Distributors have the least intuitive role within the supply chain. In general, they take upon themselves non-central duties from other links in the chain, as manufacturers deal daily with difficulties intrinsic to the production process and retailers deal in the same way with difficulties in interacting with the end customer. In this scenario in which the links seek to outsource as much as possible functions that are not the focus of their business, distributors add value basically by being the managers of distribution logistics, storage and inventory management of the finished products in question.
With regard to transport, distributors capture a huge distribution market from the supplier. In industries such as pharmaceuticals, for example, few laboratories produce drugs that are sold in hundreds of thousands of pharmacies across the country, and it is the distributor who has the task of managing this entire distribution process. In addition, it is not uncommon to see distributors also collecting products from manufacturers, that is, managing the entire transport operation. inbound e outbound. Henrique Alvarega's post better addresses the issue of hiring transport.
With regard to warehousing, distributors generally have distribution centers throughout their territory, offering a good level of delivery service to their customers. It is not uncommon to see chains in which manufacturers and retailers have few or even no CDs, transferring virtually all storage responsibility to distributors. In addition, distributors generally have good knowledge of the tax area, locating their storage areas in places with considerable tax benefits.
Another logistics function normally under the responsibility of distributors is inventory management in the chain. Small retailers use distributors' inventory as their own inventory, placing orders daily or even multiple times a day. Many large retailers in turn outsource their inventory management function to distributors through VMI systems, where the supplier views the retailer's inventory and recommends or even places final orders.
However, all these benefits incur costs. Distributors' profit margins are often questioned by other links in the chain, which may choose not to use them as a distribution channel. Furthermore, it is important to remember that distributors are not logistics operators, that is, they are in fact intermediary agents for the purchase and sale of goods. All the logistical difficulties of distribution, storage and inventory control can often be outsourced to a logistics operator, who is a chain support agent.
And does the sector you work in also have distributors? The decision to use or avoid them depends on a deep analysis of margins and logistical complexities in question.
References:
<https://ilos.com.br/web/qual-e-a-estrategia-de-transportes-mais-adequada/>
<http://www.scdigest.com/experts/Logility_17-06-08.php?cid=12529>
