The Nature Of Distribution

In business and in the society, goods and services must move from one person to another, from one region to another or even across the global in order to foster economic progression and development. logistics and distribution therefore ensures this interplay is efficient which enhances trade and global economic development. Logistics and distribution can be described as the transportation of raw materials, equipment, finished products and labour from one place to another. Companies that provide this service are known as Logistic companies.

Get in touch with logistics companies such as Gurteen Transport for any distribution or logistical based enquiries.

Disadvantages of an ineffective logistics management system

High cost of goods and services

When there are inefficiencies in the logistics systems, the cost of transportation of raw materials to the factories or manufacturing plants increases. The cost of distributing the final products and delivering quality services to clients also increases. This essentially shrinks the effective market of the products and the services. This may also mean lower profitability for the businesses involved. 

Business inefficiencies

When the distribution network is not working properly, it may result in loss of time and resources for the business. The raw materials may get spoilt on their way to the manufacturing plants while the final products may also get damaged as they are being transported to the clients. Logistics also plays a role in the delivery of equipment and machinery from suppliers to the manufacturing plants. When the service is outsourced, it may introduce bad blood between the logistics companies and other organisations in the economy. Logistics may also delay the transportation of labour to and from the areas of operation which increases the overall inefficiency.

Lower competitive advantage

There are many ways that businesses can achieve a competitive advantage in the market. An efficient logistics system ensures that the business has the raw materials to manufacture products on time as well as deliver them to clients. Lack of an efficient system leads to loss of the opportunity to gain a competitive advantage over competitors increasing the profit margins and success of the business.

Inability to satisfy customer needs as they arise

Customers expect their needs to be met when they arise. A company that is able to achieve this not only earns itself loyal clients but it is also able to get new clients through referral by existing clients. However, when there are inefficiencies in logistics management, the clients' needs will not be met when they arise leading to dissatisfaction and loss of business over time.

Ideally, when the logistics and distribution process is not working well, the effect is carried forward and compounded in other departments. Eventually, the business will fail. This represents a loss of income to many investors which may also cripple the economy if the problem is widespread.

Vehicles used in Logistics and distribution

The type of vehicle used in the logistics and distribution process will depend on the bulkiness of the products, the distance involved, quantity of products and the preferences of the business owners. For short distances and products that are not bulky, double cabin pick up vehicles may be used. However, for longer distances and bulky products, heavy commercial vehicles such as heavy duty lorries and trucks are utilised.

Logistics may also involve the transportation of people from one area to another. In such a case the vehicles used should be comfortable especially in the case of long distances. The vehicles used may be standard utility vehicles, minivans, passenger buses and any other vehicle that may be deemed fit for special interest groups such as people with disabilities.