Actually, a clear definition of distribution management is not as easy to come up with as you might think— it’s often a matter of perspective. However, in general terms, distribution management encompasses the activity closest to the customer end of the supply chain. In most companies, distribution management covers some or all of the following activities:
- Operation of distribution centres, where finished (or sometimes part-finished) goods arrive from manufacturing plants or strategic storage facilities.
- Picking and packing customer orders for delivery
- Creating full truckloads from multiple customer orders
- Transporting customer orders from distribution centres to the customers’ premises
Some enterprises include their sales functions under the distribution management umbrella and in the case of a retail company selling products from many manufacturers, procurement and inbound logistics might also be managed by the distribution department.
Who is the Customer in Distribution Management?
In some distribution operations, the end customers are actually consumers. An example of such an organisation might be a manufacturer of personal computers that sells directly to consumers through an ecommerce platform.
In most cases though, customers of a distribution operation will be wholesale or retail companies. These companies may have their own storage facilities and even their own distribution networks to get finished goods shipped from their bulk storage facilities to their retail outlets.
With such diversity and ambiguity about what is and isn’t included in distribution management, it’s fair to ask “is there anything in supply chain which can’t be classified as distribution?”
The answer really depends upon the individual enterprise and how it decides to classify its various operations. Usually though, it’s safe to say that manufacturing and any activity upstream of that (raw materials purchasing, inbound transportation and storage of raw materials) would not fall under the auspices of distribution management.
Find Out More at the Supply Chain Leaders Academy
There’s a lot more to learn about distribution and its management as part of the supply chain big picture. Our Supply Chain Leaders Academy eClasses, numbers 1, 15 and 64 for example, all contain lots of useful information and tips about distribution. If you’re looking to accelerate your education in supply chain, logistics or distribution, take a look at the Supply Chain Leaders Academy website and find out more about the many benefits of membership.