IMPROVING PROFITS WITH DISTRIBUTION SERVICES

The choice of what services to provide to customers is a problem of strategic significance to most companies, yet this is a decision which is often taken in an arbitrary fashion for purely qualitative and subjective reasons. The decision made here can have serious repercussions in many areas of company operations and especially in the design and operation of the distribution system. For example, a decision to deliver to all customers within twenty‐four hours of receipt of an order can lead to a distribution system involving a large number of small, expensive depots and an underutilised delivery fleet. On the other hand an unreliable service, with many partially filled orders or frequently damaged articles for example can mean a loss of sales as customers go elsewhere.