Definition and Differences of Distribution and Logistics
Mon, 10 Apr 2023
Distribution and logistics are two concepts that are often used in business and supply chain management. These two concepts are often used interchangeably, but in general, people often think that these two things are the same, when in fact they have clear differences.
First, let's understand the meaning of each. Distribution is the process of delivering goods or services from producers or suppliers to end customers or retailers. The distribution process involves a number of activities, including storage, packaging, shipping, handling, and order processing. The main objective of distribution is to ensure that products or services are accessible to customers easily and efficiently. The distribution process also aims to reduce costs and increase company profits by optimizing the use of available resources. In essence, distribution is a channel that can be used by producers to deliver their goods and services to consumers. Therefore, there is the term distributor who carries out this task.
Logistics is the process of planning, implementing, and controlling the flow of goods, services, and information from the source to the end consumer. Logistics involves stock management, transportation, material handling, inventory management, and freight forwarding. The main objective of logistics is to ensure that goods or services can be provided at the right time, in good condition, and at an efficient cost. The logistics process also aims to minimize costs and increase efficiency in the supply chain.
Although distribution and logistics are often used interchangeably, these two concepts have clear differences. Here are the differences:
Scope: Distribution deals with the delivery of products from the manufacturer to the consumer or retailer. Logistics, on the other hand, covers the entire process of managing the flow of goods from origin to destination.
Focus: Distribution focuses on delivering products in a timely and cost-efficient manner. Whereas logistics focuses on managing the flow of goods efficiently and effectively.
Timing: Distribution takes place after the product has been manufactured, while logistics starts from the planning stage and lasts throughout the delivery process until the goods reach the customer's hands.
Objective: Distribution is done to fulfill consumer demand and increase customer satisfaction. Meanwhile, logistics aims to ensure the efficient and effective flow of goods to meet market demand and improve operational efficiency.
Process: Distribution mainly involves the process of delivering products from one point to another, while logistics involves a wide variety of processes, including the planning, transportation, delivery, and storage of goods.
In general, both distribution and logistics are concerned with delivering goods from one place to another. However, distribution focuses more on delivering products from factories to consumers, while logistics encompasses the entire process of managing the flow of goods from origin to destination. These differences can help companies understand the importance of managing distribution and logistics processes efficiently and effectively to ensure products can be delivered to customers on time, at an efficient cost, and with guaranteed quality.