What is distribution management?
Distribution Management control is the process of tracking the progress of completed items from a manufacturer or vendor to the ultimate user.
There are several activities and processes involved during this time, including warehousing, inventory management, warehouse picking and packing, and last-mile delivery.
Distribution management, when done correctly, can help to reduce the order fulfillment time, inventory turnover rate, profit margins, supply chain agility, and ultimate customer satisfaction.
How it works for ecommerce
When it comes to managing the flow of products through the supply chain, there are a lot of moving parts. And each stage in distribution management is vital.
Let’s look at what activities occur throughout the process now that you know the key players in ecommerce inventory movement from one stage to the next.
1. Inventory receiving
Ecommerce inventory is stored when it arrives at a warehouse or fulfillment center.
A thorough inventory receiving procedure (also known as “warehouse receiving”) is essential for setting up your supply chain for cost-effective, efficient inventory management and fulfillment later in the fulfillment process.
It’s also crucial to double-check inventory counts at this time to ensure that what was delivered from the manufacturer is identical to what was purchased.
You risk poor inventory accuracy or lost inventory if you don’t have a good inventory receiving process in place. This can affect profit margins and inventory reporting.
2. Warehouse management
After the inventory has been collected, it must be tracked to ensure that there is enough stock available to meet demand.
Warehouse management entails monitoring and storing inventory, as well as training and managing a warehouse staff on how to best track inventory throughout the warehouse.
A warehouse management system (WMS), or software designed particularly to optimize warehouse procedures, such as warehouse inventory management, is becoming more popular. As a result, the need for manual labor is reduced, allowing warehousing staff to focus on speed without sacrificing accuracy.
3. Packing orders for Distribution Management
Once all goods for a single order have been chosen from the shelves, the packing process begins.
Packing isn’t as simple as you might think. It necessitates loading the proper items into the appropriate-sized box with the most cost-effective packaging methods to ensure that they arrive in good condition to their ultimate destination.
Packing should always keep an order within the fewest number of boxes (minimizing split shipments) and utilize the proper sort of packing material(s) for each product, to minimize shipping costs and maintain order accuracy.
4. Shipping
In the final stage, packed orders are distributed to their ultimate destinations. It’s often the end user for DTC businesses, but some provide B2B ecommerce services. In that scenario, some order (often bigger shipments with many units) is sent to another business instead of being returned to customers.
Ecommerce shipping is an important stage in the supply chain because it affects client happiness. In fact, when buying online, 43% of customers prioritize quick and dependable delivery.
Having a good shipping strategy ensures that you can offer competitive, cost-effective shipping choices to your consumers.
There are a variety of approaches to manage delivery and how quickly you send orders, such as:
- To enable low-cost 2-day delivery, you’ll need to store your inventory in several locations
- Working with a variety of large and minor parcel carriers
- Customers with a cart value of at least $50 who want free shipping will receive it