Below is a complete, exam-oriented, detailed answer on Logistics of Distribution with definitions, elements, objectives, features, advantages, disadvantages, and examples.
You can directly use this for BBA/MBA/CA/Commerce notes.
---
LOGISTICS OF DISTRIBUTION – COMPLETE NOTES
1. What Do You Understand by Logistics of Distribution?
Logistics of Distribution refers to the planning, implementing, and controlling the physical movement of goods from the producer to the final consumer.
It ensures that the right product reaches the right customer, at the right time, in the right quantity, and at the lowest possible cost.
It involves:
Transportation
Warehousing
Inventory management
Order processing
Packaging
Material handling
Distribution planning
Simple Meaning:
“Distribution logistics is the management of the physical flow of goods from the point of origin to the point of consumption.”
---
2. Elements of Distribution Logistics / Components of Logistics System
These are the core building blocks of a logistics system:
---
1. Transportation
Movement of goods through road, rail, air, sea, or pipelines.
Example: FMCG companies like Hindustan Unilever use trucks for retail distribution.
---
2. Warehousing
Storage of goods to balance demand and supply.
Types: public warehouses, private warehouses, cold storage.
---
3. Inventory Management
Ensuring optimum stock levels:
Not too much (costly)
Not too little (stock-out)
Methods: EOQ, ABC analysis, JIT.
---
4. Order Processing
The system of receiving, verifying, billing, dispatching orders from customers.
Fast order processing leads to higher customer satisfaction.
---
5. Material Handling
Movement of products inside warehouses using equipment like forklifts, conveyors, hand trucks.
---
6. Packaging
Protection + branding + easy movement.
Good packaging reduces breakage and improves product image.
---
7. Demand Forecasting
Predicting future demand to avoid shortage or excess stock.
---
8. Distribution Planning
Choosing distribution routes, number of warehouses, transport mode, load planning etc.
---
9. Customer Service
Ensuring delivery reliability, quick replacement, and after-sales support.
---
3. Objectives of Logistics
1. Right product at the right place
2. Minimum distribution cost
3. Quick and timely delivery
4. High customer satisfaction
5. Reliable and flexible supply chain
6. Effective use of transportation and warehousing
7. Reduced damages, wastage and stock-outs
8. Smooth flow of information and goods
9. Better inventory control
10. Competitive advantage through efficient distribution
---
4. Importance of Logistics (Why Logistics is Important?)
1. Ensures Customer Satisfaction
Quick delivery → happy customers.
2. Reduces Cost
Optimized transportation and storage lowers total supply chain cost.
3. Improves Market Reach
Efficient logistics allows companies to expand across cities & countries.
4. Supports Marketing Activities
Promotion is useless if product doesn’t reach customers on time.
5. Reduces Inventory Risk
Proper logistics reduces overstocking and understocking.
6. Improves Competitiveness
Companies like Amazon, D-Mart, Flipkart use world-class logistics for dominance.
7. Ensures Business Continuity
Stable logistics = stable operations even in uncertain conditions.
---
5. Characteristics / Features of Distribution Logistics
1. Customer-oriented – focuses on consumer satisfaction.
2. Time utility creation – ensures timely availability of goods.
3. Place utility creation – moves goods to areas of demand.
4. Cost-focused – aims to minimize distribution costs.
5. Information-driven – requires data on demand, stock, routes.
