Materials Management Systems

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Presentation transcript:

Materials Management Systems Physical Distribution Thank you. Purchasing in the year 2000: Only 1.5 years away.

Physical Distribution Definition Physical distribution is the movement and storage of finished goods from the end of production to the customer.

Supply Chain (Logistics System) SUPPLIERS CUSTOMER DISTRIBUTION SYSTEM MANUFACTURER Manufacturing Planning and Control Physical Distribution Physical Supply DOMINANT FLOW OF PRODUCTS AND SERVICES DOMINANT FLOW OF DEMAND & DESIGN INFORMATION

Physical Distribution Definition Physical distribution is the movement and storage of finished goods from the end of production to the customer. One person’s distribution is another person’s supply.

Activities in Physical Distribution Transportation: Accounts for 30-60% of dist. Costs, adds place value Distribution Inventory: Accounts for 25-30% of cost, adds time value

Activities in Physical Distribution, continued Warehouses (distribution centers): Store inventory Materials Handling: Moves goods Protective Packaging Order Processing & Communication

Five Modes of Transportation Rail Large fixed investment, good for bulky commodities over great distance

Five Modes of Transportation Road Relatively small investment, fast, flexible service for small cargoes

Five Modes of Transportation Air High capital costs, high variable costs, high speed of service & flexibility

Five Modes of Transportation Water Low costs, fixed costs absorbed over large volumes

Five Modes of Transportation Pipeline High capital / low operating costs

Five Modes of Transportation Multi-Modal Ship – Rail – Truck Ship – Truck Rail – Truck Air – Truck Pipeline – Truck

Five Modes of Transportation Each of these 5 modes of transportation have WAYS, TERMINALS, and VEHICLES (except pipelines – no vehicles).

Logistics Information Systems Location Loading Routing Schedule Volume

Transportation Cost Elements Line-haul Pickup and delivery Terminal handling Billing and collecting

Shipping Patterns Number of customers Geographic distribution of customers Customer order size Number and location of plants and distribution centers

Roles of Packaging Identify the product Contain and protect the product Contribute to physical distribution efficiency In many applications, the environmental impact of packaging is significant.