Page 5 - Lesson Note 5

Once goods are manufactured, packaged, branded, priced, and promoted, these

must be made available to customers at the right place, in right quantity and at

the right time.

Components of Physical Distribution

The main components of physical distribution are explained as follows:

1. Order Processing:

In a typical buyer-seller relationship order placement is the first step.

Products flow from manufacturers to customers via channel members while

orders flow in the reverse direction, from customers to the manufacturers.

A good physical distribution system should provide for an accurate and

speedy processing of orders, in the absence of which goods would reach

the customers late or in wrong quantity or specifications. This would result

in customer dissatisfaction, with the danger of loss of business and

goodwill.

2. Transportation:

Transportation is the means of carrying goods and raw materials from the

point of production to the point of sale.

It is one of the major elements in the physical distribution of goods. It is

important because unless the goods are physically made available, the sale

cannot be completed.

3. Warehousing:

Warehousing refers to the act of storing and assorting products in order to

create time utility in them. The basic purpose of warehousing activities is to

arrange.