Advantages and disadvantages of costs in International Physical Distribution

Introduction

Physical distribution includes all the activities associated with the supply of finished
product at every step, from the production line to the consumers. Important
physical distribution functions include customer service; order processing,
inventory control, transportation and logistics, and packaging and materials.
Product distribution requires a huge amount of planning and painstaking logistics -
from order handling, stock control and storage, to packing, dispatch and delivery of
goods. If your business is not capable of performing all these activities by it, you
may want to consider partnering with an experienced logistics company to
distribute your products for you. Physical distribution is the sum of a firm's
warehouse location decisions, inventory control processes, order handling and
transportation decisions. The goal for a firm is to manage all these aspects so as to
minimize its total physical distribution costs.
For any company that wants to export one of the choices that must be controlled
are those of international transport and distribution in the destination market, these
factors must be handled correctly by the company so that the product arrives in
appropriate times and forms the final consumers

For every entrepreneur, distribution is a cost issue that must be faced, these costs
are normally high, generating an extra cost in the product that the consumer
ultimately pays. It is therefore understandable that in a product different actors can
intervene from their productive chain to the distribution chain. That is, any failure in
one of the stages of a product can suspend the distribution system affecting
international business.

It is for this purpose that the international physical distribution exists, being the
logistic process that is carried out in the export of products and that as main
objective is to reduce costs, times and risks to the maximum from the point of
departure at the origin to the Delivery point to the final destination.

In order for a company to expand and look for better opportunities in the market, it
must consider the investments of time, effort and capital; therefore the correct
logistics that it carries out is possible to reduce the costs of the products for the
benefit of the consumers and the costs. of production for the benefit of the
company. The impact of the logistics department within the companies is visible in
the degree of customer satisfaction, as well as in the fluidity of the internal
processes of tracking, production and transportation, if the correct efforts are being
made that will ultimately be seen releases in the reduction of costs.

That is why the advantages of reducing logistics costs can trigger in which the
company is forced to increase its productivity since it must be directed more and
more to improve competitively, this also applies to the improvement of the
company's management of the company, thus same redounds in the possibility of
expanding markets by accessing products and markets that without the correct
export are unattainable ending in one of the best assets of companies: the
increase of their customers

On the other hand, if you do not have control over the costs, you can incur high
operational risks, which leads to economic and political risks for the company, as
well as " whip effects" that can disrupt the real demand, and finally The greatest
danger that the organization has in not protecting itself from cost overruns is that it
has zero margin of error or reduced inventories to supply market needs.
 Conclusion

This is why strategies and international physical distribution should be

characterized by creating the capacity in companies to generate support to
internationalize from their production or from their market, always remembering
that corporate success because it is no longer measured so easily at present in the
quantitative and qualitative, being a factor of competitiveness to generate
profitability in import operations.