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There are many different elements of the physical distribution system.
This element determines the ways with which a customer's happiness is met. Some companies may only use automated services, and others may use live support. Customer service also encompasses timeliness and ease with which the customer finds when it comes to ordering products.
Transportation is another element in physical distribution. Companies must look at both cost and timeliness. Some companies may choose either ground or air to transport their products. Many of these decisions are based upon both need for the product and cost to the consumer or company.
Companies need to research warehousing. Some companies may choose to store their own goods, while others may chose to hire outside warehouses to store their goods. These choices are tied into transportation decisions as well.
Inventory control is very important. If a company has either a surplus or excess of product it can be an problem. Products which have specific shelf-lives can spoil if not inventoried properly. Other times, if an order is made and the product is not available a customer can be dissatisfied (which links to customer service).
Companies must make decisions regarding how customers order products. Some companies chose on-line ordering, catalogue ordering, or phone ordering. This decision depends upon cost, customer support, and product availability.
Packaging and Handling
Packaging and handling is important for both the product's quality and appearance and customer satisfaction. Products which are not packaged and handled properly may arrive damaged--lowering customer satisfaction. Curiously enough, the way a package looks can also impact a customer's satisfaction with the product.
Essentially, all of the elements of physical distribution are intertwined. Each impacts and is impacted by the next.
There are many different questions which need to be answered regarding the different elements of physical distribution.
Companies must ask the following questions when determining the customer service they will provide.
1. What type of customer service needs to be offered to consumers? 2. What considerations will be made for customer issues (billing, damaged products, partial orders, items on back-order)? 3. What type of customer service will be most/least profitable for the company?
1. What types of product transportation are obtainable for the company? 2. What are the different costs associated with each mode of transportation? 3. What are the different arrival times associated with each mode of transportation?
1. Is there enough room to warehouse the product on-site? 2. What options are there with external warehousing companies? 3. What is the turnover time from placed order to shipping, when looking at internal or external warehousing?
1. What type of inventory control is in place, if any? 2. What options are there for inventory control? 3. Is there a way to keep exact inventory of product on hand?
1. How do customers like to order products? 2. What options does the company have? 3. What can the company do to save money or ordering?
Packaging and Handling
1. What can the company do to make product packaging and handling more cost efficient? 2. Is the product packaged in material which protects the product? 3. Is the packaging appealing to the consumer?
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