Most managers across a range of industries have adopted the supply chain method to ensure that the distribution of outputs and the acquisition of inputs are carried out efficiently. To address all supply-related difficulties,with all issues of supply chain management (Arshinder, Arun, and Deshmukh). Continued healthy relationships among various actors create a chain that gives a company the competitive edge over its rivals. Also, it ensures the organization optimize the exploitation of its resources. However, supply chain systems should be well instituted and integrated to enhance the yield expected outcome. Thus, an effective connection and collaboration of the actors is determined by the nature of supply chain of distribution instituted in the organization.
Consumers always desire to get the best utility from the products provided by manufacturers. This satisfaction can mostly be achieved if there is an efficient way of accessing whatever they need in time. Consumers are satisfied when there is a working distribution channel to link the buyers to sellers. Therefore, the choice of the canal to be used will significantly depend on some factors such as nature of goods to be transported, channels used by competitors, nature of the market, and demand patterns for the product. It is, therefore, upon every organization to appropriately integrate and co-ordinate well the two systems (Arshinder et al). For instance, the firm should integrate and coordinate supply chain practices and distribution channel to enhance attainment of stellar performance.
1.1 Relevance of the topic
Over an extended period, companies have not unfolded many needs of apportionment in the supply chain. Supply chain has been handled as a separate entity, a reason that has caused many a continuous decline in operational efficiency. For example, most managers have been ignorant about supply chain management hence they have failed to integrate distribution in the operational plan. However, the full realization of how inevitable distribution is to supply chain that this paper suggests distinct roles played by the distribution as far as the supply chain is concerned. The report has focused on various distribution channels adopted by sawmill industry and how they have been incorporated in the supply chain.
1.2. The structure of the research report.
The framework of this research is in response to the requirements of the class assignment together with the review of the previous work in a research unit. As a continuation of the introduction of a research report, the report shall analyze various theories and frameworks of distribution channels after which a conclusion will be drawn basing on the assessed tenets.
2. Theory
In the sub-sections below, different theories and frameworks are discussed which are very crucial for this research.
2.1 Definition of terms
Distribution refers to activities that enhance the transfer of materials or goods from one commercial unit to another by an organization. It can also be defined as shifting of a load from the site of production to the demand point. Furthermore, it is described as the steps undertaken to transfer and store goods from the point of supply to that of demand in the supply chain system.
It is a component of supply chain management that focuses on how and when to get raw materials, intermediate products, and finished goods from their respective origins to their destinations. It may also be described as the process that a product takes before it reaches the final consumer from the producer. Distribution channel is made of a manufacturer and various intermediaries who act as a link between the productions to the consumption point.
Supply chain means a series of activities and organizations that the materials move through from their initial point to the consumer's site.
It refers to the active control of activities and relationships within supply chain to maximize customer value alongside achieving a competitive edge.
2.2 Marketing channels.
They refer to the flows in economy originating from the producer of raw materials, across all levels of production, to the distribution then finally to the end user. Therefore, there is a need for establishing a strong relationship with the suppliers and intermediaries for successful production of goods and services. Marketing channel is created from the relationships that are made up of both upstream and downstream partners to form delivery value networks that are efficient in value maximization (Chen et al).
Marketing channels are fundamental since they ensure efficiency in the provision of services to the consumers. In the current economics, this concept is widely viewed as a combination of businesses that have collaborated to facilitate exchange during the process of marketing from producers to consumers. There is need to understand specific needs of customers, segments and establish correct channels that ought to be employed for effective supply chain management. It is, therefore, useful to look at some of the significance of these channels in supply chain directly as follows:
2.2.1 Offering salesmanship
The system provides a pivotal role of sales agents. They are engaged in word of mouth selling by ensuring that there is awareness on the market about the product. Salesmanship inform the users of the product and at the same time give feedback to the manufacturers hence a cycle is created in the economy.
2.2.2 Increases efficiency in distribution.
The intermediaries reduce the gap between the suppliers and buyers thus ensuring efficiency. They achieve it by cutting down the number of transactions between the trading parties which further reduce the operation costs. The absence of channels would affect the final price of the product due to additional expenses.
2.2.3 Increases performance.
The role is achieved through the formation of external integration which ensures sharing of relevant information regarding clients within the industry. Although this role is vital, it can only be realized if there are complete trust, commitment and mutual dependence among collaborating actors. The partners are also able to formulate shared strategies that will make them stronger than their opponents in the same industry. Having a competitive advantage will make the organizations make significant profits.
2.2.4 Minimize costs
An active transportation network starts with end-to-end network visibility that enables the organization to centralize all its production activities within the system. This centralization allows the management to reduce cost areas which could have absorbed unnecessary expenses without affecting the value availed to the customers. An integration of both transport and supply chain ensures proper monitoring and management of uncertainties that might occur in inventory levels to keep them as low as possible (Siurdyban and Charles). The initiative helps to minimize or further avoid storage risks and other perils related to the handling of stock thus keeping this cost Centre as little as possible. The resultant will be the provision of value to customers at an affordable price and at the same time maximizing the profits by the business (Siurdyban and Charles).
2.2.5 Ensuring customer value
Distribution processes are associated with value addition to the product concerning efficiency at the date of delivery of goods to the customers. Most of the buyers require products to be supplied just in time (JIT) when they need them. Also, customers prefer it because they aim to avoid unnecessary costs of storage of goods and other perils related to them. Distribution, therefore, plays a significant role in ensuring that customer's need is met appropriately (Chen, Daugherty, &Roath). In other words, it completes the supply chain process. By doing this, the industry can retain its customers due to their satisfaction with service delivery.
3. Sawmill industry.
It is an industry that deals with raw materials especially in the Agriculture sector. The sector encompasses a variety of players that make up the supply chain. The industry has properly integrated distribution function in its supply chain management where it is treated as a component of production (Mukherjee and Pradeep). It has made the industry function efficiently in ensuring both processes in production and distribution is well monitored and coordinated. Furthermore, there is an adoption of IT distribution network within their supply chain to boost the efficiency in operations. Interconnection of the two helps the entity gain a competitive edge and increase its sales by ensuring efficiency in all cost centers.
Conclusion
The complexity of the modern business environment makes the supply chain management indispensable. Different firms align their operations on the supply chain as key to their success. The supply chain chosen is determined by the specific needs of individual enterprises. The incorporation of distribution in the supply chain optimizes the outputs.
However, for this to function well, the management of any industry should be highly committed primarily at the corporate level. Every firm must formulate a balanced supply chain basing on its specific needs and the nature of their customers. It is also seen that distribution is a major component of the supply chain. The analogy is based on the fact that goods are not always consumed at the production point. The ultimate goal of production is the final user. Therefore, it will be difficult for a company that neglects this crucial role of distribution as primary in its supply chain to make sense on the market. Those economic sectors that have adopted it as part of their supply chain have a positive story to tell. It is unreasonable to dispute the functions that are played by transportation in the production process.
Works Cited
Arshinder, K. Arun, K. and Deshmukh, S.G. "A review on supply chain coordination:coordination mechanisms, managing uncertainty and research directions." Supply chain coordination under uncertainty. Springer Berlin Heidelberg, 2011, pp. 39-82.
Chen, H., Daugherty, P. J. &Roath, A. S. (2009) “Defining and operationalizing supply chain process integration” Journal of Business Logistics, no. 30, 2009, pp. 63-84.
Mukherjee, K. and Pradeep K. B. "An Overview on Supply Chain Coordination (SCC) Schemes Focusing on Classification and Influencing Factors." LBS Journal of Management & Research 10(2), 2012), pp. 14-27.
Siurdyban, A, and Charles, M. "Towards intelligent supply chains: A unified framework for business process design." International Journal of Information Systems and Supply Chain Management (IJISSCM) 5(1), 2012, pp. 1-19.
