635-5-1 Distribution Channel
In what ways is the distribution channel an important part of logistical and supply chain management? Provide at least one example of a distribution channel in logistics and supply chain management.
The vital role that a distribution channel plays in supply chain and logistics cannot go unnoticed. It is one of the essential components that link the business to its suppliers and consumers. Examples of distribution channels include dealers, retail traders, wholesalers, and consultants. An efficient distribution channel supports the economic utility of time and space by ensuring that consumers receive at the time and place they want (Grant & Trautrims, 2017).
An efficient distribution channel aids in customer satisfaction through prompt delivery of required commodities. This avoids customer complaints as well as strengthening consumer loyalty and confidence in the firm (Weeney, Grant & Mangan, 2018).
Secondly, an efficient distribution channel brings stability I the prices of a firm’s commodities. Goods are delivered in time hence preventing increased costs that arise during scarcity in supply of commodities as a result delayed delivery. Thirdly, the ability of the distribution channel to deliver goods in time ensures a wide variety of goods in the market. This leads to increased competition which forces producers to produce quality products for them to remain relevant in the market (Weeney, Grant & Mangan, 2018).
Also, distribution channels aid in timely delivery of raw materials. Commodities are therefore manufactured in time thus bring an equilibrium economic condition that is favorable for business growth.
Distribution channels play a significant role in the economy. They link firms to consumers and suppliers as well as ensuring that consumer needs are met promptly. Efficient distribution channel prevents unfavorable economic conditions by ensuring a balanced interaction of demand and supply in the economy.
Grant, D. B., Wong, C. Y., & Trautrims, A. (2017). Sustainable logistics and supply chain management Kogan Page.
Weeney, E., Grant, D. B., & Mangan, D. J. (2018). Strategic adoption of logistics and supply chain management. International Journal of Operations & Production Management, 38(3), 852-873. Doi: 10.1108/IJOPM-05-2016-0258