Based on predictions rooted in the past, decisions on how the manufacturing process (i.e. getting supplies to the proper distribution channels, etc.) are to run shall be made. It is vital that such manufacturing process decisions be somewhat flexible in order to adapt to changes that occur within the particular market the company is operating in; the process should also be able to accommodate mass customization.

Distribution takes into account the flow of a final product from the factory to the customers. The customer is the marketing channel’s final product. In the realm of physical distribution, the availability of that product is a vital aspect of the marketing efforts. Customer service is also a key component of the process of distribution, as it is a vital part of marketing. Therefore, distribution links marketing to the customers for a given product; these customers might include retailers, wholesalers, or manufacturers.

In the past, certain services might have been provided in house, but it was later determined that it makes more sense to outsource that aspect of the production of a product or a service. This allows a company to focus exclusively on the production of those products or services that it knows best and will therefore bring it some advantage that outsourcing would not.

In recent years, outsourcing has been a particular trend in logistics. Overseeing transportation, inventory, and warehousing is increasingly a job that is subcontracted to those who specialize in these arenas. Managing this level of the supply chain depends on agreements among the various partners and suppliers. Central decisions must be made on a local level to ensure that day-to-day goals are met and that supplier performance is upheld to quality standards.

Competency in logistics has increasingly become a vital area in supply chain management. Thus, the measurement of logistics can mean the difference between a profitable operation and an unprofitable one. Those firms that regularly engage in a comprehensive degree of performance measurement are able to make improvements in their overall level of productivity, and hence help improve their profitability on a regular basis.

In the next article, we will learn about Supply Chain Management viz. Software and RFID Solutions.

First Page: Supply Chain Integration