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AN ANALYSIS OF IMPORTANCE OF PHYSICAL DISTRIBUTION IN AN ORGANIZATION

ABSTRACT

This study was carried out to examine importance of physical distribution in an organization with special references to Unilever Nig plc Lagos State. Specifically, the study aims to find out the problems of the firms encumbered transporting its products from the factory to the distribution outlets, analyze critically the physical distribution system, suggest alternative ways of minimizing the total physical distribution cost and the same time increase organizational services and find out whether the products are always available to the organization. The study employed the survey descriptive research design. A total of 30 responses were validated from the survey.  From the responses obtained and analyzed, the findings revealed that the problems encumbered by firms in  transporting its products from the factory to the distribution outlets is operational failures in the transport network, unplanned vehicular traffic and unplanned changes in the distribution route. The findings also revealed that firms have a  physical distribution system. The study further revealed that the alternative ways of minimizing the total physical distribution cost and the same time increase organizational services are Consolidate loads with like shippers, Package Product in the Distribution Center and Integrate Data from Sales and Fulfillment Systems. Lastly, the study revealed that products always available to the organization.. The study thereby recommends that in respect of poor road network, organization should construct road leading to her major market to ease distribution. Federal government should also encourage companies by improving on the road network of the country to allow free movement of goods from the factory to customers.

CHAPTER ONE

INTRODUCTION

1.1      BACK GROUND TO THE STUDY

Physical distribution involves all the activities in satisfactory and profitably moving raw materials and finished goods from points of origin to points where they satisfy customer’s needs. This singular statement underscores the importance of distribution as marketing controllable elements. One thing is to come up with a very good product and another is to ensure that it is readily available to those who need them at the required moment. Therefore, distribution performs the job of seeing to the fact that physically produced items are made available to the buyer with the least level of inconvenience.

Production is deemed not complete until the production reaches. The final or ultimate consumers at the right time, place, quality and right price. The producer of product, having carried out his market research or feasibility study to ascertain with the research data generated, and later add value to it by pricing it very well, packaging well, developing good communication system, network and tires to use other competitors. Having dramatized the above, the product has to reached the consuming public.

In view of the above, there is need for physical distribution management or logistics management to assist the producer to distribute the product accordingly. The distribution system shows a link between a producer and a consumer. In business development, price it well and promote it properly so that the consumers are aware of it and are persuaded to purchase it, another important marketing function is to make sure that the product is that a particular place, where, when, and how it is required to be, there should be need for efficient distribution system so that goods produced gets to the appropriate time and right source.

Considering the nature of an organization, the researcher considers the heterogeneous nature of the organisation which interest me in finding means to facilitate the movement of distribution to an organization. Distribution activities, are cost generating activities, the aim of physical distribution management in an organization is to minimize. Total costs of distribution and at the same time achieve high customer services there by improving the balance sheet position of an organization.

In view of the above, the researcher has therefore examined critically the problem of physical distribution system in an organization but paying more attention particularly to the view to identify problem of physical distribution in an organization and its roles towards achieving customer service and suggest areas of improvement. It may argued that their problems are not identical but which may be true, organization still have problems which are peculiar to each other in physical distribution, examples of such problem include, inadequacies in the areas of transportation and communication network and warehousing, just to mention but a few.

1.2 STATEMENT OF PROBLEM

In a general term, a problem can connotes a situation that appears to warrant additional investigation. Many factors have been discovered to affect the physical distribution of an organization. These factors are:

a.  The problem of distribution channel

b. The present situation of the nation’s road maintenance system which affects physically the movement of products to the needed organization.

c. The activities of the channel members

d. The high organizational service level which result in cost of physical distribution.

e.  Inadequate infrastructural facilities and its effects on distribution.

The problems outlined above are however not exhaustive, the principal aim of this study is not only to identify problems but most importantly to find alternative avenues for an organization in its distributive system  

1.3   THE OBJECTIVES OF  STUDY

The world of business is very competitive, firms strive to out complete and to succeed, try to articulate and inter grate its marketing activities effectively and efficiently, crowding it all by ensuring availability of its product.

The objectives of this study therefore are

1.  To find out the problems of the firms encumbered transporting its products from the factory to the distribution outlets.

2.  To analyze critically the physical distribution system.

3.  To suggest alternative ways of minimizing the total physical distribution cost and the same time increase organizational services.

4.  To find out whether the products are always available to the organization.

1.4  THE RELEVANCE OF THE STUDY

The following bodies or organization should benefits from the research under study:

a. THE FIRM OR ORGANIZATION: The research will assist the top and the middle management of organizations in making decision concerning logistics problems and provide an alternative ways of improving customer services.

b. BUSSINESS MEN: The important of physical distribution to a business man will be in the areas of improving its customer services at a profitable basis.

c. Other researchers will use this work as a basis or insight in carrying out other related study. Also since physical distribution is a sort of universal marketing activities the finding and recommendation will be  relevant to other firms or organizations that are in production or manufacturing

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