Contents
Page
Importance of physical distribution. .
. . . . . . . . . . . . . . . . . . . . . . .
1
Transportation developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Implications of transportation changes
. . l . . . . . . . . . . . . . . . . 12
Distribution developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Implications of warehousing
and distribution changes . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Planning for the future .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Cooperative Information Report 1 Section 12
September 1978
i
Coopemlive
TmnsporMion
and Distribution
Physical distribution in a farm marketing or supply cooper-
ative involves the total concept of managing products or materials
moving to, within, and from cooperatives. It generally includes
transportation, warehousing or storage, order processing, inven-
tory management, materials handling, packaging, plant location,
and the logistics of raw materials, intermediate supplies, and fin-
ished products.
Importance of Physical Distribution
Physical distribution is important to almost all cooper-
atives. Distribution costs comprise 20 to 50 percent of the selling
price of a product, thus often affording many opportunities for
improving operating efficiency and service to patrons.
Distribution management begins with an order to buy or to
sell and may bring into play several divisions or functions of a
cooperative. Decisions must be made on when, how, and where
the shipment is to move. Decisions often are made by several peo-
ple without adequate communication or coordination among
them. In an increasing number of larger cooperatives, orders are
entered directly into computers to provide printouts for preparing
bills of lading and other shipping documents.
Physical distribution considers total costs of handling prod-
ucts. For example, a decision resulting in least-cost transportation
might mean higher overall costs to the cooperative if it should
result in