Industry Co‐operation: Key to Productivity in Physical Distribution

Physical distribution is essentially a service function and a critical component of marketing. Generation of productivity improvement in a service function raises quite different problems and may require different approaches and techniques than in a production or manufacturing function. In manufacturing, the principal avenue to productivity improvement lies in substitution of capital for labour in the individual firm. The impact of improved productivity resulting from increased capital inputs tends to be reflected primarily in a reduction of labour requirements. The nature of the product produced need not be affected by the process of mechanisation or automation, and the impact of the change on suppliers or customers can be minimal. It will make little difference to automobile dealers whether assembly of automobiles is accomplished by labour or robots.