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Traditional View On Distribution May Need To Change

By Chris Kane | 03/03/2010 | 7:29 AM
Since the blog is on "distribution," another thought would be blog post on how traditional view of distribution may need to change. Always struck me that the most efficient manufacturing (creating lots and lots of stuff at same time in the same way) creates inefficient distribution (storing all that stuff awaiting a buyer). Question is whether in future "distribution" will look more and more like manufacturing in order to gain efficiencies. For instance, rather than make 20,000 red phones and 20,000 green phones and 20,000 orange phones, a cell phone maker makes 60,000 generic phones and has warehouse do product finalization based on consumer demand for particular colors. How far can this product finalization go? Creating variety packs is simple. Applying faceplates and doing final packaging of cell phones is a little more complicated, but it is being done at the DC. Loading specific software onto a device (flashing) is more complicated still, but it's being done today in the DC. So how far can 3PLs go in expanding the role of the "distribution" center to more of a "final manufacturing" center? Certainly, such a strategy goes a long way to making manufacturing more efficient, reducing inventory, and negating the need for marketing to predict future consumer buying patterns.



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About Chris Kane

Chris Kane

Christopher J. Kane is Chief Customer Strategy Officer for Kane is Able, Inc., a family owned third party logistics provider in Scranton, Pa. that specializes in the consumer packaged goods sector. Kane has spent 32 years at the company, rising from driver to overseeing all marketing strategy and execution for Kane Companies.



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