Marketing assignment(include calculation)

Supply Chain Management

Unrestricted

“All of the companies involved in the upstream and downstream flow of products, services, finances, and

information, extending from initial supplies (the point of origin) to the ultimate

customer (the point of consumption).”

What is a supply chain?

“Coordination and integration of activities performed by supply chain members into a seamless process, from the source to the

point of consumption, resulting in enhanced customer and economic value.”

What is supply chain management?

• Companies report: • Lower inventory, transportation, warehousing, and

packaging costs • Greater logistical flexibility • Improved customer service • Higher revenues

• Provides better value to customers with only marginal incremental expenditure on company assets

Benefits of supply chain management

• Push: • When manufacturers produce standardized products

that are then pushed through channels to consumers

• Pull: • When consumers drive how products are developed

based on their needs and wants

Supply chain evolution

• When multiple firms or business functions in a supply chair coordinate their activities and processes so that they are seamlessly linked to one another

Supply chain orientation

• Type of supply chain integration • Functional areas in a company charged with creating

customer demand are synchronized with those fulfilling customer demand

Demand-supply integration (DSI)

• Relationship integration • Ability of two or more companies to develop social

connections that serve to guide their interactions when working together

• Measurement integration • Reflects the idea that performance assessments be

transparent, measurable, and should assess the performance of the supply chain as a whole

• Holds each individual firm or business unit accountable for meeting its own goals

External supply chain integration

• Technology and planning integration • Creation and maintenance of information technology

systems that connect managers across and through the firms in the supply chain

• Material and service supplier integration • Requires firms to link seamlessly to those outsiders

that provide goods and services to them • To enable the firms to streamline processes and

provide quality customer experiences

External supply chain integration

• Customer integration • Enables firms to offer long-lasting, distinctive, value-

added offerings to customers who represent the greatest value to the firm or supply chain

External supply chain integration

• Customer relationship management

Key processes

• Customer service management process • A unified response system to customers when complaints,

concerns, questions, or comments are voiced

Key processes

• Demand management process • Aligns supply and demand throughout the supply chain by:

• Foreseeing customer requirements at each level • Creating demand-related plans of action prior to actual customer purchasing

behavior

• Sales and operations planning meetings: • Sharing of information between demand-generating functions and demand-

fulfilling functions to make forecasts and minimize costs

Key processes

• Order fulfillment process • Integrated process that involves people from multiple companies

and multiple functions to coordinate to create customer satisfaction at a particular place and time

• Can be used to reduce order cycle time

Key processes

• Manufacturing flow management process • Ensures that firms in the supply chain have the needed resources

to: • Manufacture with flexibility • Move products through a multi-stage production process

• Intends to improve overall manufacturing output by leveraging the capabilities held by multiple members of the supply chain

• Lean or agile strategy is selected depending on the product

• Lean supply chain: products are built before demand occurs; minimizes waste

• Agile supply chain: waits for demand to occur; prioritizes responsiveness

Key processes

• Supplier relationship management • Supports manufacturing flow by maintaining relationships with

valued suppliers • Provides structural support for developing and maintaining

relationships with suppliers

Key processes

• Product development and commercialization process • Designing a new product should include the involvement of

suppliers and customers • Helps minimize costs and meet needs and wants

Key processes

• Returns management process • Handling returns quickly creates positive image and possibly

increased customer satisfaction

Key processes

• Embraces the need for optimizing social and environmental costs in addition to financial costs

• Simultaneously: • Generate cost savings • Protect Earth’s natural resources • Ensure socially responsible business practices

Sustainable supply chain management

Trends in supply chain management

• A manufacturer turns over an entire logistical function (like buying, transportation, or warehousing) to an independent third-party logistics company (3PL)

• Offshoring: to countries with lower labor costs • Nearshoring: to countries with low costs like Mexico or

Caribbean nations, while reducing supply chain risks

Outsourcing logistics functions

• Public-private partnerships • Electronic distribution

• Products and services • 3D printing

• Supply chain analytics • Interpretation of big data • Prediction and forecasting

Other supply chain trends

What is a channel?

“A business structure of interdependent organizations that reaches from the point of production to the consumer and facilitates

the downstream physical movement of goods through the supply chain.”

Marketing channels and intermediaries

• Channel members: • Negotiate with one another • Buy and sell products • Facilitate the change of ownership between buyer and

seller as product moves through supply chain

Marketing channels and intermediaries

• Channel members facilitate distribution by: • Providing specialization and division of labor • Overcoming discrepancies • Providing contact efficiencies

• Create time, place, form, and exchange utility

Marketing channels and intermediaries

• Elements of the composition and appearance of a product that make it desirable

Form utility

• Increase in customer satisfaction gained by making a good or service available at the appropriate time

Time utility

• Usefulness of a good or service as a function of the location at which it is made available

Place utility

• Increased value of a product that is created as its ownership is transferredExchange utility

Marketing channels and intermediaries

• Merchant wholesaler: • Buys goods from manufacturers and resells them to

wholesalers, retailers, or businesses • Takes title to goods, stores them, and later ships them

• Agents and brokers: Wholesaling intermediaries who facilitate the sale of a product by representing channel members

• Do not take title to a product • Get a fee or commission based on sales volume

Channel intermediaries

• Retailers: • Firms in the channel that sell directly to customers • Simplify distribution by:

• Reducing the number of transactions required by consumers • Making an assortment of goods available in one location

Channel intermediaries

• Contacting and communicating with prospective buyers to explain the features, advantages, and benefits

Transactional functions

• Transportation and storage of assets and their sorting, accumulation, consolidation, and/or allocation of assets

Logistical functions

• Research and financing Facilitating functions

Channel functions performed by intermediaries

Channel structures – consumer products

Channel structures – business products

• Use of two or more channels to distribute the same product to target markets

Dual channels

• Non-physical channels that facilitate the unique market access of products and services

Nontraditional channels

• Cooperative agreement between business firms to use the other’s already established distribution channel

Strategic channel alliances

Alternative channel arrangements

• Unintended secondary channel that often flow illegally obtained or counterfeit product toward customers

Gray marketing channels

• Enable customers to return products or components for reuse or remanufacturing

Reverse channels

• System used by retailers that allows customers to bring used products for return or donation at the entrance of the store

Drop and shop

Alternative channel arrangements

Market factors

• Customer profiles • Consumer or

industrial customer

• Size of market • Geographic

location

Product factors

• Complexity • Price • Customization • Standardization • Life cycle

Producer factors

• Producer resources

• Number of product lines

• Desire for channel control

Factors affecting channel choice

• Aims at having a product available in every outlet where target customers might want to buy it

Intensive distribution

• Achieved by screening dealers to eliminate all but a few in any single area

Selective distribution

• Establishes one or a few dealers within a given area

Exclusive distribution

Distribution intensity

Multichannel marketing

Omnichannel marketing

Omnichannel marketing