Many shipping and distribution companies are delivering manufactured products and services across the globe. In fact, some of them are hiring third-party shipping services to approach their customers. Today, we’ll discuss the key differences between transportation and distribution management.
New technological approaches and methods have amplified and transformed shipping services and made it possible through air, land, and sea. It helps businesses and companies to gain a competitive edge in the market. In fact, businesses and companies are finding new practices to achieve cost efficiency.
What is Transportation Management?
As the name implies transportation management is the process of transporting inventory and goods effectively and efficiently throughout the supply chain. It comprises various processes of the supply chain ranging from choosing the right supplier to generating and processing invoices.
Often, people use logistics and transportation synonymously, but transportation is a sub-category of logistics. However, there is a close relationship between the two terms that need attention and care.
Some of the main TMS (transportation management services) are as follows;
- TMS (transportation management system) execution and configuration
- Reporting and performance management
- Shipping event tracking and visibility
- Claims administration
- Payment and freight bill audit
- Dedicated transportation
- Order management services
- Transport optimization and planning
- Compliance management and career sourcing
- Optimization and network design
Benefits of Transportation Management System
Some of the main benefits and advantages of a transportation management system are as follows;
The productivity and efficiency of the warehouse would increase to a great extent. You can track and register the orders by streamlining the transportation and warehouse management system.
The productivity of the various SCM activities like inventory, trucking, and shipment tracking would increase to a great extent. Well-optimized and strong SCM system would decrease the inefficient areas of the SCM.
When you prepare everything in advance like booking and ordering all the slots and seats, then there is no room for the error and problems while loading for the shipment at the bay.
Transportation management allows you to analyze the punctuality of the shipment and customers have the option to track their products and goods in real-time.
It helps the management to develop an efficient route plan. They can track the shipment and drivers with the help of a system and plan.
Limited Freight Cost
The freight cost saving would increase through optimization and analysis of the data.
What is Distribution Management?
Distribution management is a process that focuses on the movement and flow of goods and products ranging from manufacturers and suppliers to distribution and sales centers. Usually, the distribution channel works in the following ways;
- Retailer to the end consumer
- Wholesalers to retailer
- Producer and manufacturer to wholesaler
The distribution business usually goes by various names like the following;
Benefits of Distribution Management
Some of the main benefits and advantages of the distribution management are as follows;
- Amplifies the marketing and promotional process for buyers by offering a one-stop shop
- Increases the customer satisfaction level by completing the customer order requests accurately and speedily
- Boosting the delivery process and product delivery to the end consumers
- Decrease the shipment charges to a great extent
- No need to keep large-sized inventory in the warehouse, rather only maintaining the quantity that the company requires
- Storage costs would decrease by distributing the products on time
- Loss of inventory and spoilage rate would decrease
- Amplifying the company’s profitability
Difference between Transportation and Distribution Management
The two terms may seem the same, but there is a great difference between them. Some of the key differences between transportation and distribution management are as follows;
Movement of Goods
The focus of transportation is only the movement of goods and products from one place to another; it could be the same or different. On the other hand, distribution also consists of the movement of goods and products, but it distributes products to the precise designated place. The distribution focuses on the mobility, handling, and condition of the product, and how it would reach its proper destination.
Transportation only focuses on moving products and goods from one place to another. Along with goods movement and flow, the distribution process classifies the product items based on the following;
- Customer interaction
- Order fulfillment
When it comes to moving goods and products, then transportation doesn’t involve any strategic planning and development. On the other hand, the distribution method requires strategic planning on how to move products and goods in the distribution channel.
The transportation method is highly visible to people because you would come across transportation vehicles, billboards, and pamphlets. On the other hand, the distribution method is invisible to people, because it only distributes products from one facility to another like the manufacturer to the wholesaler, or wholesaler to the retailer.
Conclusion: Transportation and Distribution Management – Differences
After an in-depth study of the top differences between transportation and distribution management; we have realized that transportation and distribution are complete businesses. If you are learning about the differentiation between TMS and DMS, then you should keep in mind the abovementioned factors
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