STUDENTS’ CORNER - 100
Customer service is another major objective of the logistics and we
have already dealt with the subject in detail in our earlier sessions. The crux of the matter is there is no
business without a customer and with the necessity to retain the customer; the
company must pull out all the stops to satisfy the customer. The needs of the customer must be understood
and fulfilled competitively and consistently too.
We will move on to the next objective of the logistics: Reduction in distribution cost.
Competitively cost effective distribution of products without
compromising quality remains the top most concern of any running business.
Physical distribution of the products aims at sending the products in such a
way that they reach the customer in right time, in right quantity and in right
shape. It means the physical distribution of the products, to be effective,
must deal with transportation, warehousing, inventory maintenance and so
on. At every area of operation, the cost
must be taken into consideration and those ways must be adopted that costs less
to the company.
Physical distribution of late has gained much significance since the
physical distribution costs come to about 20 percent of the country’s gross
national product (GNP). Let us, therefore, look into physical distribution a
Physical distribution is a significant part of a larger process called
‘distribution’ without which no business can survive. Products reach the end-users through many
intermediaries like wholesalers, agents, brokers, retailers. There are other important facts like
warehousing, inventory control, material handling, protective efficient
packaging, transportation, so on. Every
product has to pass through all these phases in time without damage.
Each part of the distribution channel costs and therefore today, all
businesses are concerned with cost-cutting exercise at every level of the
distribution. Traditionally, companies used to focus on production cost
primarily and now the efforts are extended comprehensively to all the
activities involved in the distribution channel.
We will spend some
more time, not much, with this subject before we move on to the next objective
of the logistics.