The organization’s objective of providing service to the customer would be better served if the organization realizes the essential supply chain aspect of today’s business. Physical distribution function has a big role to play in the efficiency of the supply chain as this function is at one interface between the supplying and receiving organization. PDM should result in optimality for the chain as a whole.
Of course the ideal situation is the one where the inventories carried in any part or location on the supply chain should be minimal. That is, they should be minimal while being optimal for the entire chain and near optimal (if optimally is not possible) for the different members on the supply chain. This requirement for optimality or near optimality suggests that the material supplies in the pipeline, i.e., those that are on the trucks or in the goods train or other transportation mode, should be small in quantity.
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