Physical Distribution & Supply Chain Management

Competence in logistics and transportation is an important component to the overall export process. Assigning responsibility to a staff member to evaluate the various weights and measurements of potential shipments in different modes of transport is a good place to start understanding the quoting and shipping process.
Analyzing the different services of freight forwarders, airlines, steamship lines, inland carriers, packing companies and marine cargo insurance providers is a task which should benefit the company greatly, whether it be for the first-time exporter or one that is considering expansion into the overseas marketplace. Working together with export assistance agencies and export service providers will aid the progress and profits of the exporter.

Physical Distribution & Export Strategy

Export distribution involves the physical act of moving products and is an integral part of international trade.
While many aspects of international marketing allow an exporter to be creative and unique, there is little room for error in export mechanics. The role of service providers in international logistics and transportation cannot be underestimated. Exporters should not operate in the “Do It Yourself” mode on these highly volatile and crucial procedures. It is best to leave this process to the experts, who make their living by learning the most efficient and ethical transportation methods available.
Numerous variables impact shipment logistics and distribution. Transportation modes impact the total cost of the goods, which may fluctuate between nations in regards to requirements on packaging, labeling, transit times, perishability, and damage or loss of cargo. Mistakes in this process lead to increased labor costs. Many hours of work can go into solving problems that could have been avoided by taking the time to learn the process in the first place. Familiarizing yourself with how a market imports its goods and how the goods reach the consumer before actively marketing is a gesture that potential buyers appreciate.

Parties to the International Shipping Transaction

Often a number of businesses have temporary control over cargo and therefore have responsibility for its processing, handling, integrity and/or movement. The following parties are often involved in an export shipment:
• Exporter
• Freight Forwarder
• Non-Vessel Operating Common Carrier (NVOCC)
• Inland Carrier
• Terminal Operators
• Ocean Carrier
• Air Carrier
• Customs Inspectors
• Customs Brokers
Note: In order to learn the international trade terms used in this and other sections, you may wish to access the export glossary from the USDA, Foreign Agricultural Service section on "Recipe for Export Success: A Brief Tutorial for New Exporters."

Physical distribution management.

In the next video you can see how is the process inside a factory of a delivery.

Supply chain management: The concept

Obviously, supply chain management is about managing the supply chain. So, what is a supply chain and why does it need to be managed?

In simple terms, a supply chain is the link between a firm or business and its suppliers and customers. And supply chain management is about managing the activities which support the movement of a product from a firm's supplier to a firm's customers, as in

In a competitive environment a firm must be concerned about the efficient management of its immediate supply chain for both its survival and profitability. In the simple example of Figure 1.1, the firm buys from the supplier at an agreed price, and sells it to the customer at a competitive price that will produce profits for the business. In this model the firm adds value to the product by making it available to the customer in the way they desire it, when they desire it and at a place they desire it. These value adding activities are the primary business functions of the firm, and there are costs associated with these. The market price which the customer is willing to pay will depend on the value of the product as perceived by the customer; and if this price does not cover all the costs associated with procurement and value addition plus a reasonable profit for the firm, the business then obviously has no prospect of surviving in the long run.

This simple model of 'supplier - firm - customer' makes two interrelated concepts clear: the value of the product to the customer, which determines price and customer retention; and the costs of managing the supply chain, which also affect price and customer retention. These are the areas of main focus in supply chain management.

This simple model can help us to understand the basic concepts associated with supply chain management, but business organisation is rarely this simple. This model has to be extended to cover practical business situations which are complex and involve multiple supply chains linked to produce a final product which is purchased by the end consumer. from Stallkamp 1999)

Supply chain management, as a business discipline, attempts to look at the challenges faced by modern businesses in the management of supplies, manufacturing, inventory and distribution. The aim of SCM is to enable the firm to remain competitive by effective management of activities related with supply chain management.

Supply chain management: The drivers

SCM is about integrating business processes to gain competitive advantage while providing customers with superior value. This integration of customer focus with business processes is evidence of the emergence of supply chain management as a core business discipline aligned with corporate strategies. We will explore the key drivers of SCM and how they have fashioned this new business model.
Competition and supply chain management
Competition in the business world is more intense than it was anytime in the past. Globalisation has opened up world markets, and companies with traditional approaches have found it extremely difficult to survive in this new world. ( See the examples below.)

Dell Computer

Founded on a vision of customer-responsive order fulfilment, has seen its stock price mushroom nearly 200 fold since 1990. 'We already have a quick- ship plan for large customers where we can deliver a machine within 48 hours of an order,' Michael Dell explains. ( Fortune, Sept.8 1997)

This example demonstrates why supply chain management has become a core business concept and how competitive market forces are shaping the design and management of supply chains.

BLIBLIOGRAPHY

• Metz , JP (1998, 1 January) 'Demystifying supply chain management', Supply Chain Management Review. [13 pages]
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  Bovet and Sheffi (1998) have identified seven key drivers of future supply chain management. These are in Figure 1.9.
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  Bovet, D & Sheffi, Y (1998, 1 April) 'The brave new world of supply chain management', Supply Chain Management Review.
  http://www.youtube.com/watch?v=NudCAtI2bBE&NR=1
  
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  http://www.marcbowles.com/courses/adv_dip/module4/module1/m1one1.htm‏
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  http://www.marcbowles.com/courses/adv_dip/module4/module1/m1one1.htm‏
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