Product Characteristics

One of the major factors to be considered when planning for logistics is, perhaps not surprisingly, the product itself.

For the logistics planner, the physical characteristics of the product and package are seen to be of great significance. This is because, in distribution and logistics, we are directly concerned with physical flow movement and storage. The physical characteristics of a product, any specific packaging requirements and the type of unit load are all-important factors in the trade-off with other elements of distribution when seeking least-cost systems at given service levels. This potential for trade-off should continually be borne in mind.

Few product characteristics impacting the development and operation of a distribution system are

Volume to weight ratio

A low ratio of volume to weight in a product (such as sheet steel, books, etc) generally means an efficient utilization of the main components of distribution. Thus, a low-volume/high-weight product will fully utilize the weight-constrained capacity of a road transport vehicle.

On opposite, a high volume to weight ratio, tends to be less efficient for distribution. Typical products include paper tissues, crisps, disposable nappies, etc. These products use up a lot of space, and are costly for both transportation and storage.

Value to weight ratio

High-value products are more able to absorb the associated distribution costs. It is oft en essential for low-value products to have an inexpensive distribution system, as otherwise the effect on the total cost of the product might make it non-viable in terms of its price in the marketplace.

It is useful to assess the value effect in terms of a weight ratio: the value to weight ratio. Low value to weight ratio products (eg ore, sand, etc) incur relatively high transport unit costs compared with high value to weight products (eg photographic equipment, computer equipment, etc).

High-risk products

The characteristics of some products present a degree of risk associated with their distribution (perishability, fragility, hazard/danger, contamination potential, and extreme value). The need to minimize this risk (sometimes a legal obligation) means that a special distribution system design must be used.