I'hysufil distribution siaris at the factory. Managers chouse a set of warehouses (stocking points) and transportation carriers that will deliver the goods to final destinations in the desired time or ai the lowest total cost. Physical distribution litis now been expanded into llie broader concept of supply chain management (SCM), Supply chain management starts i io fore physical distribution: It Involves procuring the right inputs (raw male rials, components- and capital equipment); convening them efficiently into finished products; and dispatching them to the final destinations. An even broader perspective calls for studying how lite company's suppliers themselves obla in their inputs. The supply chain perspective can help a company identify superior suppliers and distributors and help them improve productivity, which ultimately brings down the company's costs.
Market logistics involves planning the bifrastructure in meet demand, then impteinetiling and controlling the physical flows of materials and final goods from points of origin lo points o fuse, to ineel customer requirements at a profit, Market logistics planning has four steps:
1. Deciding on the company's value proposition to tis customers, (What on-time delivery standard should be offered? tvhat levels should be attained in ordering and billing accuracy?)
2. Deciding on ihe best channel design and network strategy for reaching the customers. (Should die company serve customers directly or through intermediaries? what products should it source from which manufacturing facilities; How many warehouses should it maintain and where should they be located?}
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