In business , distribution refers to the movement of both goods and services from their source through a distribution channel to the final customer, consumer or user. Likewise, it incorporates the movement of payment in the reverse direction, to the original supplier or supplier ( Szopa & Pękała, 2012 ). On the other hand, transportation refers to the devices that are used to distribute goods from one place to another. The most popular modes of transportation are trains, vehicles, planes, ships, boats among others. Both distribution and transportation play a significant role in the success of an enterprise and are therefore critical to any business process. In this paper, the role of transportation and distribution management to a business entity will be discussed . The paper will also identify the aspects that make the two elements core drivers of a company ’s success. Overall, proper distribution and transportation systems facilitate trade between parties where goods are involved and thus, are needed for a business to thrive and gain long-term success.
Transportation and Distribution Management in a Business Enterprise
Most often, both transportation and distribution are defined by the shipping and allocation of goods in a manner that is efficient and cost-effective. For instance, the personnel mandated to oversee the transportation and distribution in a business entity are required to develop budgets and financial plans, analyze costs, and ensure that all processes adhere to the existing government policies. Apart from this, the personnel also facilitate negotiations between dealers and transport service providers to find the best services and to ensure that the costs incurred are minimized . Further, the managerial teams in these departments are mandated to hire as well as train personnel (Robinson, 2013; Tseng et al., 2005 ). Moreover, the management team is expected to formulate policies and design safety and efficiency procedures.
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Transportation management focuses on the movement of the merchandise ( Tseng et al., 2005 ). The process must thus ensure that the chosen shipping methods, routes, and schedules meet the goals of the particular company. Any problem that might arise from the process, whether it affects the vendor or client, must be resolved and addressed through the existing structures of transportation. However, the transportation department works closely with government authorities to resolve problems arising from accidents and to ensure that safe and legal shipping procedures are adopted. Moreover, the transportation management personnel are expected to document all activities in the process and make sure that they comply with the requirements of both the government and other international commerce regulations ( Tseng et al., 2005 ).
The distribution management is also mandated to oversee the operations of warehouses. Their roles are therefore to design, identify, and locate storage centers that are in line with the goals of the business entity. Likewise, using information from sales and production, the distribution management team ought to predict the size or volume of the storage center or distribution centers. Thus, the distribution department works hand in hand with the transportation management department to process goods for transportation in and out of the facility. It also facilitates safe and secure packaging of merchandise. Lastly, informed by purchase orders, it coordinates shipments and prepares all the shipment-related documentation ( Tseng et al., 2005 ).
The role of Distribution and Transportation in Commerce
Distribution is a core component of an enterprise’s marketing mix. This is because it plays a vital role in the attainment of the organization’s economic and marketing objectives (Gherasim & Gherasim, 2016). Without distribution and transportation, both production and consumption of goods would be impossible. It is through distribution that consumers’ can derive satisfaction from the products of their choice. Secondly, as a result of streamlined transportation and distribution systems, goods can be circulated, ultimately finding their way into the hands of the end consumers. Through distribution and transportation, products undergo three distinct changes. These include physical change, temporal and spatial transformations, and lastly psychological and commercial transformation. The processes of transportation and distribution act as intermediaries between production and consumption (Gherasim & Gherasim, 2016).
Transportation and distribution are necessary for the business process because it is through them that the goals of the company are achieved . The ultimate goal of doing business is to ensure that profit is attained following the purchase of products being offered . Therefore, the distribution and transportation processes ensure that this goal is met by providing clients with the goods wherever and whenever they need them. Distribution and transportation also package the end product in quantities and materials that can be handled by the end user. Moreover, the process allows for the transfer of ownership of goods from the producers to consumers. Also , through distribution and transportation, there is a streamlined and organized flow of goods, using cost-effective means that suit both the consumer and business ends (Gherasim & Gherasim, 2016).
The chain of distribution uses several intermediaries to ensure that the goods reach the final consumer. The chief role of the intermediaries is to assist in the movement of goods from the unprocessed form to the manufacturers and finally to the consumers. These intermediaries may include independent organizations that cooperate with the system of production and marketing to fulfill the needs of producers and consumers. The distribution and transportation channels also enhance the flow of information and money from consumers to producers or business owners. Mostly, distribution and transportation intermediaries compete on the basis of price, service, location, and selection ( Frazier, 1999 ).
Many manufacturers prefer producing goods and shipping them in large quantities (Mayer, 2014). This is aimed at avoiding the costs incurred from the shipping of small quantities , invoicing customers, collecting payments, handling returns and providing after-market services (Mayer, 2014). Due to these reasons, it is vital that the channels through which goods are transported to the consumers are cost-effective. Distribution and transportation can also be viewed as a network of organizations that are mandated to undertake inventories of the purchase or demand rates. This information assists in predicting the quantities that must be produced so as to satisfy the needs of the prospective clients (Mayer, 2014). In this regard, the distribution and transportation channels play a role in determining the consumer-based demand.
Based on the above arguments, the role of distribution and transportation include the following;
Satisfaction of customer wants: The chief aim of the distribution process, which also incorporates transportation, is to ensure that a company earns a profit through satisfying the need of its customers. Likewise, information flows from the consumers to the producers via the distribution channel, and this information may lead to the development of new products.
Improving the customers’ living standards: When efficiently carried out, the channel of distribution enhances the lifestyle of the targeted clients through the transfer of ownership of the goods.
Warehousing and transportation enhance the essence of products by creating place , time and quantity utilities hence increasing the value of the goods . It also ensures that distribution is efficient due to the delivery of goods in the right amount , and at the right place and time ( Gundlach et al. , 2006).
Distribution and transportation enhance communication between manufacturers and consumers. As a result, producers can share information on products, price, and promotion with their customers and other stakeholders. Similarly, information on competitors, clients, and the prevailing market conditions is able to flow from the marketplace to the producers.
The chain of distribution enhances the efficiency of business operations. This is by helping to gauge the amounts of product needed at a particular place and time.
The process of distribution aids in the protection of products. This is through proper storage and handling, which ensures that the end-users receive the goods while still in good conditions.
Transportation and distribution aim to achieve cost-effectiveness in the manufacturer-to-consumer product passage. This ensures that none of the parties involved in the transaction incurs a loss.
Distribution and transportation of goods are important processes in any organization that aims to make a profit. Distribution is one of the essential aspects of a ‘supply chain strategy' that ensures satisfaction and product competitiveness. These processes are critical to a business because they facilitate the flow of information and goods from the producers to the markets. Likewise, proper use of distribution channels allows a company to know the quantity of goods required to satisfy the needs of its customers at a particular place and within a given period . The information acquired in the processes over time can also be used to predict the size and volume of space needed to store an amount of goods which is likely to satisfy the needs of the clients. The transportation and distribution processes should be designed in a manner that ensures cost-effectiveness so as to maximize the benefits accrued for both producers and consumers. Moreover, the processes should adhere to the market regulations and policies that have been enacted by a particular government. Thus, against this background, the role of distribution and transportation in determining a company’s over overall success cannot be overstated. In conclusion, it i s hard to decouple transportation and distribution any form of profit-oriented commerce.
References
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Gherasim, A., & Gherasim, D. (2016). The Role of Distribution in the Marketing Mix. Economy Transdisciplinarity Cognition , 78-82.
Gundlach, G. T., Bolumole, Y. A., Eltantawy, R. A., & Frankel, R. (2006). The changing landscape of supply chain management, marketing channels of distribution, logistics and purchasing. Journal of Business & Industrial Marketing , 21 (7), 428-438.
Mayer, D. (2014). The Importance of Distribution in the Supply Chain . Retrieved 2016, from Industrial Knowledge Zone.
Robinson, A. (2013). What is Transportation and Logistics Management and Are They the Same Thing? Retrieved 2016, from Cerasis.
Szopa, P., & Pękała, W. (2012). Distribution channels and their roles in the enterprise. Polish Journal of Management Studies , 6 , 143-150.
Tseng, Y. Y., Yue, W. L., & Taylor, M. A. (2005). The role of transportation in logistics chain. Eastern Asia Society for Transportation Studies.
