Distribution management is a component of the supply chain process that delivers goods to end-users or consumers. It performs essential roles in availing finished goods at the right time and in the right place to consumers. Distribution of goods from the manufacturers to consumers is necessary because it promotes trading activities in an economy. Distribution management is an essential process in supply chain management because it facilitates the movement of goods from wholesale or retailers to end-users to promote trading activities.
Understanding Distribution Management
Distribution management is an essential process in an organization because it increases managers' ability to improve profitability by successfully delivering goods ordered by customers at the time. Distribution managers are charged with answering three fundamental questions that are crucial in effective distribution management. The first question is that when the goods will be delivered to customers, secondly, where the goods are delivered, and finally, how much quantity should be delivered to the consumer ( Franceschetti et al., 2017) . For the distribution process to be successful, distribution managers must effectively address the three questions. A modern distribution management system involves more than transporting products ordered by customers from location X to location Y. It also comprises collecting relevant and useful information that can improve the competitive advantage of a company in the market. Currently, many competing companies utilize distribution forces to obtain market intelligence to become more competitive in the market.
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Distribution Channels
Different distribution channels are used to transport finished goods to final consumers. The distribution channel depends on factors like the nature of the product and the distance between the manufacturer and consumers. For example, perishable goods require special handling, thus should be transported directly from the producers to consumers. When the distance between producers and consumers is small, consumers may opt to buy products directly from manufacturers to reduce additional costs charged by intermediaries. Below are the typical distribution channels used in distribution management.
Wholesale Distribution Channels
Wholesale distribution channel is a business to a business channel that involves delivering goods from raw material suppliers to wholesalers who sell finished goods to retailers or directly to end-users ( Franceschetti et al., 2017) . For example, oil distributing companies must take crude oil to oil refining companies before distributing it to wholesalers.
Retail Distribution Channels
A retail distribution channel involves delivering finished goods from wholesalers to retailers who distribute them to final consumers. For example, liquor store owners sell their products directly to consumers.
Exclusive Distribution Channels
An exclusive distribution channel is a special method where manufacturers deliver finished goods to designated customers or authorized dealers ( Franceschetti et al., 2017) . For example, motor vehicle manufacturers can distribute their products only to authorized car deliveries who sell them to final consumers.
E-commerce Distribution
Advancement and increased use of technology has significantly impacted the transportation and distribution of finished goods. The use of online platforms has changed traditional distribution methods. Currently, manufacturers can sell their products directly to consumers through e-commerce websites where consumers shop online and their products delivered through courier services. E-commerce has expressively affected the distribution channels because it eliminates intermediaries in the supply channel ( Mangla et al., 2019) . For example, companies like Amazon, Alibaba, and eBay have multiple order fulfillment centers in different countries worldwide, where customers collect their orders. When any party in the distribution channels breaches distribution guidelines, they are held liable for damages caused, and other legal penalties may follow. Therefore, it is prudent for all parties participating in distribution channels to perform their roles with due diligence to ensure compliance with set guidelines.
Factors Influencing Distribution Management
Proper planning and distribution management must consider various factors to improve goods' distribution process from manufacturers to end-users. The following are the main factors that influence distribution management that must be considered:
Customer Perspectives
Consumer demands and expectations are significant factors that affect effective distribution management. Consumers always expect to find all goods they want at any time. As much as wholesalers and retailers may stock enough inventory they believe their customers will order, they feel frustrated because sometimes consumers ask for other products that are either out of stock or the remaining quantity are less to meet consumer demands ( Rosli et al., 2018) . Since most customers require different products and their tastes are difficult to predict, it is challenging for wholesalers to stock enough goods to meet customer demands.
Distributor Perspectives
Distributor’s perspective is another major factor that influences distribution management in transportation and distribution. An effective distribution process requires that all resources such as fully loaded trucks are available and scheduled appropriately. Even though the distribution process may look straightforward, many challenges are always accompanied by some products requiring special handlings such as controlled temperature and minimal movements ( Rosli et al., 2018) . However, distributors may not meet such conditions, thus creating a significant concern in distribution management.
An effective distribution guideline requires that an optimal inventory level be maintained at the warehouse to ensure a steady supply. Distributors always do this to reduce spoilage, pilferages, and misuse of loose inventory. For example, companies usually use LIFO, FIFO, and the average method to maintain inventory levels in the warehouse ( Rosli et al., 2018) . Consumers always expect to find all products they require at any given time. Since distributors use different distribution strategies, consumers may not meet all their expectations from distributors, hence causing a gap in the distribution channels.
Communication
Communication also directly influences the distribution management process in supply chain management. Effective communication improves coordination between distributors and end-users of a product. Distribution management must ensure an efficient flow of information from the seller to the buyer about the product. Proper flow of information helps make correct orders, track orders, and provide more details on orders ( Rosli et al., 2018) . Besides, effective communication assists in forecasting and predicting deliveries to ensure customers receive their orders in time. To improve communication between sellers and buyers, an appropriate communication system should be used to increase information sharing among the parties involved. Since communication plays a vital role in distribution management, a suitable communication system should be used by parties involved.
Training and Commitment
Training employees how to perform their roles is an essential process in distribution management. The management process involves various methods that should be understood well. Training employees to execute the distributor's activities helps improve workflow because all people involved in the distribution process will know their roles ( Rosli et al., 2018) . Training employees is helpful because it equips them with customer care skills that can improve customer relations. Therefore, there is a need for distribution companies to train their employees on how the distribution channel operates.
Benefits of Distribution Management
Distribution management reduces shipping charges which are always incurred when many intermediaries are involved in delivering goods to consumers. Distribution management makes the shopping process easy for buyers because they can order and wait to receive their orders ( Chod et al., 2020) . Distribution in the supply chain is referred to as no-stop shopping because it involves only buyers and sellers. Therefore, it promotes convenience and increases customer loyalty.
Besides, it increases organizational profit and reduces wastage and pilferages, resulting from frequently handling bulk products ( Giriuniene & Navickiene, 2020) . When bulk quantities of products are distributed to customers through intermediaries like retailers, more quantities are wasted through pilferages when breaking bulks. However, such wastages are not realized in the direct distribution of goods from manufacturers to end-users. Consequently, consumers can get the worth of their money because no transportation costs are shifted to them by wholesalers and retailers.
Distribution Management Challenges
The distribution process is associated with various challenges ranging from human factors and natural factors. Natural disasters like bad weather conditions, flooding, hurricanes, and pandemics can affect the distribution process because they can destroy containers used in transporting products to consumers ( Alam & Arefifar, 2019) . For example, flooding can sweep away containers while on transit.
Human factors such as rioting, employee strikes, and protests can also affect the distribution process because no or few employees may participate in the process ( Saviozzi et al., 2019) . Therefore, it is imperative for distributing companies to manage human resources well to eliminate human disruptions at workplaces.
Conclusion
Distribution managers are charged with answering three significant questions that are critical in effective distribution. Different distribution channels are used to transport finished goods to final consumers. E-commerce has expressively affected distribution channels because it excludes intermediaries in the supply channel. Proper planning and distribution management must be considered to improve goods' distribution process from manufacturers to end-users. Distribution management should ensure a well-organized flow of information from the seller to the buyer about the product. The optimal inventory level must be maintained at the warehouse to ensure a steady supply to consumers. Employee training is accommodating because it equips employees with customer care skills which can improve their customer relations. Natural disasters like bad weather conditions, flooding, hurricanes, and pandemics can affect the distribution process.
References
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Giriuniene, G., & Navickiene, O. (2020, October). Evaluation of Green Supply Chain Management Benefits in Logistics Organisations. In 2020 61st International Scientific Conference on Information Technology and Management Science of Riga Technical University (ITMS) (pp. 1-5). IEEE.
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