So the physical distribution side wants to buy in very small quantities to keep up with changing trends. But having up to date merchandise has it's price. Buying in small lots will destroy our theory of economies of scale. The best compromise to the problem at hand is to implement a program such as Just In Time or Kanban. These are systems which integrate the delivery, manufacturing and distribution processes.
Raw materials arrive just as the previous ones are being used up.
Materials never accumulate, this way the production process becomes more of a steady stream thus reducing bottlenecks and stockouts. The product is then delivered to the customer just as they need it. Providing them with some of the same advantages that we benefit from also, such as reducing the level of inventory on hand. When we know exactly when a particular shipment will arrive, we can schedule labor for that time. JIT will reduce our labor costs because we will not need workers waiting around for a truck to arrive.