distribution and delivery

Distribution and DeliveryDistribution and Delivery

Higher Business Management

Operations – Distribution and Delivery – Dec 2008 - JB

Distribution and DeliveryDistribution and Delivery

The successful manufacture of goods is only one part of the overall business

Safe and efficient distribution to wholesalers, retailers or delivery to the customer are essential

Finished goods, work in progress and raw materials are all held in stock

The type of storage depends on: - stock being held- finance available- company policy- the number and location of customers


WarehousingWarehousing Organisations make use of warehousing

facilities to bulk store their goods Warehouse space may be owned, leased or

rented by the organisation The warehouse may be a centralised function of

the organisation or it may be located a distance from the main operations

Stocks of finished goods are stored in order to meet demand quickly

The main aspects of warehousing are:- design and layout- mechanical handling- transportation


amazon.co.ukamazon.co.uk


Design and LayoutDesign and Layout

Ideally warehouses should be located on the ground level

Those goods that are moved most frequently should be located in a readily accessible area

A stock rotation system should operate to avoid deterioration in quality


Mechanical HandlingMechanical Handling

Organisations may use specialist stock handling equipment which can be very costly to purchase

However, benefits from it’s use can be substantial Space used and time required to move stock are

minimised Pallets are often used in warehouses and are

relatively cheap They are easily moved using forklift trucks and

enable stock to be stored off the floor


PalletsPallets


TransportationTransportation The decision on which type of transport to use

will be based on the needs of the particular business and the costs involved

Organisations may own transport, hire transport or use public transport

TYPE ADVANTAGES DISADVANTAGES

Own

Complete control High initial investment continuing running costs

Hired

No capital investment Ability to change

requirements quickly

Less control

Public

No capital investment Cheaper

Unreliable Poor value for money Little control


Transport and Delivery in Transport and Delivery in BritainBritain

During the last decade, British businesses have become more dependent on the roads network for transport and delivery of goods and services

Use of railways has decreased and the road system in under constant pressure

Choice of transport comes down to the associated costs and benefits…

Air transport is the most costly, but may be the only option in some cases (for fast delivery)

Large freight carriers have their own fleet of cargo planes Prestwick International Airport in Ayrshire is the largest

cargo airport in Scotland


Transportation in Britain

64%7%

5%

24%

Road

Rail

Pipe Lines

Water

Source: www.transtat.dtlr.gov.uk


Problems with Road Problems with Road TransportTransport

UK government has consistently raised fuel duty and road tax and has a policy of restricting the number of new roads being built

Working time regulations also restrict how long a driver can operate for and this also increases costs

Some transport companies have found it financially viable to move their businesses to Europe

Bad weather, road works and congestion can delay/hinder successful delivery


Distribution MixDistribution Mix The route through which a manufacturer distributes

products is known as the distribution mix…

Distribution Mix

The Product

Legal Restrictions

Manufacturer’s Distribution

Capacity Finance Available

Reliability of other

Organisations


SchedulingScheduling

Making sure that all the factors of production are taken into account and are working harmoniously with each other

Raw materials, components, workers, machinery, transport systems and sales outlets have to be organised in such a way as to make sure that the work flows through the stages of production and delays and unused resources are avoided

The production function of an organisation has a central role to play and has to maintain close links with all other departments


QuestionsQuestions

1. Outline why organisations may need to have warehousing facilities?

(3 marks) 2. Describe the factors that determine the method of

transport used.(3 marks)

3. Explain the reasons why road and rail transport are not popular methods of transporting goods in this country.

(3 marks)


SolutionSolution

1. ?


SolutionSolution

2. ?


SolutionSolution

3. ?

distribution and delivery

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