M4 (FINALS) Flashcards
is the term used to describe the method and means by which a product or a group of products are physically transferred, or distributed, from their point of production to the point at which they are made available to the customer.
Physical Distribution
Physical distribution channel types and structure (3)
- Manufacturer to retail
- Direct Deliveries
- Different Structure
Physical distribution channel types and structure:
the main alternative channels for a single consumer product being transferred from a manufacturer’s production point to a retail store
Manufacturer-to-retail
The manufacturer or supplier delivers direct from the
production point to the retail store, using its own
vehicles.
This channel is only used when full vehicle loads are
being delivered, thus it is quite unusual in today’s
logistics environment.
choices:
A. Manufacturer direct to retail store.
B. Manufacturer via manufacturer’s distribution operation to
retail store
C. Manufacturer via retailer distribution centre to retail store.
D. Manufacturer to wholesaler to retail store.
E. Manufacturer to cash-and-carry wholesaler to retail store.
F. Manufacturer via third-party distribution service to retail
store
G. Manufacturer via small parcels carrier to retail store
H. Manufacturer via broker to retail store
A. Manufacturer direct to retail stores
The manufacturer or supplier holds its products in a
finished goods warehouse, a central distribution centre (CDC) or a series of regional distribution centres (RDCs).
* The products are transported in large (primary, line-haul or trunk) vehicles to the sites, where they are stored and then broken down
into individual orders that are delivered to retail stores on the supplier’s retail delivery vehicles.
* All of the logistics resources are owned by the manufacturer.
choices:
A. Manufacturer direct to retail store.
B. Manufacturer via manufacturer’s distribution operation to retail store
C. Manufacturer via retailer distribution centre to retail store.
D. Manufacturer to wholesaler to retail store.
E. Manufacturer to cash-and-carry wholesaler to retail store.
F. Manufacturer via third-party distribution service to retail store
G. Manufacturer via small parcels carrier to retail store
H. Manufacturer via broker to retail store
B. Manufacturer via manufacturer’s distribution operation to retail store
This channel consists of manufacturers either supplying their
products to national distribution centres (NDCs) or RDCs for final
delivery to stores for final delivery.
These centres are run by the retail organizations or by their thirdparty contractors.
The retailers then use their own or third-party delivery vehicles to
deliver full vehicle loads to their stores.
This type of distribution channel grew in importance during the
1980s as a direct result of the growth of the large multiple retail
organizations that are a feature in high streets and now in large
retail parks.
choices:
A. Manufacturer direct to retail store.
B. Manufacturer via manufacturer’s distribution operation to retail store
C. Manufacturer via retailer distribution centre to retail store.
D. Manufacturer to wholesaler to retail store.
E. Manufacturer to cash-and-carry wholesaler to retail store.
F. Manufacturer via third-party distribution service to retail store
G. Manufacturer via small parcels carrier to retail store
H. Manufacturer via broker to retail store
C. Manufacturer via retailer distribution centre to retail store.
Wholesalers have acted as the intermediaries providing
the link between the manufacturer and the small retailers’
shops
Physical distribution channel has altered with the
development of wholesale organizations or voluntary
chains (often known as ‘symbol’ groups in the grocery
trade). They originated securing a price advantage by
buying in bulk from manufacturers or suppliers.
One consequence of this, wholesalers use their own
distribution centres and vehicle fleets.
choices:
A. Manufacturer direct to retail store.
B. Manufacturer via manufacturer’s distribution operation to retail store
C. Manufacturer via retailer distribution centre to retail store.
D. Manufacturer to wholesaler to retail store.
E. Manufacturer to cash-and-carry wholesaler to retail store.
F. Manufacturer via third-party distribution service to retail store
G. Manufacturer via small parcels carrier to retail store
H. Manufacturer via broker to retail store
D. Manufacturer to wholesaler to retail store.
These are usually built around a wholesale
organization and consist of small independent shops
collecting their orders from regional wholesalers, rather
than having them delivered.
The increase in cash-and-carry facilities has arisen as
many suppliers will not deliver direct to small retail
stores because the order quantities are very small.
choices:
A. Manufacturer direct to retail store.
B. Manufacturer via manufacturer’s distribution operation to retail store
C. Manufacturer via retailer distribution centre to retail store.
D. Manufacturer to wholesaler to retail store.
E. Manufacturer to cash-and-carry wholesaler to retail store.
F. Manufacturer via third-party distribution service to retail store
G. Manufacturer via small parcels carrier to retail store
H. Manufacturer via broker to retail store
E. Manufacturer to cash-and-carry wholesaler to retail store.
Third-party distribution has grown very rapidly due to the
extensive rise in distribution costs and the constantly changing
and more restrictive legislation that has occurred.
A number of companies have developed a particular expertise
in logistics operations.
These companies can be general distribution services but may
also provide a ‘specialist’ service for one type of product .
Developments of outsourcing as it is also commonly know
choices:
A. Manufacturer direct to retail store.
B. Manufacturer via manufacturer’s distribution operation to retail store
C. Manufacturer via retailer distribution centre to retail store.
D. Manufacturer to wholesaler to retail store.
E. Manufacturer to cash-and-carry wholesaler to retail store.
F. Manufacturer via third-party distribution service to retail store
G. Manufacturer via small parcels carrier to retail store
H. Manufacturer via broker to retail store
F. Manufacturer via third-party distribution service to retail store
This channel provides a ‘specialist’
distribution service where the ‘product’
is any small parcel.
There was an explosion in the 1980s
and 1990s of small parcels companies,
specializing particularly in next-day
delivery.
Small parcels carriers now also
specialize in making home deliveries.
choices:
A. Manufacturer direct to retail store.
B. Manufacturer via manufacturer’s distribution operation to retail store
C. Manufacturer via retailer distribution centre to retail store.
D. Manufacturer to wholesaler to retail store.
E. Manufacturer to cash-and-carry wholesaler to retail store.
F. Manufacturer via third-party distribution service to retail store
G. Manufacturer via small parcels carrier to retail store
H. Manufacturer via broker to retail store
G. Manufacturer via small parcels carrier to retail store
A broker is similar to a wholesaler in
that it acts as intermediary between
manufacturer and retailer.
It is often more concerned with the
marketing of a series of products,
and not necessarily with their
physical distribution.
A broker may use third-party
distributors, or it may have its own
warehouse and delivery system.
choices:
A. Manufacturer direct to retail store.
B. Manufacturer via manufacturer’s distribution operation to retail store
C. Manufacturer via retailer distribution centre to retail store.
D. Manufacturer to wholesaler to retail store.
E. Manufacturer to cash-and-carry wholesaler to retail store.
F. Manufacturer via third-party distribution service to retail store
G. Manufacturer via small parcels carrier to retail store
H. Manufacturer via broker to retail store
H. Manufacturer via broker to retail store
There are additional channels for industrial
products and for the delivery of some consumer
products that do not fit within the structure of the
diagram because they bypass the retail store
There are different types of distribution channel for
these flows, which are sometimes referred to as
business to consumer (B2C)
Direct Deliveries
Goods are ordered by catalogue, and delivered to
the home by post or parcels carrier.
The physical distribution channel is thus from
manufacturer to “________” as a
conventional primary transport (line-haul)
operation, and then to the consumer’s home by
post or parcels carrier, bypassing the retail store.
Choices:
A. Mail order.
B. Factory direct to home
C. Internet and shopping from home.
D. Factory to factory/business to business (B2B)
Mail Order
It can occur by direct selling methods, often as a
result of newspaper or magazine advertising.
It is also commonly used for one-off products that
are specially made and do not need to be stocked
in a warehouse to provide a particular level of
service to the customer.
Choices:
A. Mail order.
B. Factory direct to home
C. Internet and shopping from home.
D. Factory to factory/business to business (B2B)
B. Factory direct to home
The move to internet shopping for grocery
products led to the introduction of additional
specialist home delivery distribution operations.
A completely new channel development is that of
computer-to-computer, as some products, such as
music, software, films and books are distributed
directly online.
Choices:
A. Mail order.
B. Factory direct to home
C. Internet and shopping from home.
D. Factory to factory/business to business (B2B)
C. Internet and shopping from home.
