This paper examines the impact on physical distribution management of the fundamental changes now taking place in the retail industry. The issues discussed are from the perspective of the larger retailing companies in Australia, the U.K. and the U.S.A. The current literature on both physical distribution and retailing is reviewed in the process.
The range of physical distribution options open to large retailers are covered including the use of specialised contractors. The paper also outlines the internal and external pressures currently acting on distribution operations. The impact of new information and materials handling technology is also assessed.
The section on the Myer-Grace stores covers in some detail the recent initiatives undertaken by that company and also outlines some likely future directions. Most of the information presented was obtained through interviews with senior company -executives.
The paper concludes that the changes in retailing described and analysed here comprise a revolution. Location and efficiency in distribution will be increasingly produced through the movement of information rather than the movement of products.
In the same way that retailer revolution has more years to run, so the physical distribution effects and implications will continue to reverberate for a number of years, challenging distribution practices and businesses. The challenge will be met by forward-looking, customer-service oriented companies who are, willing to invest in appropriate technology, personnel and logistics management. These companies will emerge over the coming years to dominate the distribution business, providing the service for the 1990s and beyond.
A final caveat, however, is necessary. Companies must not assume that the distribution challenges can be met easily. In the same way that the retail revolution has caused major casualties, recent evidence suggests that some companies are. treating too lightly the complexity of modern physical distribution systems. The new distribution is not easy; it requires considerable time, effort and skill to get it right.