What is distribution logistics? - Definition & basics
Distribution logistics (also known as sales logistics) comprises the planning, management and control of the delivery of goods directly to the retailer or end customer.
It ensures that products are transported cost-effectively and efficiently from the manufacturer to the end customer, utilising the advantages that arise from a holistic management approach to the various areas of sales logistics.
The various areas of distribution logistics include
Warehousing & inventory management
- Order management/processing
- Transport
- Packaging
The primary aim of distribution logistics is to maximise customer satisfaction and save costs. In the following, we will take a closer look at the specific tasks involved in distribution logistics.
The specific tasks of distribution logististics
In the area of storage and inventory management, sales logistics ensures that products are available exactly when they are in demand. This can be achieved by analysing orders from any past period (for example, the last 12 months) and calculating future demand based on this. Production is then adjusted to future demand in order to minimise excess stock and reduce storage costs. Of course, it's not quite that simple. Fluctuations in demand can quickly lead to stress and chaos in production on the one hand, and idle time on the other. For this reason, safety stocks are planned as part of inventory management in order to be able to compensate for the fluctuations just mentioned.
Order management as a further component of distribution logistics ensures that orders are recorded, processed and the associated invoices are created and processed. At this point, I recommend EIKONA Order Management, as you can automate and digitalise your order management with our module.
Transport, which is a core component of distribution logistics, endeavours to get goods to the end customer as quickly and cost-effectively as possible. This can be done by haulage companies, but also by the company's own fleet of vehicles. Software that not only calculates the route but also predicts the time of arrival is extremely helpful here.
Packaging also plays an important role as the last point in the definition of distribution logistics given here, as the customer naturally wants to receive their goods in perfect condition. The goods should be robustly packaged so that the end customer statistically almost always receives their goods without any transport damage - there is no 100% guarantee that transport damage will never occur.
Summary
Distribution logistics, also known as sales logistics, comprises the planning, management and control of the delivery of goods to retailers or end customers and aims to transport products quickly and cost-effectively from the manufacturer to the end customer. The most important areas of distribution logistics are storage and inventory management, order management, transport and the packaging of goods.