ABSTRACT
The well-known maxim ‘different products, different requirements’ is, of course, derived from practical experience. This chapter seeks to establish whether this maxim also holds true for physical distribution. It considers what the significance is with reference to physical distribution strategies, production allocation and stock allocation policy. The chapter deals with a summary of the significance of product characteristics for management’s tasks and responsibilities. The product characteristic which has the greatest effect on local distribution is packaging density: the number of cartons per cubic metre. The percentage contributed by each of the cost categories to the overall physical distribution costs is to a very large extent determined by the product characteristics. The chapter demonstrates the significance of a number of product characteristics from the perspective of physical distribution. Healthcare products company Smith & Nephew has decided to comprehensively restructure its operations in Europe. This restructuring has led to an outsourcing of its stock management and distribution services in northern Europe.
