the place and time where they are expected by the buyers. It is a mistake to only produce and offer products at competitive prices. To achieve success, an enterprise must deliver products in the right way to a demanding market. From the point of view of market-oriented enterprise management, distribution creates opportunities for building a competitive advantage. The functions of distribution “arise from the need to eliminate discrepancies existing between supply and demand, as well as discrepancies in terms of type, quantity, and assortment of products, as well as differences regarding the time and place of their production, and in the final stage – consumption.”

Distribution in a logistical sense is an integrated structure of product flows and the accompanying information flows. Product flow includes all activities related to goods, raw materials, or finished products, as well as warehousing, transport, packaging, and order handling. The information sphere consists of order preparation, administrative processing, or initiating the flow of goods. All these elements can be included in the so-called distribution network. It has a spatial character and a specific order of territorial division regarding the location of producers and warehouses, as well as links to the appropriate transport infrastructure. The course of all product flows and related information streams is synonymous with distribution. (…)

Managing distribution processes in an enterprise, part 1 – PDF file for download