Introduction

Distribution is a critical element of any business operation. It involves the efficient movement
of goods from the manufacturer to the consumer, and it plays a vital role in ensuring customer
satisfaction and business success. However, distribution can be complex and challenging,
with a range of factors that can impact its effectiveness.
This guide explores the potential of unlocking your distribution network and optimizing your
supply chain. By leveraging the latest tools, technologies, and best practices, you can
streamline your operations, reduce costs, and improve your bottom line.

The main tasks facing distribution are as follows:

• Efficiently transporting goods from manufacturers to consumers
• Managing inventory levels to ensure sufficient supply while minimizing excess stock
• Coordinating logistics and shipping to reduce costs and improve delivery times
• Developing and maintaining strong relationships with suppliers and retailers
• Identifying and adapting to changes in consumer demand and market trends
• Implementing technology and systems to improve distribution efficiency and
• accuracy
• Monitoring and analyzing performance metrics to continuously improve the
• distribution process.

So let’s dive in and discover the key strategies for achieving distribution excellence.
The field of distribution has undergone significant changes and developments due to the
dynamic nature of the business world. As a service, distribution has evolved to meet the
needs and demands of modern consumers and businesses. These changes have resulted in the
emergence of various distribution types and strategies to optimize the supply chain and
improve customer satisfaction, listed below:

1. Direct distribution: Selling directly to the end consumer, without the involvement of
   intermediaries.
2. Indirect distribution: Using intermediaries to sell products, such as wholesalers or
   retailers.
3. Intensive distribution: Placing products in as many outlets as possible to maximize
   availability and convenience for customers.
4. Selective distribution: Limiting the number of outlets that sell a product to maintain
   quality and exclusivity.
5. Exclusive distribution: Restricting the distribution of a product to a single outlet or a
   limited number of outlets, often to maintain premium pricing or brand image.

Distribution services are provided by many companies, there are almost no monopolies in this
market, and high competition means that every customer is important. To understand how to
choose the right distribution company, it is recommended to focus on a number of criteria:

• Industry experience and reputation: Choose a provider that has a demonstrated history of success in your industry or a related field.
• Geographic coverage: Evaluate whether the service has the necessary coverage to
• distribute your products to all the locations you need.
• Capacity and flexibility: Evaluate the company’s ability to handle your volume of products and adjust to changes in demand or distribution needs.
• Technology and systems: Look for those who use modern technology and logistics systems to streamline processes and provide real-time tracking and reporting.
• Cost-effectiveness: Compare pricing and fees among different companies to ensure you are getting competitive rates for the services provided.
• Customer service: Consider the level of customer support and communication provided by the company, as well as their ability to handle any issues or concerns that may arise during the distribution process.

Distribution offers several advantages to businesses, including the ability to reach a wider
audience and increase market share. By partnering with a distribution company, businesses
can leverage the company’s expertise, infrastructure, and network to efficiently and
effectively get their products to customers. This can result in improved customer satisfaction,
as well as reduced costs and risks associated with managing distribution in-house.
Additionally, distribution can help businesses stay competitive by enabling them to respond
quickly to changing market demands and customer needs.

How the distribution system works:

The distribution system involves all the activities necessary to move products from their point
of origin to the end consumer, which includes manufacturers, wholesalers, retailers, and other
intermediaries. This process involves a series of steps, including warehousing, transportation,
and inventory management.
The first link in the distribution system is warehousing, which refers to the storage of goods
before they are shipped to their final destination. It serves as an intermediary point between
the manufacturer and the customer, and they provide a place to store goods before they are
transported. A well-managed warehouse can ensure that products are in good condition and
ready to be shipped when needed.
Inventory management is also a crucial aspect of the distribution system. It involves
monitoring the quantity of goods in the warehouse and ensuring that the correct products are
available for shipment when needed. Effective inventory management can help reduce costs
and prevent overstocking or understocking of goods.
In addition to these core components, the distribution system also involves the use of
technology and software to track and manage products throughout the supply chain. This
includes tools for tracking inventory levels, monitoring shipments, and managing logistics.
By leveraging these technologies, companies can improve the efficiency and accuracy of their
distribution processes, reducing costs and improving customer satisfaction.

Introduction

What is the first thing that comes to mind when you hear the word “logistics”? The word “logistics” is known from the Roman Empire, where employees involved in distributing food were called “logisticians” or “logistics”. Logistics was developed through the development of military affairs. But, nowadays logistics is primarily a management model for optimizing all processes of movement of goods, services, and resources, which contributes to the development of B2B and B2C business.
Logistics contributes to an enterprise to develop efficiently by choosing the right logistics strategy, creating an effective logistics system, rationally organizing the logistics process at the enterprise and solving problems of cross-functional and inter-organizational coordination and integration.

The main tasks facing logistics are as follows:

• selection of transport;
• selection of optimal routes;
• labeling and numbering of goods;
• packaging and storing of goods;
• organizing the optimal and accessible location of goods in warehouses;
• formation of general and combined orders.

Recently, the development of logistics has reached the point where it has been divided into
types. Taking all of the factors and conditions of service provision into account, the main
logistics types are below:

• procurement
• distribution
• warehousing
• transportation
• information
• production
• customs
• complex

The organization of logistics activities for any enterprise can be carried out in accordance with
one of the four main strategies for the development of logistics services.

1. An enterprise or business independently establishes a logistics department whose
   functions are to carry out all logistics processes from the purchase of the raw
   materials to the sale of products.
2. Outsourcing some of the logistics functions to third-party companies, such as
   warehousing or transportation that are difficult to implement on their own.
3. Outsourcing of all logistics functions, including raw material supply management and
   product shipment.
4. Close cooperation with a logistics provider who not only provides delivery, shipment
   and coordination, but also promotes the product in the retail network.
   It doesn’t matter in which area a business is developing, what size it is, or where it is located.
   It’s the logistics connections and services that make it complete and competitive.
   Logistics services are provided by many companies, there are almost no monopolies in this
   market, and high competition means that every customer is important. To understand how to
   choose the right logistics company, it is recommended to focus on a number of criteria:

• Vehicle fleet. Possibility to get complete information about the fleet owned by the
• logistics company; the ability to choose the type of transportation that is convenient
• for the client; understanding who owns it; and the ability to meet special
• transportation needs through cooperation with available fleets makes the company
• able to fulfill its obligations.
• Clear guarantees of compliance with transportation deadlines and cargo safety in
• transit. Carrier liability insurance is equally important. The company should have
• clear, well-developed transportation schemes, a well-coordinated team, and options
• for solving even the most complex cargo transportation options.
• Providing a wide range of services and an integrated approach. The logistics company
• assumes full responsibility for your goods at all stages of cooperation: selection of
• transport, route, transportation, storage. Also pay attention to willingness to work with
• non-standard orders, discussing the terms of the contract, which includes all the
• conditions, actions and responsibilities of the parties in emergency situations.
• Value for money. The availability of open cases, feedback from previous customers,
• and a transparent calculation of the cost of services are key factors in
• decision-making.

What Are Logistics Services?

• Planning, implementing, and managing actions for the most efficient and effective
• storage and transportation of goods as possible
• Services and solutions of packaging
• Containerization
• Documentation and documentary support
• Insurance
• Storage
• Importing and exporting regulations
• Freight damage claims
• Managing vendors and partnership
• Risk mitigation