LOGISTICS AND DISTRIBUTION MANAGEMENT IN INTERNATIONAL MARKETS *Mrs.B.Chitra, M.Com., M.Phil., PGDCA **Dr.U.Vani, M.Com.,M.B.A.,PGDCA.,M.Phil.,Ph.D.

INTRODUCTION: Logistics is that part of the supply chain which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer and legal requirements. Logistics management is known by many names, the most common are as follows:

Materials Management Channel Management Distribution (or Physical Distribution) Business or Logistics Management or Supply Chain Management

SUPPLY CHAIN SYSTEMS AND VALUE: Supply chain systems configure value for those that organize the networks. Value is the additional revenue over and above the costs of building the network. Co-creating value and sharing the benefits appropriately to encourage effective participation is a key challenge for any supply system. Tony Hines defines value as follows: Ultimately it is the customer who pays the price for service delivered that confirms value and not the producer who simply adds cost until that point.

*Lecturer, Department of Commerce, PSG College of Arts and Science, Coimbatore -14. chithu.b@gmail.com, 99436-36240. **Head, Department of Commerce, PSG College of Arts and Science, Coimbatore 14. vani19balaji@gmail.com, 98943-16150.

GLOBAL SUPPLY CHAIN MANAGEMENT: Global supply chains pose challenges regarding both quantity and value. Supply and value chain trends. Globalisation. Collaboration for parts of value chain with low-cost providers. Increased cross border sourcing. Shared service centers for logistical and administrative functions. Increasingly global operations, which require increasingly global coordination and planning to achieve optimums. Complex problems involve also midsized companies to an increasing degree. THE DISTRIBUTION CHANNEL: Distribution is also a very important component of Logistics & Supply chain management. Distribution in supply chain management refers to the distribution of a good from one business to another. It can be factory to supplier, supplier to retailer, or retailer to end customer. It is defined as a chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the distribution chain or the 'channel. Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the allimportant end-user. CHANNELS: A number of alternative channels of distribution may be available:

Distributor, who sells to retailers via direct marketing, or brokers can also be used. Retailer (also called dealer or reseller), who sells to end customers. Direct Distribution (Direct Marketing), where an organization sells its products

directly to the end customer. For example in case of online purchases (Internet Marketing and E-commerce) there will be the seller and customer. For this the seller and the customer may depend on various shipping providers.

Advertisement typically used for the consumption goods.

Distribution channels may not be restricted to physical products from producer to consumer in certain sectors, since both direct and indirect channels may be used. There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors. For example, links now exist between airlines, hotels and car rental services. In addition, there has been a significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas. CHANNELS DECISIONS: Channel Sales is nothing but a chain for to market a product through different sources. Channel strategy Gravity & adventure Push and Pull strategy Product (service) Cost Consumer location

Modern channels of supply chain management:

Source : www.Google.com

MANAGEMENT OF GLOBAL LOGISTICS: As a result of globalization, the increasing international activities of many companies create new challenges for logistics. It takes a sophisticated strategy to master them.
International logistics strategies

General conditions Country-specific conditions Financial aspects THE OPTIMAL TACTIC FOR INTERNATIONAL LOGISTICS Extending logistics activities beyond a countrys borders represents something more to a company then lengthening its transport distances. For instance, it must determine how the goods are to be shipped abroad. Another question that must be addressed is whether the company itself will become active internationally or whether an external expert will be brought in. In the end, all of these questions can be answered only within the context of the companys overarching strategy for its international activities. LOGISTICS STRATEGIES AT DEGREE OF INTERNATIONALIZATION The international logistics strategy is an element of the internationalization strategy of manufacturing companies. The decision about which logistics strategy to choose can be make only within the context of the overarching internationalization strategy. Logistics activities increase as indirect exports become direct exports. They reach their peak when a company assembles products abroad or conducts some form of international production. They decrease as other types of international production are conducted and global management is performed. The international market entry of a production company is used as an example. The following table shows how an international logistics strategy can be formulated in the selection of an international strategy of a manufacturing company. INTERNATIONAL STRTEGY OF A INTERNATIONAL LOGISTICS MANUFACTURING COMPANY STRATEGY Indirect exports by a domestic company and The company does not create a special international import company international logistics system. Rather, it

manages the flow of goods and information with its national logistics system or with external logistics systems. Direct exports through licensed production The company can avoid abroad. creating an

international system. Unlike exports, though, more influence can be exerted on the suppliers services being offered abroad. This is because the supplier requirements that must be fulfilled

can be part of the license contract. Direct exports with direct investment in an As part of direct exports, the company making international logistics system the investment can operate a traditional logistics system with one or more warehouses serving inventory or distribution functions. International customers are supplied directly from the country of origin with the help of fast means of transport. International assembly or production through A typical example of international assembly is joint ventures or a companys own plant. CKD production in the automotive industry. Vehicle components of defined production steps are turned into subsets and exported to certain countries for assembly. The supply operations for CKD assembly plants places special demands on a packaging, freight costs and delivery scheduling. If the international operation consists of production being undertaken in a customers country for this one particular nation, then the company making the investments Global companies with centralized will face no new logistics problems. and Global markets with homogeneous products can lead to lower logistics unit costs if costs associated
5

decentralized management

with

the

order

processing

packaging, inventories and warehousing as a result of standardisation. communication

Source: Logistik systeme Pfoul 2004

They can also costs of

generate higher logistics unit costs if the and transport supplying world markets rise. . CONCLUSION: Logistic managers are given the task of marketing logistics as well as communicating logistics with a purpose of positioning logistics in the present competitive environment. The cutthroat competition so commonly associated with many current organizations has caused most businesses all over the world to remain proactive and any organization which ignores the importance of logistics has to blame itself. The entire purpose of logistics is defined when the logistics managers start to take marketing initiatives. Wholesalers, manufacturers, business firms and retailers are facing the urgent need to formulate implement policies pertaining to marketing. This can be done by the execution and development of executive marketing programs and strategies. The logistics executives and managers are primarily concerned with expansion of product line and product development, choice of the channels of distribution and are also concerned with the overall development of promotional programs and establishment of pricing methods and policies. Thus, it can be rightly concluded that marketing and logistics are interrelated to each other and an organization which wants to achieve equilibrium of stability and overall development must consider them as an integral part of the organization.