logistics and supply chain management
Content
C. Direct Shipping • Direct shipping refer to the method of distribution in which goods come directly from the suppliers to the retail stores. • In this case, routing of each shipment is specified and the supply chain manager needs to decide on the quantity to ship and the mode of transportation to use. • This system eliminates the need for the intermediates facilities such as warehouses and distribution centres. • Goods that are generally distributed through the method of direct shipping are certain perishable items, high volume goods, high bulk items and specialty products.
Benefits
• The major advantage of direct shipment network is the elimination of intermediate warehouses and the simplicity of its operation and coordination. • Saves a lot of time as the time required for distribution of goods from the supplier to the retail store would be short because each shipment goes direct. • As goods move directly from the supplier to the retailer there is less handling of the products as a result there is less product damage. • Since the distribution is direct, the invoice match receiving records resulting into ease of maintaining store records.
Limitations of Direct Shipment
• The direct shipment network is justified if the retail stores are large enough because with the small size of retail stores the direct shipment network tends to have high costs. • Direct shipment from the supplier to the retailer poses a lot of hassles for the store personnel e.g. more deliveries, paperwork, loading and unloading etc. • Due to uncertainties of shipments from suppliers such as delay in transportation, wrong goods supplied, transit damage make it necessary to maintain safety stock
Benefits
• The major advantage of direct shipment network is the elimination of intermediate warehouses and the simplicity of its operation and coordination. • Saves a lot of time as the time required for distribution of goods from the supplier to the retail store would be short because each shipment goes direct. • As goods move directly from the supplier to the retailer there is less handling of the products as a result there is less product damage. • Since the distribution is direct, the invoice match receiving records resulting into ease of maintaining store records.
Limitations of Direct Shipment
• The direct shipment network is justified if the retail stores are large enough because with the small size of retail stores the direct shipment network tends to have high costs. • Direct shipment from the supplier to the retailer poses a lot of hassles for the store personnel e.g. more deliveries, paperwork, loading and unloading etc. • Due to uncertainties of shipments from suppliers such as delay in transportation, wrong goods supplied, transit damage make it necessary to maintain safety stock
