Role of Logistics in Distribution Channel

Distribution channels help in creating time and place utilities of the product, which are impor­tant for customer satisfaction. The channel will help the firm to make the product available at the right place and channel efficiency and effectiveness is greatly dependent on the logistics operation of the firm to fulfil the demand. However, logistics will help in the movement of the product to make it available in the right quantity whenever the customer needs it. Hence, the logistics network needs to be integrated with the distribution channels of the firm. The distribution channel is the place of transaction for the firm’s products and it acts as an inter­face between the customer and the firm. However, the effectiveness of this interface is greatly dependent on the efficiency of the logistics operation to move products in the required quantity and variety with speed. In fact, logistics programs have to be tuned to the needs of channel members to reduce the loss of sales opportunity. The basic role of logistics in the distribution channel is to ensure smooth movement of products to make them available at distribution out­lets as and when they are required by the customer. This is not an easy task, since it involves a great degree of planning for material availability and movement at the lowest cost and with speed (see Figure 11.1).

Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.

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