Final answer:
The type of distribution that encapsulates a system where all three steps must be completed prior to working on the next element is the Erlang-3 distribution.
Step-by-step explanation:
The type of distribution that encapsulates a system where all three steps must be completed prior to working on the next element is the Erlang-3 distribution. The Erlang distribution is commonly used to model the time between events in a queuing system or a process with multiple steps. In this case, each step represents an event that must be completed before moving to the next step, and the Erlang-3 distribution accounts for the three steps.