Physical Distribution Management in Brewery Industries

Physical Distribution Management in Brewery Industries

Physical Distribution Management – Much have been said and hearted from both foreign and local authors about physical distribution and logistics in companies.  Physical distribution is a very important unit in every production company or industry, Nigerian Breweries inclusive.The availability of raw materials and distribution of finished products to the intimate users at the right time, quality, quantity, condition, place and at the least price is very necessary so long as marketing concept is concerned which is the most acceptable.  Philosophy now. This is what really stirred the researcher at this level to review related materials in affirmation to this area of profession.

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AGU (1999) in his research study on the physical distribution of Nigerian breweries company products in Enugu metropolis revealed that customers diverts to other products because of inconsistency in the provision of the product, some brands of their products suffers the out of stock syndrome, he also commented on the price instability.  The researcher selected 50 persons each from the dealers and consumes of the product; he concluded that the company has no functional distribution section or that the company has no physical distribution department.

Commendation is given to the researcher for the involvement of consumers who are the final consumers in the survey, meanwhile, there was no survey of the Nigerian Breweries officials.  The researcher was biased because he drew his conclusions from just the findings from the customers without bothering to sample the company officials and get their own view or opinion about the research, also the selected sample size of 100 customers is not a good representation and emphasis layed only on distributing of finished goods ignoring procuring of raw materials.

Problems of physical distribution and logistics of Brewery industries (Onuzunuike 1995) was just on once brewery in Enugu.  His findings revealed that constant breakdown of vehicles and high  cost of maintenance are among the major problems facing companies in distributing their products.  The bad nature or deplorable conditions of roils formed part of his findings.  These findings made the researcher to conclude that lack of vehicles and the inability to maintain the available ones is not encouraging and detrimental to the organization and forms the major barrier of physical distribution.  The researcher drew conclusion from the information obtained after sampling a total member of 200 officials of the company and 50 customers.  He is commended for his efforts in reaching both producers and users of the product for information. however the researcher should not have concluded that non-availability of vehicles and inability to maintain available ones is the major problem.  This is because only one company was surveyed and the findings cannot be generalized and may not be applicable to other breweries.

According to Shola (1996) in his article “Depot location” stated that marketing logistics system provides the facilities for stocking a company’s product to balance the demand and supply and that it is to be half important in the design of a system of moving product from manufacturers to the consumers.  This is to avoid the troubles of complexity in the distribution management.  He concluded by suggesting the solving of depot location problem should be based on distance from factory to proposed depot and that this is so because location is always seen as a function of distance instead of time.  The researcher agrees that depot centers are necessary for quicker and better distribution, the choice of location should also consider distance, the concentration of consumers and retailers as well as the characteristics of the products.

Ahn (1994) stated in his article “How to plan effective and efficient distribution”, that the need for efficient distribution within the system and the growing need for proper logistics have become very necessary, if a company is to meet budget requirements, factors that needs to be considered to achieve this includes position audit i.e study of the strength and weakness, environmental audit, i.e study of the environment in which the firms operates, such as social, political, economics, technology.  According to her, product distribution consolidates the marketing selling plans.  It is ideal to forecast distribution as means of meeting the underlining objectives of the marketing systems and at same time build up cost of ensuring efficient distribution. Logistics for casting distribution revolves round the need to meet an appropriate number of consumers, hence, while identifying the need to feed the outlets, it is important to identify the number of people you desire to serve in each locality where your depot operates, this aids production, marketing and financial plans and ensures even spread of available products.   The researcher agreed that there is necessity for efficient and effective distribution.  The budget should be fairly flexible to accommodate unforeseen charges that night occur and all the major efficient distribution activities must be conversed to ensure success.

Kolter (1996 P5 77) Physical distribution comprises the tasks involved in planning, implementation and controlling of the physical flow of materials and final goods from the point of origin to points of use to meet the needs of consumers at a profit.  He also indicated that many companies states their physical distribution objectives as getting the right goods to the right places at the right time for the least cost. But he argued that since physical distribution activities are highly interrelated, decision must be made on a total system basis.  The starting point for designing the physical distribution system is to study what the competitors are offering, what customers are interested in, this includes on time delivery supplies, willingness to meet customer emergency needs, careful handling merchandise, supplier willingness to accept defective goods and re-supply of the goods and supplier willingness to carryout inventory for the customer.

Marcarthy (1994 P.55) also stated that physical distribution is the process of transporting and sorting of physical goods within individual firms along channel systems.  However, I will like to define physical distribution as all activities required physically to move raw materials from point of purchase to production point and finished goods from manufacture or producer to final consumers. Under traditional thinking, physical distribution starts with moving goods at plants to final consumers but under marketing thinking, physical distribution starts with market or customer considerations to raw materials needs and source to production point and final consumers.

Having considered the various definitions of physical distribution, I shall appreciate the subject matter physical distribution management by looking at some definition given by different authors.

Bawersox (1998 P.575) stated that physical distribution management is the term describing the integration of two or more activities for the purpose of planning, implementing and controlling the efficient flow of raw materials in  process inventory and finished goods from point of origin to point of consumption.

Robert 91991 P. 478) in his own contribution stated that physical distribution management involves the integration of the six activities of physical distribution namely transportation, warehousing, inventory controls, material handling, order processing and protective packaging into a complete distribution strategy.  Decision in transportation must be interrelated with decision in warehousing, inventory control and others physical distribution management represents a balance between product delivery capabilities and related cost.

Nwokoye (1981 P 16) stated that physical distribution or logistics is concerned with the efficient movement of raw materials from suppliers to finished goods from the end of production time to the consumers. He stated that a number of activities are involved which includes transportation, inventory, warehousing and communication.

In his own words, Carthy (1964) stated that physical distribution is the function of actual handling and moving of goods.  Physical distribution policies according to him involves major commitment of a company’s resources policies across functional lines and organizations system of a company.

Johnson and wood (1982) on their own view said that all activities involved in getting goods to the right place, at the right time, right price and quantity can be described under the term distribution.  The act of supervising or managing this massive activity is generally known as physical distribution management.

According to majero, physical distribution is the physical flow of the goods to the right location at the right time so as to achieve maximum satisfaction of middle men and netimate consumers by doing so achieving the firms sales and objectives.

Bush and Huston 91988) defined distribution as the movement of raw materials from suppliers to manufacturers and storage facilities.

Bowersox (1989 P. 12) logistical coordination is concerned with the identification of movement requirement and the establishment of plans to integrate Overall logistical operations.  Coordination is required to establish and maintain operational continuity.  Within the three areas of logistical operations, substantially, different movement circumstances exist with respect to size of order, availability of inventory and urgency of movement.  The primary function of logistical coordination is to relocate these differentials.  Logistical coordination involves planning and control of operational matters.  This is divided into four areas of managerial concern which includes product –market forecasting, order processing, operational planning and procurement of material requirement for planning.

He went further and explained that product market of a statistical estimate of further sales.  It constitutes a firms initial effort to reconcile programme and if possible postpone the anticipating process interest in a free market system.  In contrast to forecasting, order processing constitutes a “here and now” measure of marketing activity.  Order processing represents the realization of sales that were anticipated by the forecast.  The integration of order processing information into logistical coordination provides an ongoing source of reconciliation between what was anticipated and what is occurring.

The operational plan integrates what enterprises are capable of doing with what management decides to attempt in the future.  The last aspects “the materials requirement planning” is concerned with deciding what, how much, when and where to purchase inventory which ultimately will be resold to consumers or other marketing intermediaries.

Bowerson on (P.30) also added that logistics system comprises of five component which includes facility location, transportation, inventory, handling and storage.

From the forgoing, it is clear that marketing logistics system and physical distribution are generally alike and are used interchangeably and that physical distribution is far more than a positive support for marketing.  In addition to economical delivery, the level and response to customer services represent one of the elements of potential competitive superiority within the integrated marketing mix.

No matter how low or high each of these writers explained the concept of physical distribution, the researcher has summed up that there are so many different tasks that must be performed by someone in the channel, in order to manage physical distribution, the task in a particular company is dependent on size of the company.

—-This article is not complete———–This article is not complete————

This article was extracted from a Project Research Work Topic

PHYSICAL DISTRIBUTION MANAGEMENT IN BREWERY INDUSTRIES

(A CASE STUDY OF NIGERIAN BREWERIES PLC ENUGU)

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