Supply chain assignments

3)Respond to 2 classmates discussion – (Respond to a classmates

A) William

What are some distribution strategies and how are these used?

   At the basic level, there are two distribution strategies; direct shipped and intermediate inventory storage points. Direct shipped means that a product is delivered directly to either a retail point or a consumer effectively skipping steps in the supply chain. Intermediate inventory storage points (also known as warehousing) means that a product goes from manufacturer to warehouse to distribution center to retailer to customer. Some of these steps may be skipped depending on the supply chain, and more steps may be added depending on the lead time and length of the chain, but the idea in warehousing is that their are intermediary facilities that a product negotiates before reaching the consumer (Simchi-Levi et. al 2008). An example of a direct shipment strategy is JC Penny, whereby the individual stores receive products direct from manufacturers. Another example is online retailers, who work drop shipping (an entity receives an order, processes the order, and then notifies the manufacturer, who sends directly to the customer or from a warehouse), avoiding their own warehousing and product handling costs.  Intermediate inventory storage points incorporate subcategories of strategies to optimize the supply chain. The first, traditional warehousing, is the model for the industrial revolution. Products are manufactured and sent to a warehouse; with further down-line customers being distribution centers, retail outlets, and then the consumer. Each node orders the product based on actual or fore-casted demand, and then sends the product forward as requested. The second sub-strategy is that of cross-docking. Newton Transportation, INC. (now out of business) used this method exclusively in its warehouse. Local drivers picked up furniture from the factory warehouses in the area and delivered to the inbound side of the warehouse. Newton warehouse employees took items off the inbound trucks from the various manufacturers and then consolidated the shipments based on destination, to be loaded onto a truck on the outbound side. An outbound truck may have furniture from five or six manufacturers but all of it would be going to the same destination. Finally, pooling and trans-shipment strategies create centralized facilities from which multiple retailers can draw products or establish methods of one retail outlet supplying products to a customer at another retail outlet.    As Simchi-Levi et. al (2008) stated, "All of these decisions [strategies] depend on the nature and characteristics of costs, products, and customers" (p. 241).

Simchi-Levi, D., Kaminsky, P., & Edith, S.-L. (2008). Designing and Managing the Supply Chain: Concepts, Strategies and Case Study. New York: McGraw-Hill Companies Inc.