The term distribution logistics, also in some instances referred to a logistics distribution or sales logistics, refers to the planning, realization, and control of goods and their movement from one area to another.
As an inter-organizational system, distribution logistics aims to increase efficiency between the suppliers to the intended customers. Bu increasing efficiency in costs and overall logistic performance, distribution logistics has remained instrumental in large-scale logistic enterprises as it ensures timely and efficient movement of goods over a global network.
As the nature of globalization changes, and traded goods increase in complexity, distribution logistics has grown to include storage, handling, and the overall transportation of goods from production to the eventual customer.
The combined processes involved in getting the company’s products across various channels to the eventual consumer can be a complex enterprise and this is why distribution logistics is divided into strategic, tactical, and operational tasks:
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Strategic Control
For proper optimization, strategic tasks within distribution logistics often include planning marketing strategies. Essentially, marketing strategies influence the flow and volume of goods across different markets. It also involves the development of a distribution network as well as the optimal choice of location to factor horizontal and vertical networking.
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Tactical Control
Sparse logistical and infrastructural resources mean that everything has to be approached from a tactical perspective. Tactics enable companies to develop ‘war-like strategies to ensure efficiency and operational quality above their competition.
The following tactical strategies are instrumental in enabling a company to adequately address market risks: fleet management, establishing a minimum purchase quantity across all distribution networks, determining service level quality, and finally, determining whether to outsource transport and logistical systems or conduct everything in house.
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Operational Control
The main task of distribution logistics is to ensure the operational processes are streamlined and work seamlessly with another network to ensure timely movement and distribution of goods. Logistics management is a complex process involving order processing, route planning, return logistics, and customer service. Innovations like the electric pallet jack have simplified these tasks, making for a more efficient supply chain. Overall, it is about ensuring the customer receives the goods as intended.
Objectives of Distribution Logistics
Distribution logistics operates under the following guiding principle, that, “the right objects must be available to customers in the right quantity at the right time with the right information at the right cost in the right place with the right quality.” With this in mind, it is clear that distribution logistics intends to optimize certain logistical processes to increase overall efficiency. It does this by focusing on three specific goals, namely:
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Availability
Once the demand for goods is certain then their availability must always be ensured. The role of distribution logistics is to ensure that goods are available as and when required due to demand. Customers should be able to receive goods in a reasonable quantity as and when they need them.
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Cost Minimization
Shipping and delivery costs highly influence the cost of the eventual goods, and therefore efficient logistics aim to streamline delivery systems to make them energy-efficient, faster, and environmentally friendly. The overall aim is to ensure that goods arrive in the highest intended quality at the right cost to the consumer and the producer.
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Influence
Businesses operate in a competitive environment, and in most instances, one company outperforms all others purely due to the efficiency of its distribution and logistical processes. The reliability of a company relies on how fast it can deliver its goods to the shelves, and whether these goods arrive in the best-intended condition.
Effects of Digitalization on Distribution Logistics
Distribution systems require highly advanced communication and logistical technologies. The increasingly sophisticated system used by distribution logistics companies is at the top cadres of industry use. Technologies such as RFID chips, Geo-tagging systems, sensor and positioning systems, robotics, cloud computing, artificial intelligence, and augmented reality, have increasingly added to efficient systems used in logistics.
The use of artificial intelligence has allowed logistics companies to plan efficient routes that human intelligence cannot adequately see. Technology enables faster and efficient data analysis which in turn allows systems to predict the efficiency of routes and calculate the most cost-effective measures to ensure efficiency across the board.
Augmented reality especially in warehouses provides operational efficiency by improving the movement of inventory within warehouses, thereby increasing competency and quality of work.
The future of Distribution Logistics
In the past, companies focused on increasing profit margins, which drove many towards accelerated growth without focusing on sustainability. Forward-thinking companies have redirected efforts towards ensuring sustainability across all their operational processes.
Technology further contributes towards improving environmental parameters within warehouses, and also during the transportation process. A common misconception is that sustainability measures increase costs. This may have been true in the past but with advancements in green energy, companies are realizing immense profits by pivoting away from energy waste and fossil fuels.
Several companies are already developing self-driving trucks and drones to accelerate their logistical processes. Self-driving trucks promise to increase efficiency by automating delivery processes, which would otherwise remain vulnerable to human error and delays.
However, without supporting technologies such as 4G and 5G, advanced mapping and GP systems, advanced sensors, and complex computational capacities, technologies such as self-driving vehicles and augmented reality would be impossible to realize. As the world moves towards further integration, distributed logistics stands as one of the areas that will benefit immensely from optimized automation and higher efficiency.
Overall, distributed logistics is the future of logistical systems since it has grown to include some of the most progressive systems. It responds effectively to global and domestic trade, by using the competencies in localized logistics and transportation, but over a larger scale.
Distributed logistics responds positively to concerns on environmental sustainability, labor efficiency and prioritizes the quality of logistical processes. Therefore, distributed logistics provides the best framework from which other logistical systems can easily operate.
As companies seek further avenues to increase efficiency and accelerate their growth, distributed logistics emerge as a one-stop solution to external and internal measures for quality management. Customers require such reliable services, which further translate into positive customer service.
