The distribution deals with all tasks and activities which ensure that the product reaches the customer. Today, customers increasingly expect shorter delivery times. So who ordered on eBay or Zalando this afternoon expects that DHL or the corresponding package delivery service deliver the goods the next day and at low shipping costs. The fact that there is a time-consuming and strenuous distribution logistics infected, many are not aware of.


A look into the workings at the shipping agents illustrates the hassle that lie behind such a package delivery. Once the customer has ordered shoes, these are packed in the shipping warehouse and ready for dispatch. In general, the finished packages will be picked up from the warehouse in the afternoon. Then the journey begins. All vans deliver to the cross docking centre and will be unloaded by the employees. Now everything has to happen very quickly. The packages are sorted by destination areas and loaded onto the corresponding van or truck to start the next process step. The whole thing is done in a short time, so the parcel will reach at the same day the distribution centre in the destination area. After a second unloading, the packages will be sorted by delivery tours and will be distributed to your house within the next day.


Distribution logistics has to face it's own and specific problems and issues. For example, the question if an industrial company takes over the supply of the pint of sale stores or not. In this particular case the distribution logistics from a industry company becomes a procurement logistics of a trading company. So instead of being supplied the trading company takes responsibility for transporting and traveling collections so as again to be able to make their own optimizations, such as the coordinated delivery of its stores by such as waiting periods and thus reduce costs.


The question of suppling strategy meets the company in another respect. Differences will also result from single-stage or two-stage transport. Let's talk about a supply of company-owned stores by the production.

The main functions of distribution logistics are:

  • Storage: Distribution logistics involves the storage of products in warehouses or distribution centers to ensure availability for shipping.
  • Inventory Management: Managing inventory to ensure that there are enough products available to meet customer demands while minimizing storage costs.
  • Order Processing: Processing customer orders, including picking products, packaging, and shipping.
  • Transport Management: Organizing and managing transportation methods to move products from warehouses to customers or retail locations.
  • Route Optimization: Determining the best routes and transportation methods to ensure efficient and cost-effective deliveries.
  • Delivery Time Management: Meeting delivery deadlines and ensuring on-time delivery to customers.
  • Returns Management: Handling customer returns and product reversals.
  • Packaging and Labeling: Preparing products for shipping, including packaging and labeling as per requirements.
  • Warehouse Location Planning: Determining locations for warehouses and distribution centers to ensure proximity to target markets.
  • Information Management: Capturing and processing data for order tracking, inventory, and deliveries optimization of distribution processes.

These functions are crucial to ensuring that products are delivered efficiently and cost-effectively to customers, contributing to customer satisfaction and a company's competitiveness.

In the single-stage case, the company supplies its stores directly depending on the need in the store. The goods will be held at the central warehouse and the truck supplies as needed. Here you have a problem. Since the supply is closely linked to the needs of the branches, it can lead to not optimally utilized trucks and, for example, half full drives to the store, not to mention the way back. As a result, however, this is only one transporting stage so the company is saving fixed costs for additional buildings, staff and equipment. The savings in stock level thus leads to additional costs due to increased transportation costs. Here you can see the classic trade-off of logistics.


In the two-stage case, the supply of stores is not directly to the stores but from a regional interim warehouse as a second stage. Shorter replenishment tours are the consequence that the goods are maintained in a decentralized warehouse and close to the store. Now the risk of misallocation occurs, so that the correct goods are stored in the wrong regional warehouses. Benefits arise from the decoupling of demand and supply, as the supply of regional stock can be done on a regular basis with fully loaded trucks. Here are offsets by the costs of several stock levels and the associated overhead of a better utilization of transport capacity. The trade-off is basically the same, except that the cost allocation in this case is different.