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									Channels of Distribution
 Andi Wijayanto, S.Sos., M.Si
                 12/9/2010
PENGERTIAN
 Physical  distribution channel is the term
  used to describe the method and means
  by which a product or a group of
  products are physically transferred, or
  distributed, from their point of production
  to the point at which they are made
  available to the final customer.
 Saluran Distribusi diartikan sebagai suatu
  jalur yang dilalui oleh arus barang-
  barang dari produsen ke perantara dan
  pemakai akhir (David A. Revzan)
 Organisasi dalam dan luar perusahaan
  yang terdiri atas agen, dealer,
  pedagang besar dan pengecer, yang
                        12/9/2010
Jenis dan Struktur Saluran Distribusi Fisik




  Alternative distribution channels for consumer products to retail outlets
                                         12/9/2010
Generic Channels Of Distribution




                  12/9/2010
The Alternative Channels:
   Manufacturer Direct To Retail Store.
    The manufacturer or supplier delivers direct from the
    production point to the retail store. As a general rule, this
    channel is only used when full vehicle loads are being
    delivered.

   Manufacturer Via Manufacturer's Distribution Operation To
    Retail Store.
    The manufacturer or supplier holds its products in a finished
    goods warehouse, a central distribution centre (CDC) or a
    series of regional distribution centres (RDCs). The products
    are trunked (line-hauled) in large vehicles to the sites,
    where they are stored and then broken down into
    individual orders that are delivered to retail stores on the
    supplier's retail delivery vehicles.

                                     12/9/2010
The Alternative Channels:
   Manufacturer Via Retailer Distribution Centre to Retail
    Store.
    Manufacturers supplying their products to National
    Distribution Centres (NDCs), which are sites run by the
    retail organizations. The retailers then deliver full
    vehicle loads of all the different manufacturers
    products to their own stores. Most retailers now use
    third parties to run these final delivery operations.

   Manufacturer to Wholesaler to Retail Shop.
    Wholesalers acted as the intermediaries in distribution
    chains, providing the link between the manufacturer
    and the small retailers' shops.

                                 12/9/2010
The Alternative Channels:
   Manufacturer to cash-and-carry wholesaler to retail
    shop.
    These are usually built around a wholesale organization
    and consist of small independent shops collecting their
    orders from regional wholesalers, rather than having
    them delivered. The increase in cash-and-carry facilities
    has arisen as many suppliers will not deliver direct to
    small shops because the order quantities are very small.

   Manufacturer via third-party distribution service to retail
    shop.
    A number of companies have developed a particular
    expertise in warehousing and distribution. These
    companies consist of those offering general distribution
    services as well as those that concentrate on providing a
    'specialist' service for one type of product or for one
    client company.

                                  12/9/2010
The Alternative Channels:
   Manufacturer via small parcels carrier to retail shop.
    Very similar to the previous physical distribution channel,
    these companies provide a 'specialist‘ distribution
    service where the 'product' is any small parcel. The
    competition generated by these companies has been
    quite fierce.

   Manufacturer via broker to retail shop.
    A broker is similar to a wholesaler in that it acts as
    intermediary between manufacturer and retailer. Its role
    is different, however, because it is often more
    concerned with the marketing of a series of products,
    and not really with their physical distribution. Thus, a
    broker may use third-party distributors, or it may have its
    own warehouse and delivery system. The broker can
    provide an alternative physical distribution channel.

                                   12/9/2010
Additional Channels
 For Industrial Products
   Mail order.
    Goods are ordered by catalogue, and delivered to
    the home by post or parcels carrier. The physical
    distribution channel is thus from manufacturer to mail
    order house as a conventional trunking (line-haul)
    operation, and then to the consumer's home by post
    or parcels carrier, bypassing the retail store.

   Factory direct to home.
    It can occur by direct selling methods, often as a
    result of newspaper advertising. It is also commonly
    used for one-off products that are specially made
    and do not need to be stocked in a warehouse to
    provide a particular level of service to the customer.

                                 12/9/2010
Additional Channels
For Industrial Products
   Internet and shopping from home.
    Initial physical distribution channels were similar to those used
    by mail order operations - by post and parcels carrier. The
    move to internet shopping for grocery products has led to the
    introduction of specialist home delivery distribution operations.
    These are almost all run by third-party companies. In addition,
    it is now possible to distribute some products, such as music,
    software and films, directly, computer to computer.

   Factory to factory/business to business.
    The factory-to-factory or business-to-business channel is an
    extremely important one, as it includes all of the movement of
    industrial products, of which there are very many. This may
    cover raw materials, components, part-assembled products,
    etc. Options vary according to the type and size of product
    and order, may range from full loads to small parcels, and
    may be undertaken by the manufacturers themselves or by a
    third party.
                                     12/9/2010
The Main Differences Among
 Channel Structures Are:
 The  types of intermediaries (as shown
  above);
 the number of levels of intermediaries
  (how many companies handle the
  product);
 the intensity of distribution at each level
  (ie: are all or just selective intermediaries
  used at the different levels?).

                          12/9/2010
Channel Selection
    Normally be considered by a company in the course of its distribution
    planning process to ensure that the most appropriate channel structure is
    developed:
   To make the product readily available to the market consumers at which
    it is aimed. The most important factor here is to ensure that the product is
    represented in the right type of outlet or retail store. Having identified the
    correct marketplace for the goods, the company must make certain that
    the appropriate physical distribution channel is selected to achieve this
    objective.
   To enhance the prospect of sales being made. This can be achieved in a
    number of ways. The most appropriate factors for each product or type
    of retail store will be reflected in the choice of channel. The general aims
    are to get good positions and displays in the store, and to gain the active
    support of the retail salesperson, if necessary. The product should be
    'visible, accessible and attractively displayed'. Channel choice is
    affected by this objective in a number of ways:
    - Does the deliverer arrange the merchandise in the shop?
    - Are special displays used?
    - Does the product need to be demonstrated or explained?
    - Is there a special promotion of the product?



                                            12/9/2010
CHANNEL SELECTION
   To achieve co-operation with regard to any relevant
    distribution factors. These factors may be from the
    supplier's or the receiver's point of view, and include
    minimum order sizes, unit load types, product handling
    characteristics, materials handling aids, delivery
    access (eg vehicle size) and delivery time constraints,
    etc.
   To achieve a given level of service. Once again, from
    both the supplier's and the customer's viewpoints, a
    specified level of service should be established,
    measured and maintained. The customer normally
    sees this as crucial, and relative performance in
    achieving service level requirements is often used to
    compare suppliers and may be the basis for
    subsequent buying decisions.
                                12/9/2010
CHANNEL SELECTION
 To  minimize logistics and total costs.
  Clearly, costs are very important, as they
  are reflected in the final price of the
  product. The selected channel will reflect
  a certain cost, and this cost must be
  assessed in relation to the type of
  product offered and the level of service
  required.
 To receive fast and accurate feedback
  of information. A good flow of relevant
  information is essential for the provision
  and maintenance of an efficient
  distribution service. It will include sales
  trends, inventory levels, damage reports,
                         12/9/2010
Types Of Third-party Distribution
Operation
 Dedicated (or exclusive) distribution operation. This is where a
  complete distribution operation is provided by a third-party
  company. The third party undertakes to provide the customer
  with all its distribution requirements, exclusively, on a national or
  regional basis. The resources used will include warehouses,
  distribution centres, transport fleets, managers, etc. These are
  obviously confined to very large companies.
 Multi-user (or shared-user) distribution operation. Similar to
  dedicated operations, the principal difference being that a small
  group of client companies is catered for, rather than just a single
  client. One of the characteristics of this type of service is that
  ideally the clients are all manufacturers or suppliers of goods and
  their products are all delivered to the same or similar customers,
  for example grocery products to grocery stores, supermarkets,
  catering establishments, etc. These are also known as shared user
  operations. The advantage of this approach is that expensive
  distribution costs are shared between the clients, so all parties
  enjoy the benefits.


                                      12/9/2010
Types Of Third-party Distribution
Operation
   Specialist distribution operation. These distribution
    operations are used for the storage and movement
    of products that require special facilities or services,
    and the distribution operation run by the third-party
    company is especially tailored to suit these needs.
    There are several examples, such as frozen food
    and hanging garment distribution.
   Regional multi-client distribution operation. These
    operations are provided for any number of clients
    and for most product types. They are usually
    provided by a 'general' third-party distributor that
    has probably started as a very small operation and
    grown into a regional operation concentrated in a
    specific small geographic area.

                                 12/9/2010
Types Of Third-party Distribution
  Operation
   National multi-client distribution operation. Similar to
    the previous one, a service being provided for any
    number of clients and product types. The main
    difference relates to the size of the operation. This is
    nationwide, and would include a trunking (line-haul)
    operation between the companies' sites, so that if
    necessary a client company can have a delivery
    service to anywhere in the country.
   Satellite or cross-docking operation. These are
    operations where the operator is not involved in the
    storage of any products, but is only providing a
    collect, break-bulk and delivery service. Thus, no
    unordered stocks are held, although some minor
    stockholding may occur for a limited number of
    product lines.
                                  12/9/2010
Types Of Third-party Distribution
  Operation
 Joint venture. A limited number of operations have been set up
  whereby a third-party operator and a client company form a
  separate distribution company called a joint venture. This may
  occur where a company with its own distribution operation has
  some underutilized resources. It will then link up with a third-party
  operator and offer the services on a wider basis. This has
  occurred in the hanging goods and the high-tech sectors.
 International distribution operations. These may be dedicated but
  are most likely to be multi-user, enabling a client to achieve
  international movements between sites and delivery to final
  customers over a broad international area.
 Occasional use. Many companies use third-party services on an
  occasional basis or as an aid to support their own-account
  operations. There are a number of reasons why a company might
  do this: to cover seasonal peaks in demand; to cover weekly
  demand peaks; for non-standard products that don't fit easily into
  their own operation (very small or very large products); to deliver
  to peripheral geographic areas where there is only limited
  demand for their products; or for non-standard operations
  (returns, collections, etc).
                                      12/9/2010
KEY DRIVERS FOR THIRD-PARTY
DISTRIBUTION
 Cost (capital cost, operating cost, Economies of scale, cost
  lag or cushion effect, change-over costs)
 Service (greater flexibility)
 Organizational (concentrate on their core business, oss of
  control over, the delivery operation, loss of control over the
  company’s logistical variables, lack the experience, service
  levels are poorer, balance of power is shifted, loss of
  distribution and logistics expertise, problem trying to co-
  ordinate third-party delivery service with a client
  company’s sales service, loss of direct influence at the
  point of delivery, brand integrity, the confidentiality of
  information, cultural incompatibility)
 Physical factors (greater flexibility, solve any industrial
  relations problems, drop characteristics of some products,
  Vehicle characteristics, Basic delivery systems may be
  incompatible, Some products may be incompatible)
                                  12/9/2010
REFERENSI
   Alan Rushton, Phil Croucher, & Peter Baker. 2006.
    The Handbook Of Logistics And Distribution
    Management. Kogan Page, Ltd.

   Kodrat, David Sukardi. 2009. Manajemen Distribusi
    Berbasis Teori dan Praktek. Yogyakarta: Graha
    Ilmu.

   Slide ini dapat anda download di:
    http://andiwijayanto.blog.undip.ac.id


                             12/9/2010

								
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