Common Challenges in Distribution & Logistics

By: Joseph Evans

Distribution and logistics are two entities that rely on each other, they feed each other, and one would not exist without the other. Distribution refers to all movement and handling of a product through a value chain, from supplier to point-of-sale.  Logistics is one aspect of the distribution process and refers to the transportation, location, and procurement of goods. Distribution and logistical problems get larger and more complex as the amount of product needing to move increases. Moving 20 lbs. of apples across town to the grocery is no problem but moving 20,000 tons of apples to 300 grocery stores across the country is when supply chain optimization and removing obstacles become very important.

Shipping yard

Retailer Demand

As stores expand their product line-up, they have begun to tighten their delivery deadlines. They have made fines for missing a delivery window larger and the target smaller. These companies are also fining their distributors for inaccurate product information. Incurring fines from customers cuts into profits and hurts the distributor in the long run, making process optimization vital to the long-term success of the company.

Growth of Multichannel Distribution

It might be more efficient to run a single channel warehouse, but in today’s market, it’s limiting. Customers have more ways to buy from your company so planning distribution accordingly becomes important. The rise of ecommerce and other channels has companies looking for new design ideas in order to leverage distribution space. It’s becoming more common to house wholesale, retail, and ecommerce in the same facility. Companies should take advantage of the opportunity to reduce overall inventory levels and funnel it through each channel when needed.

Forklift at a warehouse

Inventory Accuracy

Having an accurate inventory count available always is important for forecasting and filling orders. If you don’t know what’s in house, you can’t send it out to customers. A recent report found that 48% of small business don’t track inventory at all or do it manually. The first thing to do in this case is automate the inventory systems. An automated inventory system eliminates human error and has analytical tools with detailed product history.

Tackling These Challenges

Feeding America is a non-profit organization with the goal of eliminating hunger in America through a network of food banks and community engagement. When fresh produce became available there would be a bidding process so food banks could bid on what was available. Tracking the offers and bids was done on spreadsheets and was time consuming. With the new web portal developed by alligatortek, donors can submit offers and the staff can then quickly review the offer and decide which food backs to send it to. The real time reporting has cut the process time significantly.

 


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