Question

Describe the following: a) distribution channels, b) logistics, and c) supply chain management. What are the common functions they all accomplish? What are the main differences?

Answer 1

a) Distribution channels comprise of the intermediaries through which the products of a company must pass through before it finally reaches the customers. Various distribution channels may include one or more than one out of wholesllers, distributors and retailers. Nowadays, in case of E-commerce companies, direct distribution from manufacturer to end customer is done through internet medium.

b) Logistics indicates the process of movement of goods from the suppliers to manufacturers and finally to the end customers. Logistics is the planning, management and execution of flow and transportation of the goods and products. The customer requirements must be met in a efficient, time bound and cost effective manner.

c) Supply chain management is the management of the entire network, processes, transformation and flow of the goods and services from the raw material stage to the finished product stage until it is consumed. It is an all inclusive gamut of activities that aims at streamlining the business, reducing wastes, increasing customer satisfaction and gain competitive advantage.

Common functions which all three accomplish:

• Reducing cost of operations
• Increasing customer satisfaction
• Streamlining processes
• Improving profit margins

Differences between Distribution channels, logistics and supply chain management:

• Distribution channels deal with mode of distribution, Logistics deal with the process of distribution whereas Supply chain management includes both the activities.
• The goals of distribution channels and logistics may change with time and place, however the ultimate goals of supply chain management remains same.