Logistics

or

Physical Distribution (PD)

the transporting, storing, and handling of goods in ways that match target customers' needs with a firm's marketing mix

- both within individual firms and along a channel of distribution

Customer Service Level

how rapidly and dependably a firm can deliver what they, the customers, want

Physical Distribution (PD) Concept

says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution

- both lower costs and better service help to increase customer service

Total Cost Approach

involves evaluating each possible PD system and identifying all of the costs of each alternative

Supply Chain

the complete set of firms and facilities and logistics activities that are invloved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers

Electronic Data Interchange (EDI)

an approach that puts information in a standardized format easily shared between different computer systems

- replaces purchase orders, shipping reports, and other paper documents

Transporting

the marketing function of moving goods

- makes products available when and where they need to be - at a cost

Containerization

grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination

- this protects the products and simplifies handling during shipping

- some of these containers are as large as truck bodies

Piggyback Service

loading truck trailers or flatbed trailers carrying containers on rail-cars to provide both speed and flexibility

- railroads now pick up truck trailers at the producer's locaiton, load them onto specially designed rail flatcars, and haul them as close to the customer as rail lines run

Storing

the marketing function of holding goods so they're available when they're needed

- Inventoryis the amount of goods being stored

Private Warehouses

are storing facilities owned or leased by companies for their own use

- used when a large volume of goods must be stored regularly

Public Warehouses

are independent storing facilities

- can provide all the services that a company's own warehouse can provide

- a company might choose a public warehouse if it doesn't have a regular need for space (or if business is seasonal)

Distribution Center

a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs

- faster inventory turnover and easier bulk-breaking reduce the cost of carrying inventory

- widely used by firms at all channel levels