DISTRIBUTION MANAGEMENT

Dr. Ir. Agus Purnomo, MT

Part of supply chain management that plans, implements, and
controls the efficient, effective forward and reverses flow and
storage of goods, services and related information between the
point of origin and the point of consumption in order to meet
customers' requirements.
(Council of Supply Chain Management
Professionals/CSCMP, 2020)
Logistics = Materials management + Distribution
 Service company :
o Banking
o Telecommunication
o Insurance
o Hospital
o Education
o etc
Logistics is not Manufacture company :
the company's o Transport equipment, machinery & equipment (Automotive)
core business o Textiles & Textile Derivative Products
(operations o Food, Beverages & Tobacco
supporting o Fertilizers, Chemicals, Rubber Products
activities) o Cement, coal & non-metal excavated goods
o etc

Government institutions :
o Local government
o Ministry
o Logistics Agency
o Disaster management Agency
o etc
 Courier & Service Companies :
Pos Indonesia, Tiki, Pandu Siwi, Fedex, UPS, TNT, DHL, Airbone, etc

Express/ Distribution :
Caraka, RePex, Tiki/JNE, Cardig, PT Pos Indoneisia, TNT, FedEx, DHL Express, dll
Value Added Warehouse & Distribution:
Wira, Linc Group, GoTrans, Syncrum, PosLog, Linfox, Ceva, YCH, etc

Freight Forwarding:
Kamadjaja, MIF, Ritra, FIN, Agung Raya, PosLog , Schenker, DHL Danzas, MNC, NYK, APL,
KLM, etc
Logistics is the
company's Distributor:
core business Indomarco, Enseval, Dos Ni Roha, Rodamas, Tigaraksa, Wicaksana, Zuelig APL, DKSH, dll.
Retail:
Carefour, Macro, Giant, Goro, Indogrosir, Yomart, Alfamart, Circle K, etc
Container Terminal:
JICT, Koja, Pelindo, TPS, MTI, PI, dll
Ocean Carrier (Shipping)
Meratus, Samudera Ind, Tanto, Tempuran Mas, Maersk, OOCL, NYK, etc
Air Carrier (Air Cargo):
Garuda, Merpati, Lion, City Link, Air Asia, KLM, JAL, SQ, dll
Land Carrier :
Dunia Express, Syncrum, Puninar, Iron Bird, JIT, Sipure, CTL, Satya Ragam, Lorena, dll
Logistics Management Components
 Warehouse Management
• This function is responsible for the storage and handling of
inventories beginning with supplier receipt and ending with
dispersion to internal or external customers.
• The effective management of inventory in the supply chain
requires efficient and well-managed warehousing techniques. Key
activities are inventory storage, material handling, equipment and
labor utilization, receiving, put away, and returns.
• Critical concerns are the pursuit of lean philosophies,
environmental sustainability, reduction of wastes, use of third
party logistics (3PL) partners, utilization of warehouse
management systems (WMS), integration with transportation,
and pursuit of flow-through techniques for storage and picking.
 Transportation Management
• This function is defined as the movement of product from one node
in the supply chain to another, ending with delivery to the customer.
• Activities performed are optimization of shipping capacity
utilization, decreasing less-than-truckload shipments, and applying
postponement strategies.
• Accurate documentation is necessary to effectively manage country
quotas, tariffs, import/export regulations, product classification, and
letters of credit.
• Critical concerns are management of private fleets and 3PL partners;
audit, payment, and claims; transport routing, tracking, and
optimization; government regulation, security, and compliance; and
the utilization of transportation management systems (TMS).
 Performance Measurement
1. Logistics productivity, provides information concerning
productivity standards, level of logistics cost optimization,
integration of quality management processes, and broadening of
logistics service levels.
2. Logistics service performance, tracks customer service goals,
such as product availability, order cycle time, logistics system
flexibility, depth of service information, utilization of
technologies, and breadth of post-sales service support.
3. Logistics performance measurement systems, details the
content of performance metrics, how performance data are
captured, and the systems used to track and report on
performance.
The Logistics/Supply Chain Mission

Getting the right goods or services

to the right place, at the right time,
and in the desired condition at the
lowest cost and highest return on
investment.
1. Make a real example of distribution activities in
companies!
2. Based on the figure Logistics Activities, then explain
the distribution activities whether in Inbound or
Outbound Logistics, or in both inbound and outbound
Logistics!

13
MATERIALS MANAGEMENT VS PHYSICAL DISTRIBUTION MANAGEMENT

MATERIALS MANAGEMENT. This component has been classically

identified with the incoming Flow of materials, components, and
products into the enterprise. Materials management can be defined as
the group of operation functions supporting the cycle of materials flow
from the purchase, receipt, and control of production inventories, to the
manufacture and delivery of finished goods to the channel system.

PHYSICAL DISTRIBUTION MANAGEMENT. This function is normally

associated with the outbound flow of finished goods and supporting
services through the distribution channel necessary to satisfy customer
requirements.
 Networking organization (supplier, manufacturer, distribution center,
customer) & the activities associated with the flow & transformation
of goods, information and money
Information
Product
Money
Suppliers Manufacturers Warehouses & Customers
Distribution Centers

Distribusi

Distribusi

Distribusi

Transportation Transportation
Costs Costs
Manufacturing Costs Inventory Costs Transportation
Material Costs
Costs
Supply Chain = Suppliers + Logistics + Customers
What Is Supply Chain Management (SCM)?

• A set of approaches used to streamline integration :

– Suppliers
– Manufacturers
– Warehouses
– Distribution centers
• Meet the desired service level
• Keys to effective SCM :
- Information
- communication
- cooperation
- trust
Supply chain management encompasses the planning and
management of all activities involved in sourcing and
procurement, conversion, and all logistics management activities.
Importantly, it also includes coordination and collaboration with
channel partners, which can be suppliers, intermediaries, third
party service providers, and customers. In essence, supply chain
management integrates supply and demand management within
and across companies. (CSCMP, 2017)
Supply Chain Management Competencies
 Customer Management
• Customer relationship management (CRM) is founded on the recognition
that as customers demand to be more involved in product/service design,
pricing, and order configuration, companies must focus their efforts
beyond brand and marketing-based strategies to establish enriching
customer relationships.
• The goal of CRM is to provide complete visibility to all aspects of the
customer, from facilitating the service process and collecting data
concerning customer buying history to optimizing the buying experience.
• CRM provides companies with the ability to architect a mosaic of
processes for the generation of fast flow, flexible, and synchronized
delivery systems that enable customer self-service; configuration of
customized, individualized value-solutions; and fulfillment functions
providing the highest levels of service and value.
 Supplier Management
• Businesses have always known that the relationship between buyer
and seller, and not just product price and quality, determines the real
value-add component of purchasing. This viewpoint has spawned a
new concept and set of business practices termed supplier relationship
management (SRM).
• The mission of SRM is to activate the real-time synchronization of the
requirements of buyers with channel supplier capabilities.
• The goal is a customized, unique buying experience while
simultaneously pursuing cost reduction and superior quality.
• SRM seeks to fuse supplier management functions into an efficient,
seamless process driven by relationships founded on trust, shared risk,
and mutual benefit.
 Channel Alignment
• The structure of a supply chain is composed of its supply and
delivery nodes and the links connecting them.
• Channel partners created trading relationships one partner at a
time without consideration of the actual extended chain of
customers and suppliers constituting the entire supply chain
ecosystem.
• Maintaining a strategy of trading partner dyads as the supply chain
expands, risks decay of cost management objectives, leveraging
resource synergies, and maintaining overall marketplace
competitiveness.
 Integrative Technologies
• The convergence of integrative information technologies and SCM
constitutes a key theme in the evolution of SCM.
• Competitive global marketplace having the best product or service is
simply not enough: now, having the best information has become the
decisive differentiator between market leaders and followers.
• Supply channel transparency consists of a single view of the supply
chain and requires information technologies that facilitate the
collection, processing, access, and manipulation of robust repositories
of data necessary for determining optimal supply chain design
configurations.
• Information networks also provide companies with the necessary
insight so that channel resources and competencies can be
synchronized to provide superior customer service.
 Operations Excellence
• Operations excellence compels every firm in the channel network
to optimize both their own performance and, by extension, the
performance of the entire supply chain.
• By acting as a single integrated team, the supply chain has access
to an expanding range of processes and competencies individual
companies would be incapable of achieving acting on their own.
• Integrated supply chains have a better chance to increase
performance by standardizing processes and leveraging shared
information technologies.
 Collaboration
• The keystone of SCM is found in the willingness of
supply channel partners to engage in and
constantly enhance collaborative relationships with
each other.
• On the lowest level, it is internally-focused on the
achievement of local objectives. On the next level,
SCM collaboration consists in linking inter-channel
partner logistics functions to optimize channel
operations.
• In level three, channel partners seek to develop
collaborative strategies to link core competencies
and resources to generate joint product and service
value for the supply chain’s customers.
• In level four, SCM leverages web-based
interoperability technologies to create a
completely integrated supply chain focused on
executing a common business strategy by
presenting customers with a seamless supply
engine.
 ASSIGNMENT
1. Each student is searching the internet for a company
engaged in the logistics business.
2. Create an assignment in power point that contains:
a. Task Cover
b. Pages 1 - 7 contain: Logistics service delivery provided
by the company and complete with pictures.
c. Page 8 contains a bibliography or website link of the
source used.