Channel of Distribution in Supply Chain Management is defined as a category of people or departments which help in directing the flow of products from the manufacturers to the end users. It is the responsibility of Supply Chain Managers to make the products available at the right place at the right time in the correct amount. Most of the times there will be some people or organization in the middle of the chain from producers to end users. These are commonly wholesalers and retailers who stock the products. These group of people makes the distribution of products easy for the customers.
The channels of distribution creates the flow of products from the manufacturing unit to the consumers easy which gives a competitive edge. It is the effective management by supply chain managers that ensures the partnership between channels of distribution efficient by reducing cost and other factors for satisfying the consumers. The channel of distribution involves the shipping of products, wholesalers, retailers and only through the cooperation of everyone smooth functioning is possible.
Commonly channels of distribution are widely classified as a channel for consumer products and business products. Among these broad categories, different channels are used by different products. Even though products can directly be sold by manufacturers to consumers it is the distribution through channels that make the efficient and economical functioning of the supply chain management system. In certain cases, the industrial products distributors and agents in manufacturing industries are also involved. Most of the organizations have different channels of distribution which can be adjusted for adjusting with the demand in the markets.
Choosing the most appropriate channel of distribution by supply chain managers are important because one should know about the characteristics of the consumers, category of the organization, specialities of the products, the role of competitors and other environmental factors. Selecting the best channel for distribution makes the products reach the targeted users.