Working very closely with Merchandising, the Distribution functional area meets the challenge of receiving merchandise, allocating it, and ensuring it is in the right place and available for sale as it is needed. There are many challenges in this process, from usage of labor in the Distribution Centers to transportation efficiency to appropriate forecasting for allocation of merchandise. Distribution processes typically prove as important to maintaining margins as buying processes, and are sometimes managed by the Merchandising organization. Vendors will often promote systems to improve supply chain efficiencies, but often process improvement alone can make a significant impact. Process characteristics include:
- Number and placement of Distribution Centers
- Vendor direct ship, warehousing, and cross-dock usage
- Common carrier versus corporate owned fleets
- Product preparation labor mix (vendor, DC personnel, and store personnel)
- Scheduling methods and productivity analysis
- Investment level in Quality Assurance