Discover distribution management: what it is, how it works, and how optimizing it in 2024 benefits inventory, last-mile delivery, and your supply chain.
While some disruptions are beyond anyone’s control, many common issues within supply chains stem from inadequate management practices. This affects the seamless inventory flow from the manufacturer to the retailer and, ultimately, to the customer.
With omnichannel retailing on the rise, having firm control over your multi-layered and complex distribution network is essential.
In today’s blog, we’ll help you gain a deeper understanding of distribution management. We'll cover its fundamentals, processes, and how implementing route optimization software can streamline and enhance your distribution strategy in 2024.
If you want to learn how distribution management can benefit your business, especially if you’re in the e-commerce industry, then this blog is for you.
Let’s start.
Distribution management is the process of overseeing the transportation of goods from the supplier or producer to the end-user.
Packaging, inventory, warehousing, supply chain, and logistics are all examples of activities and operations that fall under transportation and distribution management.
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Distribution management’s purpose is to maintain inventories moving along the supply chain.
Profit margins and the speed with which a brand can grow are influenced by how successfully logistics and distribution management are handled.
For example, if you spend too much money on storage, you may have too much dead stock. Alternatively, if you don’t restock inventory quickly enough, it can result in a loss of sales.
Quality distribution management ensures that inventory is delivered properly to reach customers in the quickest, most efficient manner.
It helps business owners to have enough visibility into their operations to make educated good decisions and adjustments.
A strong distribution management system is also essential for staying competitive and ensuring customer satisfaction in 2024.
The ability of a corporation to attract customers and maintain a profitable business is dependent on distribution channel management.
However, in order to comprehend distribution, you must first understand the various types of distribution management channels.
Wholesalers sell raw materials and finished goods in bulk to manufacturers, distributors, and retailers at a low price.
They are often involved in the distribution of raw materials used in the production of finished goods.
Fabric wholesalers, for example, provide materials to clothing manufacturers so that they can make finished products.
Working directly with a wholesaler, manufacturer, or supplier is the option for a retailer.
To reach their target customers, major retailers usually distribute products from several vendors through various sales channels.
Walmart, for example, purchases products from a range of brands so that they can have a big selection of products for their customers either online or in their physical stores.
Distributors serve as a link between manufacturers and wholesalers and retailers.
Manufacturers license distributors who are familiar with the local market in order to sell more products when they want to expand their regional distribution.
Distributors also provide logistical and storage support in their specific areas.
Car manufacturers, for example, distribute the latest models to dealerships across several countries so that they can be marketed to end-users locally.
This is the most recent and disruptive distribution chain, in which goods and services are virtually represented online before being shipped directly to the buyer.
Online retailers order merchandise from manufacturers and suppliers and have it kept in an eCommerce warehouse.
Items are picked, packed, and shipped straight from the business after inventory is received and orders are placed online.
Ecommerce fulfillment has removed the middleman from the supply chain, allowing for faster delivery, lower rates, and greater customer service.
When it comes to controlling inventory movement along the supply chain, there are a lot of moving pieces.
And each step in the distribution management process is critical.
Let’s get specific about the initiatives that take place during the process.
Inventory receiving is critical because it prepares your supply chain for efficient, cost-effective inventory management and fulfillment later on in the fulfillment process.
When inventory arrives at a warehouse center, it has to be unloaded, processed, and then stored.
It’s critical to double-check inventory counts at this phase to ensure that what the manufacturer delivered matches what was ordered.
You risk poor inventory accuracy or lost inventory if you don’t have a proper inventory receiving method in place, which can have an impact on profit margins and inventory reporting.
When the inventory is received, it must be carefully checked to ensure that there is enough to meet demand.
Tracking and storing inventory, as well as training and supervising warehouse employees on how to best monitor inventory across the warehouse, are all part of distribution and warehouse management.
With the rise of digital warehousing, implementing a warehouse management system (WMS), a program created expressly to optimize warehouse procedures, has become the norm.
The need for manual labor is decreased as a result, allowing warehouse workers to focus on speed without sacrificing precision.
Once all items for a single order have been selected from the shelves, the packing procedure begins.
Packing is more difficult than it appears. It entails packing the right things into the right sized box with suitable packaging materials to ensure that they arrive intact and at the lowest possible cost.
Packing should always keep order within the least number of boxes to avoid split shipments.
By utilizing the proper type of packing material for each product you can decrease shipping costs and ensure order accuracy.
The packed orders are sent out to their final destinations in this final phase.
The end customer is frequently the focus of direct-to-consumer (DTC) brands, although some also provide B2B eCommerce services.
In that instance, the order-usually larger packages containing numerous units are delivered to a different company.
Ecommerce shipping is an important part of the distribution process since it affects consumer happiness.
In fact, when it comes to online buying, people consider fast and trustworthy delivery to be the most crucial factor.
Your business can provide competitive, cost-effective delivery solutions for your clients if you have a good shipping plan.
Now, we’re going to talk about distribution in the supply chain management system.
And how you can benefit from it in 2024.
Let’s take a look:
In-house fulfillment may be more manageable when you initially start out because you have a smaller volume of orders to complete.
However, in order to stay competitive and reach more customers, many firms expand into multichannel distribution operations.
When it’s done correctly, it results in a bigger volume of orders.
Technology and location are two components that are quite helpful at speeding up the fulfillment process.
Starting with automated order processing and assisting warehouse pickers in quickly locating things within the warehouse, technology can help optimize the fulfillment process.
The location is also crucial.
For example, you can reduce your reliance on a single warehouse by distributing inventory among many fulfillment facilities closer to your end customers.
You can optimize shipping by lowering costs and shortening transit times in this way.
When it comes to continuously fulfilling consumer expectations, distribution management is crucial.
You’ll never make a mistake when it comes to delivering goods from the manufacturer to the end customer using distribution management solutions.
Technology can be used to ensure that orders are delivered reliably and quickly, at the proper price and time.
A seasonal brand sells products that are only relevant during a given time period, event, or season.
For example, offering special sales deals for last-mile delivery on Black Friday and Cyber Monday.
This results in varying levels of seasonal market demand.
Demand forecasting and proper distribution management can help seasonal companies by collecting past sales data and estimating how much inventory to have on hand at these times.
You can alter inventory levels and allocate inventory based on market changes, such as seasonal sales order volume variations.
You’ll need the proper systems to collect and analyze supply chain data if you want to develop and optimize your distribution network.
You can acquire insights into how to best distribute merchandise and manage inventory throughout your network.
That is done by optimizing everything from inventory turnover rate, warehouse allocation, and how much inventory is currently accessible at each location.
Having enough visibility into operations so you can optimize your distribution strategy can help you to save money on operational expenses.
Simply storing products in several locations can help you save money on shipping while still satisfying customer expectations.
Partnering with a 3PL or 4PL that offers different locations and fulfillment services around the world is another option to boost profit margins through optimal distribution.
As a result, you’ll spend less time on logistics and save money on fulfillment.
According to research, customers in the United States will select a brand over the competition if it offers more delivery alternatives.
You can give better shipping incentives to your clients if you have a well-established distribution network management.
For example, keeping goods closer to your consumers reduces shipping costs while also shortening delivery times.
E-commerce shipping operations demand the use of delivery management software.
Delivery management software simplifies delivery by digitizing and linking the diverse parts and procedures involved in the process.
From route planning and dispatch to live customer tracking and digital proof of delivery.
Here are some of the benefits of using delivery software.
Route optimization is an important aspect of delivery operations since it entails calculating the optimum routes for delivery drivers.
Assigning the best driver or provider for a certain delivery, and other processes that speed up delivery and expand volume capacity.
Most route optimization software will optimize routes based on a particular factor, such as the lowest delivery cost or the fastest delivery time.
A delivery management platform takes a holistic approach to fleet dispatching and routing.
It will examine driver, fleet, order, and customer variables depending on your particular business procedures.
The ability to track and measure data on many components of your delivery operations is one of the most essential benefits of supply chain and last-mile visibility.
Delivery management software facilitates driver tracking and generating data from many aspects of the delivery business — inventory position, order location on the route, customer insight into order progress, and so on.
Businesses, on the other hand, may not know how to use that data.
Despite the use of technologies to provide visibility, the process of using data to identify exactly where adjustments are needed becomes more complex.
A platform that combines data and machine learning can not only track data in real-time but also transform it into crucial insights that may help you improve your deliveries.
Shipper integration is a major last-mile pain point for logistics providers.
Retailers and brands share the burden since they frequently have to juggle many third-party providers to manage their huge eCommerce volumes and lack visibility into real delivery.
This difficulty can be solved using delivery management software, although only big platforms will typically provide the necessary connections between shipper and delivery provider systems.
Consumers feel that same-day delivery would increase their brand loyalty.
Retailers and logistics providers should work on digitizing and automating their dispatching and route planning in 2024. It will help to overcome common same-day delivery issues and deliver huge quantities swiftly.
Any on-demand delivery solution must include dispatch management, which provides operational teams with an interface for scheduling driver pick-ups and deliveries.
Good dispatch management saves time identifying who should be allocated to a task by having complete, end-to-end visibility of the delivery business as a whole.
A successful supply chain plan must include contingency strategies to handle unforeseen situations effectively.
Unexpected disruptions, shifts in demand, and economic or environmental obstacles can impact distribution at any moment.
Here’s a look at frequent distribution management challenges and tips for preparing to tackle the unexpected.
From severe floods and wildfires to intense rainstorms and snow, climate change is driving unpredictable weather patterns worldwide. These disruptions can impact inventory levels and lead to delivery delays.
To minimize weather-related risks, consider storing inventory across multiple locations. This way, if one warehouse or fulfillment center shuts down due to severe weather, orders can still be fulfilled from other sites.
During the pandemic, many large carriers reached capacity limits and faced challenges in delivering a surge of packages on time.
While shipping delays can happen at any time, diversifying your carrier partnerships by using both major and regional carriers can help. This approach provides alternative options if one carrier is experiencing delays.
For example, since the pandemic’s onset, ShipBob has shared weekly updates on carrier performance, helping online brands monitor delays and proactively inform customers of potential impacts on delivery times.
Shortages of raw materials or manufacturing delays can significantly disrupt your supply chain. Partnering with multiple suppliers or production sources is an effective way to address these shortages or delays.
This approach helps safeguard against stockouts and ensures continued replenishment if your primary supplier faces challenges due to shortages, shutdowns, or trade restrictions.
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As distribution demands grow, optimizing routes becomes essential for e-commerce businesses to deliver faster and more efficiently. eLogii’s route optimization software is designed to streamline distribution by creating the most efficient routes for delivery drivers, minimizing delays and reducing fuel costs. Here’s how eLogii can make a difference in your distribution strategy in 2024:
In 2024, leveraging eLogii’s route optimization capabilities can help your business stay competitive and responsive to customers’ expectations for fast, reliable delivery.
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