Retail Supply Chain Management Through Centralized Distribution

The paper reviews the trends in the design of distribution systems in retail supply chain management. Through goals, design decisions and costs of distribution system or distribution network, the paper points to the complexity and importance of this area of supply chain management. The goal of paper is to present modern trends in the distribution system, as well as specify the advantages and disadvantages of the leading distribution systems, with a special emphasis on the central distribution. Central distribution in the supply chain represents distribution of goods through one or small number of central storages, after which the goods are further distributed to retail outlets. In the case of central distribution distribution costs of manufacturers and distributors significantly reduce, while the retailer is trying to do the same job in more cost-effective and more responsive way, while minimizing total cost of the supply chain. The issue of selection of distribution system is extremely important for success in the Croatian retail market. During the process of concentration and internationalization of market, it is necessary for Croatian retailers to choose the most efficient distribution system and adjust its design. These changes significantly affect the Croatian food producer, whereby co-operation based on trust can bring about positive effects throughout the supply chain. The paper assumes that the optimization of the entire supply chain initiated by retailers, primarily through the introduction of a central distribution system is a key response to these challenges. The hypothesis being tested perceiving contemporary literature in the field of distribution systems in supply chain management.