What are the differences between distribution and logistics?

Posted by Danny | February 14, 2019 | Uncategorized

The two terms are often used interchangeably despite the fact that they mean different things. From the surface, they could both suggest an imagery movement of goods. Those who have worked in supply chain know there is a clear difference when talking about distribution and logistics. Which begs the question, are there any commonalities between the two terms? Before we can answer this question, we need to look at each term individually and their meaning. The terms can overlap depending on the environment.

What is Distribution?

The term distribution has a myriad of meanings outside the scope of supply chain management. It can be referred to as the movement of goods from the manufacturer to the supplier. There are numerous processes or activities involved in distribution. The processes could include packing, warehousing, inventory, logistics, and supply chain.

What is Logistics?

This refers to the management of the flow of goods or services from the point of origin to the final consumption destination. When it involves physical items, there is the integration of information, flow, production, packing, warehousing, and security considerations. The logistics will begin at the manufacturing stage and will continue through the distribution and delivery of the goods. For logistics to be successful, there is a need for having automated inventory management in place.

Comparing Logistics and Distribution

Logistics deals with the overall strategy when it comes to the movement of goods from the point of manufacturer to when it reaches the final consumer. Distribution could be seen as a subset for logistics. The main aim of distribution is to make sure that the goods are being delivered in a timely fashion without delays or huge expenses.

Logistics is meant to improve the distribution channels that are already in place. It is important to note that the logistics will begin when the goods are still raw materials and will continue through the physical transportation stage up to when it is delivered to its final destination.

Having looked at the differences between distribution and logistics, the next logical thing would be to look for a trucking company. There are different services offered by a trucking company and some of them include:

Air Freight Services:

This is a typical duty that should be provided by a trucking company. People prefer air services because they’re fast and they also have high density. This result in less space taken up in the plane. This option might not be cost-effective if you’re moving volumes and you may be required to use special planes for the same.

Full truckload:

With this kind of service, the goods are expected to fill the trailer. This is the best option for a company that deals with bulk goods. You get discounted rates depending on the volume that is being transported. There are no drop-offs along the way since all the goods in the trailer are heading to one destination.

Less than full truckload:

This option is recommended for companies or individuals that don’t necessarily need a full trailer. They could be anticipating low volumes and there is no need for rushed deliveries. Most trucking companies offer this service as an alternative for those who are looking for cost-effective means of distribution. The remaining space in the truck can be occupied by goods from other companies being distributed on the same route.

Partial truckload:

This option involves the delivery of fewer goods. Sensitive goods could be transported using the partial truckload option. This size of the truck is usually preferred when transporting medium size goods.

 

Factors to consider when choosing a trucking company

Hiring a trucking company can be a challenging endeavour. There are logistical considerations involved that could prove cumbersome even to the seasoned business owner. Before you can pick any trucking company, here some of the factors that you need to put into consideration.

Related: How to Choose the Right Shipping Carrier?

Insurance and License

This should be the number one priority when choosing a trucking company. Anything can happen along the way which could result in lost or damaged goods. Having insurance provides a safety net for any unforeseen eventualities. The freight company needs to be licensed to operate the services that it is providing. In case there is a need for confirmation, a letter or a phone call to the relevant authorities can set things straight.

References

This is another easy way of gauging the credibility of a trucking company. A company that has been operational for a number of years has customers that are satisfied with the services that they provide. The trucking company should be willing to provide references on their work and clientele.

Technology

Technology could come in so many facets. A good trucking company should be able to provide tracking capabilities for their customers. Information about the area of transportation should also be readily available. GPS is currently the most popular tracking technology in the market today and should be the bare minimum that is provided by a trucking company.

Industry Expertise

Depending on the type of business, there are trucking companies that are preferred over the others. One should look for a company that is an industry leader in their field. The company could be specializing in offering both local and international distribution of goods. It should be able to demonstrate a strong grasp and knowledge of the logistics involved in the industry that is operating in. A big company should be outsourcing components like distribution and logistics while focusing on the product.

Experience

Delivering products on time is crucial in the success of any business. Ideally, one should be looking for a trucking company that is experienced in handling all kinds of cargo. They should also have a strong distribution network in place so that the goods arrive on time. The company should also have a reputable tracking system in place so that the goods can be tracked.

Cost

This is always going to be a big consideration when looking for a trucking company. The cost could spiral out of control if a company is transporting large volumes of goods. There is fierce competition among freight companies and there will always be one that offers the quality and affordable rates that are suited to a business needs depending on the size. For a business, it is important to look for a trucking company that fits your budget and also doesn’t compromise on quality.

Customization

The logistics are going to vary from one company to another and a good trucking provider should well aware of this challenge. They should be able to offer custom solutions depending on the size of goods being transported and the logistical considerations involved. A company’s freight requirement should among the top considerations when looking for a trucking company,

Growth Potential

A freight provider should be able to offer solutions on how to manage the cost of transportation. Even as a business grows, they should be robust enough to offer solutions to the dynamic challenges that come with logistics. Business growth means exploring new markets and territories.

Without a good distribution in place, it will be hard keeping up with competition and customer satisfaction. The growth potential is one area that should never be overlooked in any business that depends on the distribution of goods.

Customer Service

Logistics and transportation can be a nightmare. A business can incur losses if the goods are not delivered on time. A good trucking company should provide exceptional customer service so that a business doesn’t have to worry about logistics. They should be relied upon to deliver timely communication on transportation and make customers aware if there are going to be delayed.

Conclusion

For a business that is just starting out, it is important to understand the difference between distribution and logistics. A company may be responsible for the logistic component of the supply chain but distribution could be out of their control. The distribution solution that is chosen should be able to seamlessly integrate with the logistic system in place.

Distribution and logistics could partly be seen as synonymous, at least on a higher scale. Even so, logistics is more encompassing and covers a lot more compared to a distribution center.

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