Physical Distribution Presented by: Jerome Nip & Anthony Kamal

Physical Distribution The movement of a finished product or service to customers In most businesses, physical distribution plays a double role: Inbound and Outbound distribution Management of inbound distribution deals with receiving goods that are sent to the company while outbound distribution refers to arranging the shipment of goods from the company to its customers Physical Distribution

Physical Distribution It is responsible for the transportation and operations surrounding the movement of goods It connects sellers and buyers and without a clear physical distribution process, it would be incredibly difficult or even impossible to sells any goods Without the process of Physical Distribution, the ability to sell items would be near impossible as you would have no items to sell as you would have no materials to build the item or no process of receiving or sending the items Physical Distribution

Outbound Distribution Outbound distribution is the arranging of the shipment of finished goods from the company to its customers. It refers to the storage, transport, and delivery of goods going out of a business. The seller of the item is usually the outbound distributor but it could also be a distribution centre or warehouse if a larger size business is involved. Outbound Distribution

Outbound Distribution There are three main steps in the outbound distribution process. The seller must arrange the shipment of goods to the buyer. The seller must prepare the necessary customs documentation for border clearance and selecting a carrier unless the goods are to be shipped Ex Works (EXW) The carrier must prepare an official document that says the transportation company accepts the shipment, also known as a bill of lading. Outbound Distribution

Outbound Distribution In the supply chain process, it is one of the last steps because the finished goods are being moved out of the organization and towards the final consumer. It is the last main link in the supply chain as the goods are headed out of the seller’s hands and into the hands of the buyer. Outbound Distribution

Outbound Distribution Outbound is an integral part in the supply chain process since it ensures that the shipment of goods arrive at its final destination. It is essential to ensuring the efficient management of the flow of products in the supply chain. Due to the increasing amount of supply/demand from global markets in recent decades, both inbound and outbound distribution have become a vital part of the logistical processes. It plays a critical role in a supplier's overall customer relationship management process. Outbound Distribution

Inbound Distribution The process of receiving the goods from a seller Majority of responsibility lies on the buyer Here the buyer takes possession of the goods Legally the buyer owns the goods once they pass the FOB point FOB point varies depending on the goods being transported and how the goods are being transported Inbound Distribution

Inbound Distribution Steps Within the Inbound Process Inspection for obvious physical damage Check the amount of containers arrived is the agreed upon quantity A physical count of everything within the shipment Fills out the necessary claim reports if any items are missing or broken Assigns stock numbers (SKUs) to new items Records the quantity of goods received in the inventory database according to the stock number of each item Records the location of each item (ie. warehouse, selling floor) Indicates to the accounting office that the shipment has arrived and the seller’s invoice can now be paid Inbound Distribution

The process of goods changing ownership and how those goods are received. Without a defined Inbound Distribution process there would huge complications with the ownership of goods Who has liability over the goods and confirmation of the goods being received Inbound Distribution

Also known as the Free On Board Shipping Point Also known as the Free On Board Shipping Point. Legal and financial responsibility for the shipment begins at the FOB Point This is the point where the responsibility of the physical distribution of the goods pass from the seller to the buyer. From this point, the buyer becomes responsible for the costs and risks associated with the shipment. FOB Point

Since the buyer takes ownership at the point of departure from the supplier's shipping dock, the supplier should record a sale at that point. The buyer should record an increase in its inventory at the same point since the buyer is undertaking the risks and rewards of ownership.

Thank You