Abstract
The coronavirus pandemic has massively disrupted supply chain performance at the global and local stage, and the concept of supply chain risk management and resilience has been pushed to the forefront. In order to overcome all these challenges and changes, it's time for businesses and supply chains to learn from the past and to develop new strategical and organizational dimensions and to be ready with alternative strategy which has not been widely discussed, 'risks mitigation in distribution', to ensure the delivery of final products to the end consumers. This chapter presents a review of literature that addresses supply chains risks, which are generated in transportation and distribution. In this regard, it's crucial to bring to light as well some measures and strategies that companies can implement to cope with the risks caused by some disruptions. These include the rising importance of safety, digitalization, and the need to revisit the meaning of efficiency in transportation and distribution management.
TopBackground
Distribution Logistics: An Overview
The distribution logistics system has for so long been considered as a strategic function for the proper functioning of the companies, and that because the significant role which plays in the reduction of costs of supplying finished products to customers, maintaining or improving the level of service provided, being as a key factor of success for the business. Before getting into the main item, it seems critical in the first place to point out to the main concepts composing the term ‘distribution logistics’ in order to come up with the appropriate definition thereof.
Distribution in Logistics: Conceptualization
Logistics and distribution are considered as critical components and essential activities for the daily operations of delivering and overseeing the movement of goods from supplier to manufacturer to wholesaler or retailer and finally to the end consumer. Besides, these two vital functions involve numerous activities and processes usually related to good flow monitoring, packaging, warehousing, inventory, supply chain, logistics. Nevertheless, these two are in fact two different things but work hand-in-hand and the difference between the two concepts is the key to ensuring that your supply chain continues to run like a well-oiled machine.
Key Terms in this Chapter
Transportation and Distribution Risks: Occur as a result of a subset of several elements such as natural catastrophes, labor dispute, man-made threats, political instability and severe legal disruptions which could impact high negatively the performance and could “quickly cripple the entire supply chain
Supply Chain Vulnerability: Supply chain vulnerability indicates the responsiveness of a supply chain to disruptions, and can be defined as an exposure to serious disturbance arising from supply chain risks and affecting the supply chain’s ability to effectively serve the end customer market.
Supply Chain Resilience: Manifests when the network is capable to withstand, adapt, and recover as quickly as possible from disruptions to meet customer demand and ensure performance.
Supply Chain Risk Management: The supply chain risk management SCRM in distribution and transportation refers to the set of strategies and plans implemented in order to manage the whole network through constant risk assessment and reduce vulnerabilities to ensure resilience in supply chains.
Outbound Logistics: Known also as physical distribution. The latter takes part of the downstream logistics which consist in routing the products resulting from a production process to the customer (directly to his home in case of delivery to the consumer, or to the place where the customer can buy the product). This process includes storage, order fulfilment and packaging of goods, and sometimes the handling of returned goods or what’s called the reverse logistics.
Transportation System in Logistics: The transport system is the “glue” that links and holds not only the distribution network but the whole supply chain as well. Given that transportation represents the last phase in the value chain to touch the customer and may have a significant impact on the success of the transaction, it constitutes the key enabler for a customer-oriented strategy such as overnight and same-day delivery.