As a product owner or distributor, do you agree that you need to have an efficient distribution network to ensure successful placement and access to your products in a timely manner?

Having the knowledge and right tools to help establish a distribution network would definitely give you the upper hand in managing your business.

Let’s look into some specific aspects of establishing a distribution network- shall we?

Distribution Network Definition

Firstly, a distribution network is the process of distributing products within an interconnected network of storage facilities.

This allocation process is done via the interconnection of transportation modes known as a distribution network. 

Each facility is responsible for specific tasks that are critical in the transportation of the products to the final customer.

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Supply Chain Management: Definition and 5 Principles You Should Know

How to Build an Ideal Distribution Network? 

Once you are familiar with the distribution process flows, it is actually a lot simpler than you initially thought.

As organizations grow and strive to reach more customers, distribution networks may expand as well. 

As a result, they must be set up in such a way that long-term growth and optimization is achieved. 

Some of the strategic planning and management elements that you should consider to achieve an optimal distribution network include:

• Ordering Quantity and Frequency of Orders

It is critical for a company to understand how frequently clients purchase a product and the volume of purchases linked with the product at any particular point of time.

This information is needed to facilitate the company’s inventory management and delivery scheduling.

• Warehouse features

Warehouse design and layout is also a key component of a well-designed distribution network. 

This will guarantee appropriate choices are made to best suit the distribution demands and ensure customers’ satisfaction.

The company must assess the ideal warehouse locations, size, convenience of access, and costs.

• Transportation Cost

The cost of transportation and its mode is vital and contributes to the important factors while developing a distribution plan. 

The mode and costs of transportation connected with the necessary transportation modes and vehicles can be estimated by determining the order frequency and location of clients.

• Customer Location

All critical service and cost drivers are taken into account when constructing distribution networks. 

Customer location is one of the most important drivers for distribution and supply chain modelling. 

Companies must determine where their clients are located as part of logistics planning.

This would also develop an efficient distribution structure at the lowest optimal cost that does not have a significant impact on the product’s price for the end consumer. 

• Factory and Supplier Location

It is also crucial for companies to identify points of entry in circumstances where products are being exported or imported.

Advantages of Achieving an Optimal Distribution Network

You were just exposed to some of the tips on building an optimum cost-effective distribution network. What kind of benefits can you gain from all of this hard work?

There are plenty of benefits to be gained, some of which include:

• Easy Monitoring of Transactions and Product Movements

Companies, industries, and enterprises may now effortlessly monitor transactions and tasks in their business thanks to the software’s automated features for distribution networks.

Through the designated software, you can fill in product duties so that monitoring will be quick and straightforward in a way that has been used or supplied to clients and prospects.

• Minimal Usage of Resources

The best thing about a powerful distribution network is that the distribution management system will lead to the most efficient use of your company’s resources. 

Maintaining accuracy is critical to running a successful organization.

Using efficient distribution system software you would be able to operate your business more accurately for a better future. 

• Reduced Costs

Think about it. With a distribution network, you can save your company’s effort and time. That would be real value.

You will be able to expand your organization’s geographical reach in a more effective and timely manner if you use an established distribution system rather than doing everything on your own.

In conclusion, having an effective distribution network makes perfect business sense for a growing organization like yours, wouldn’t it? 

By sharing some of these points, if you are considering taking this next step forward, you would consider some of the key things that you should prioritize in this article.

Case Study

CARDEX DISTRIBUTION SDN BHD – Distribution Management Software (KATSys™)

Are you looking for a consultant to construct the best distribution network? 

Backed by real-life distribution experience for over 20 years, and robust systems and process knowledge, KATSys™ can help you move forward confidently with your needs!

KATSys™ will provide total transparency and security across the supply chain through digital solutions for clients across multiple industries.

Some of the many benefits that KATSys™ provides for clients include:

KAT Solutions team combines applications technology delivered through KATSys with strategic planning and the deep knowledge of business processes to deliver the most effective distribution network that would support your growing business. 

Backed by the deep distribution experience of the KAT Group, this combination of systems and processes is unmatched by other distribution solution providers out there.

So book your consultation now with KATSys!

Get A Quotation With KATSys Now!