Question

Role of distribution in supply chain

Answer 1

The role of distribution in the Supply Chain

Meindl (2010) defines Distribution as being "the steps taken to move and store a product from the supplier/manufacturing stage to a customer stage within the supply chain". He comments on how distribution occurs between every set of stages in the supply chain and how raw materials are moved from suppliers to manufacturers, whilst finished goods are moved from manufacturing to the end customer. Distribution is considered to be a key factor/driver of overall profitability of a company because not only does it affect supply chain costs but it also affects the end customer directly. (Meindl, 2010, p86)

Whilst Meindl describes distribution within the supply chain as the movement of the product from a to b, Christopher M (2003) discusses how the role of distribution has moved away from the conventional view of distribution as being "solely concerned with transport and warehousing". He suggests that the key to successful distribution today is the model of demand management. Demand management is regarded as "the process of anticipating and fulfilling orders against defined customer service goals". In order to optimize the process of demand management, it is essential that a firm has a well-integrated ICT (Information Communication Technology) system in place, as information is vital to its success. Information from the marketplace, from customers regarding usage/consumption, production schedules and inventory statuses are all accounted for

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