The document discusses key concepts related to distribution, customer service, and logistics including physical distribution, the total cost approach, transporting methods, storing facilities, inventory costs, and coordinating logistics activities through electronic data interchange and updated information systems. It also addresses ethical issues that can arise and interactive exercises to check the reader's knowledge of related topics.
This document discusses key concepts in supply chain management including the importance of mutual goals, trust, and compatible cultures between organizations in the supply chain. It also discusses challenges like local optimization, incentives that prioritize short-term gains over efficiency, and the bullwhip effect. Opportunities in integrated supply chains are larger including accurate demand information, reduced lot sizes, and collaborative planning. E-procurement, vendor selection, logistics management, distribution systems, third-party logistics, and the tradeoffs of shipping costs and inventory holding costs are also summarized.
Thirty percent of surveyed businesses reported that they have experienced some sort of supply chain fraud. So why do only 13% monitor supply chain fraud on an annual basis and only 12% on a quarterly basis? Supply chain fraud comes in a variety of forms, but the two most common types are corruption and conflict of interest. Both types lead to the ‘unlawful loss’ or ‘unlawful advantage’ that establishes supply chain fraud. These types of fraud are typically achieved through direct theft of assets, false reporting and the falsification of performance reports, and technological abuse. Supply chain fraud is a rising concern due to the growing complexity of the supply chain as a whole. While data is now much more available through top technologies such as ERP and WMS, many of the executives surveyed are not deploying data analytics tools that can help in identifying instances of fraud. The industries suffering most from supply chain fraud are life sciences/healthcare and energy/resources. Both of these industries saw significant fraud increases between 2014 and 2016. These operations, among all others, would benefit from a regularly scheduled audit program. This has proven to be the most effective method in identifying, eliminating and preventing fraud. Record and communicate these procedures to every team member to establish clear expectations and standards. To learn more about solutions available to prevent supply chain fraud contact Datex experts today at marketing@datexcorp.com or 800.933.2839 ext 243.
The document discusses reverse logistics and the transportation of hazardous materials being returned. It defines reverse logistics as the return of purchased goods and examines who receives the returns and why items are returned. The document outlines that transportation of returns is regulated and how the process of reverse logistics works from preparation to transport. It describes COSTHA's role in partnering with the DOT to develop standards and guidelines to enhance safety in transporting hazardous reverse logistics goods.
The document discusses various distribution strategies including direct shipment, intermediate inventory storage, traditional warehousing, cross-docking, and centralized pooled systems. Direct shipment reduces costs but removes risk pooling benefits. Intermediate storage uses warehouses and distribution centers to hold or transfer inventory using strategies like traditional warehousing, cross-docking, and centralized pooling. The optimal strategy depends on factors like costs, demand variability, and service level requirements.
As IoT devices proliferate, returns rise and user issues multiply, Digital Lifecycle Management service models powered by big data pump up product support to improve customer experience. Read this e-guide for iQor's expertise on reverse logistics, including all the product support activities that happen post-sale, such as repairs, returns, recycling and warranty management. In most organizations, reverse logistics has been more afterthought than strategy, more ad hoc than deliberate.
Learn more at http://info.iqor.com/e-guide_reverse_logistics
The document discusses reverse logistics, which is defined as the process of planning and controlling the efficient flow of goods from the point of consumption back to the point of origin. It covers key aspects of reverse logistics including activities, differences from forward logistics, examples in various industries, drivers, strategic uses, costs, and barriers. The main purpose is to explain the concept and importance of reverse logistics.
- 95% of customers don't consider Apple products, but there are huge growth possibilities with superior products. Apple stores display products fully operational to match their "hit product" strategy and convey value with an inspiring buying experience.
- Apple aims to set the standard buying experience as inspiration for resellers. 75% of overall sales are to consumers and small/medium businesses who are emotionally driven and sensitive to the purchasing experience.
- Education emphasizes simplicity and reliability with standardized laptops and wireless networks. Enterprises, government, and creative professionals require high performance and service levels.
The document discusses the relationship between corporate strategy and supply chain management. It explains that the corporate mission and strategy should dictate the strategies for each functional area, including operations and supply chain management. The supply chain strategy must support the overall corporate strategy through its decisions around facilities, inventory, transportation, information, and market segmentation. Dell's strategy and supply chain model is provided as an example of strategic fit between the corporate goals of customization, speed, and affordability and its supply chain design.
This document discusses key concepts in supply chain management including the importance of mutual goals, trust, and compatible cultures between organizations in the supply chain. It also discusses challenges like local optimization, incentives that prioritize short-term gains over efficiency, and the bullwhip effect. Opportunities in integrated supply chains are larger including accurate demand information, reduced lot sizes, and collaborative planning. E-procurement, vendor selection, logistics management, distribution systems, third-party logistics, and the tradeoffs of shipping costs and inventory holding costs are also summarized.
Thirty percent of surveyed businesses reported that they have experienced some sort of supply chain fraud. So why do only 13% monitor supply chain fraud on an annual basis and only 12% on a quarterly basis? Supply chain fraud comes in a variety of forms, but the two most common types are corruption and conflict of interest. Both types lead to the ‘unlawful loss’ or ‘unlawful advantage’ that establishes supply chain fraud. These types of fraud are typically achieved through direct theft of assets, false reporting and the falsification of performance reports, and technological abuse. Supply chain fraud is a rising concern due to the growing complexity of the supply chain as a whole. While data is now much more available through top technologies such as ERP and WMS, many of the executives surveyed are not deploying data analytics tools that can help in identifying instances of fraud. The industries suffering most from supply chain fraud are life sciences/healthcare and energy/resources. Both of these industries saw significant fraud increases between 2014 and 2016. These operations, among all others, would benefit from a regularly scheduled audit program. This has proven to be the most effective method in identifying, eliminating and preventing fraud. Record and communicate these procedures to every team member to establish clear expectations and standards. To learn more about solutions available to prevent supply chain fraud contact Datex experts today at marketing@datexcorp.com or 800.933.2839 ext 243.
The document discusses reverse logistics and the transportation of hazardous materials being returned. It defines reverse logistics as the return of purchased goods and examines who receives the returns and why items are returned. The document outlines that transportation of returns is regulated and how the process of reverse logistics works from preparation to transport. It describes COSTHA's role in partnering with the DOT to develop standards and guidelines to enhance safety in transporting hazardous reverse logistics goods.
The document discusses various distribution strategies including direct shipment, intermediate inventory storage, traditional warehousing, cross-docking, and centralized pooled systems. Direct shipment reduces costs but removes risk pooling benefits. Intermediate storage uses warehouses and distribution centers to hold or transfer inventory using strategies like traditional warehousing, cross-docking, and centralized pooling. The optimal strategy depends on factors like costs, demand variability, and service level requirements.
As IoT devices proliferate, returns rise and user issues multiply, Digital Lifecycle Management service models powered by big data pump up product support to improve customer experience. Read this e-guide for iQor's expertise on reverse logistics, including all the product support activities that happen post-sale, such as repairs, returns, recycling and warranty management. In most organizations, reverse logistics has been more afterthought than strategy, more ad hoc than deliberate.
Learn more at http://info.iqor.com/e-guide_reverse_logistics
The document discusses reverse logistics, which is defined as the process of planning and controlling the efficient flow of goods from the point of consumption back to the point of origin. It covers key aspects of reverse logistics including activities, differences from forward logistics, examples in various industries, drivers, strategic uses, costs, and barriers. The main purpose is to explain the concept and importance of reverse logistics.
- 95% of customers don't consider Apple products, but there are huge growth possibilities with superior products. Apple stores display products fully operational to match their "hit product" strategy and convey value with an inspiring buying experience.
- Apple aims to set the standard buying experience as inspiration for resellers. 75% of overall sales are to consumers and small/medium businesses who are emotionally driven and sensitive to the purchasing experience.
- Education emphasizes simplicity and reliability with standardized laptops and wireless networks. Enterprises, government, and creative professionals require high performance and service levels.
The document discusses the relationship between corporate strategy and supply chain management. It explains that the corporate mission and strategy should dictate the strategies for each functional area, including operations and supply chain management. The supply chain strategy must support the overall corporate strategy through its decisions around facilities, inventory, transportation, information, and market segmentation. Dell's strategy and supply chain model is provided as an example of strategic fit between the corporate goals of customization, speed, and affordability and its supply chain design.
The document discusses logistics coping skills for businesses dealing with high gas prices. It outlines 7 coping skills to contain freight costs, including re-evaluating transportation networks, optimizing loads, reducing expedited freight needs through improved supplier connectivity, running more effective bidding processes, improving carrier compliance through scorecards, and auditing invoices more efficiently. It stresses the importance of transportation management in an overall supply chain improvement strategy.
Drivers of supply chain performance group 2Bhupesh Bindal
Walmart revolutionized supply chain management through an emphasis on information. By replacing inventory with information sharing across its supply chain, Walmart was able to dramatically reduce costs and improve responsiveness. This allowed everyday low pricing and high in-store variety. Key aspects included efficient transportation and facilities networks, minimal inventory levels managed through up-to-date sales data, and collaborative planning with suppliers. The Tata Nano similarly achieved breakthrough low costs through a target costing approach and extensive supply chain optimization to remove waste.
Information is a key driver of supply chain performance. It consists of data regarding facilities, inventory, transportation, costs, prices, and customers throughout the supply chain. Information has a direct impact on all other supply chain drivers and can make the supply chain more responsive and efficient. Key performance metrics for information include data accuracy, system uptime, data accessibility, and timeliness of sharing and reporting data. Information plays an important role in creating strategic fit between the supply chain strategy and competitive strategy by enabling responsiveness to meet customer needs while achieving production and distribution efficiencies.
A presentation featuring AMR Research, Dr. Larry Mallon of SM21, Chris Ives of Argos UK, and Todd Buelow of One Network Enterprises, discussing how to make your logistics operations thrive in the global economy.
As companies work to become demand driven, it is critical that demand and transportation are optimized in concert with each other. A stand alone transportation plan, optimized in isolation, can undermine the entire supply chain since it is not properly aligned with demand.
This document provides an overview of supply chain management concepts. It defines key terms like logistics and supply chain management. It then discusses various components of a supply chain like facilities, inventory, transportation, and information and how decisions around these components can impact efficiency and responsiveness. The document also examines sourcing, pricing and supply chain collaboration strategies and how they relate to the competitive strategy.
MANAGEMENT INVENTORY FLOWS IN THE SUPPLY CHAINAshish Hande
This chapter discusses the importance of managing inventory flows throughout the supply chain. It covers the reasons companies hold inventory, including batching economies, uncertainty/safety stocks, and seasonality. It also discusses the major costs of inventory, including carrying costs, order/setup costs, and stockout costs. The chapter introduces ABC analysis for classifying inventory items and explains how inventory visibility throughout the supply chain can benefit companies. It provides methods for evaluating inventory management effectiveness, such as calculating inventory turnover ratios.
This document discusses key drivers and obstacles in supply chain management. It identifies the main drivers as facilities, inventory, transportation, information, and sourcing. For each driver, the document describes their role in the supply chain and competitive strategy. It also outlines components to consider for decisions around each driver. The document concludes by discussing obstacles to achieving strategic fit between a supply chain and competitive strategy.
Third party logistics (3PL) providers offer various integrated logistics services for customers. The 3PL industry has evolved from basic transportation and warehousing services to providing value-added services and taking on broader supply chain responsibilities. A 2008 survey found that the top services used were transportation, warehousing, and freight forwarding. While outsourcing provides benefits like cost savings and expertise, concerns include loss of control and security issues. Integrated logistics and green supply chain initiatives were emerging trends impacting the industry.
The document discusses supply chain network optimization and design. It notes that companies can significantly reduce supply chain costs and improve service levels through optimizing their network design using modeling approaches. The modeling incorporates end-to-end costs across purchasing, production, warehousing, inventory and transportation. Companies should periodically revisit their network design considering changes in factors like demand, supply sources, products, and fiscal policies to ensure their network remains optimized over time. Case studies demonstrate how modeling approaches can determine the optimal network configuration and facility locations to minimize total costs while meeting service level targets.
The document discusses several factors to consider when determining the optimal logistics network for a company operating in Detroit. It examines the number, location, size, and transportation modes for various facilities including supplier plants, warehouses, distribution centers, and retail outlets. Key considerations include costs, customer service levels, demand patterns, product attributes, infrastructure, and regulatory environment. An effective logistics network requires analyzing multiple interrelated factors to maximize efficiency and minimize total costs.
The document discusses several key aspects of operations strategy:
1) It defines operations strategy as the intersection of performance objectives (e.g. quality, cost) and operations decisions areas (e.g. capacity, supply network).
2) It explains the three levels of operations strategy - fit, sustainability, and risk. Fit refers to aligning resources with market requirements. Sustainability is developing a competitive advantage. Risk considers the impact of uncertainty.
3) It provides an example of a polar diagram that illustrates the relative importance of different performance objectives for current and new products at a medical company. This helps analyze strategic fit and gaps.
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The document discusses using inventory modeling to develop a holistic inventory strategy. It describes how companies aim to improve service levels while reducing inventory levels, but it is difficult to do both simultaneously without modeling. The document outlines factors like demand variability, supply chain complexity, different types of inventory levels, and demand patterns that must be considered in developing an effective inventory strategy. It provides an example of how modeling helped a manufacturer optimize inventory levels at dealers and distribution centers.
Logistics Breakout – Cindi Hane, Elemica: “Linking Business Strategies to Log...Elemica
The document discusses how logistics solutions from Elemica can help link business strategies to supply chain objectives and quantify the value of those solutions. It outlines Elemica's offerings like transport execution, time slot management, and freight cost management. These solutions help improve velocity, agility, reliability, and efficiency to increase profitability. The document also provides tools to help estimate potential savings from automation, reduced freight costs, and improved cash-to-cash cycles.
LOGISTICS AND SUPPLY CHAIN INFORMATION SYSTEMAshish Hande
This chapter discusses the importance of information systems to logistics and supply chain management. It covers key issues like quality of information, architecture and objectives of information systems, and how technologies are impacting logistics processes. Contemporary issues include customers, productivity and performance as top priorities. Effective information management can help ensure customer needs are met and firms competitively price products. Logistics information systems encompass planning, execution, research/intelligence, knowledge management and reporting to make relevant information available to logistics managers.
This document provides an overview of DHL Global Customer Logistics (GCL) and its service offerings. It describes DHL GCL's vision to become the preferred global partner for express distribution and supply chain solutions. It outlines DHL GCL's global logistics organization structure and details its service parts logistics, reverse logistics, and strategic parts center network around the world.
This document provides an introduction and overview of a logistics management course. It includes sections on introducing the instructor and course objectives, an outline of course topics, a description of assignments and grading, and the course schedule. The key topics covered are an introduction to logistics and supply chain management, the relationship between material and information flow, how logistics contributes to competitive advantage, and factors to consider in developing a supply chain strategy.
India has steadily liberalized its trade policies since the 1990s, reducing average tariffs and eliminating many import restrictions. However, it still maintains some protectionist policies like higher agricultural tariffs and restrictions on foreign investment in retail. The government's foreign trade policy aims to benefit consumers by facilitating imports needed to stimulate the economy. India is pursuing new regional and bilateral trade agreements and playing a leadership role in global trade negotiations. The World Bank provides analytical reports and workshops to support India's trade policy reforms and strategy in international negotiations, focusing on sectors like services, horticulture, and barriers to professional movement.
The document discusses key concepts in supply chain management including:
1) Supply chain management involves managing the flow of information and goods through the entire supply chain from raw materials to the end customer.
2) Information technology is an important enabler of supply chain management by allowing companies to share information electronically.
3) Supply chain integration and collaboration between partners can help reduce costs and improve customer service levels.
The document discusses pricing objectives, policies, and legal considerations for marketing managers. It explains how pricing objectives should guide strategy and choices around price flexibility. It also covers setting initial product prices, different pricing structures like discounts and allowances, geographic pricing policies, and legal issues regarding price discrimination and fixing.
The document discusses various pricing strategies used by businesses. It covers using markups to set prices, the importance of turnover, advantages and disadvantages of average cost pricing, and using break-even analysis to evaluate prices. It also discusses demand-oriented strategies like marginal analysis, factors influencing customer sensitivity, and how businesses use demand estimates in their pricing decisions.
The document discusses logistics coping skills for businesses dealing with high gas prices. It outlines 7 coping skills to contain freight costs, including re-evaluating transportation networks, optimizing loads, reducing expedited freight needs through improved supplier connectivity, running more effective bidding processes, improving carrier compliance through scorecards, and auditing invoices more efficiently. It stresses the importance of transportation management in an overall supply chain improvement strategy.
Drivers of supply chain performance group 2Bhupesh Bindal
Walmart revolutionized supply chain management through an emphasis on information. By replacing inventory with information sharing across its supply chain, Walmart was able to dramatically reduce costs and improve responsiveness. This allowed everyday low pricing and high in-store variety. Key aspects included efficient transportation and facilities networks, minimal inventory levels managed through up-to-date sales data, and collaborative planning with suppliers. The Tata Nano similarly achieved breakthrough low costs through a target costing approach and extensive supply chain optimization to remove waste.
Information is a key driver of supply chain performance. It consists of data regarding facilities, inventory, transportation, costs, prices, and customers throughout the supply chain. Information has a direct impact on all other supply chain drivers and can make the supply chain more responsive and efficient. Key performance metrics for information include data accuracy, system uptime, data accessibility, and timeliness of sharing and reporting data. Information plays an important role in creating strategic fit between the supply chain strategy and competitive strategy by enabling responsiveness to meet customer needs while achieving production and distribution efficiencies.
A presentation featuring AMR Research, Dr. Larry Mallon of SM21, Chris Ives of Argos UK, and Todd Buelow of One Network Enterprises, discussing how to make your logistics operations thrive in the global economy.
As companies work to become demand driven, it is critical that demand and transportation are optimized in concert with each other. A stand alone transportation plan, optimized in isolation, can undermine the entire supply chain since it is not properly aligned with demand.
This document provides an overview of supply chain management concepts. It defines key terms like logistics and supply chain management. It then discusses various components of a supply chain like facilities, inventory, transportation, and information and how decisions around these components can impact efficiency and responsiveness. The document also examines sourcing, pricing and supply chain collaboration strategies and how they relate to the competitive strategy.
MANAGEMENT INVENTORY FLOWS IN THE SUPPLY CHAINAshish Hande
This chapter discusses the importance of managing inventory flows throughout the supply chain. It covers the reasons companies hold inventory, including batching economies, uncertainty/safety stocks, and seasonality. It also discusses the major costs of inventory, including carrying costs, order/setup costs, and stockout costs. The chapter introduces ABC analysis for classifying inventory items and explains how inventory visibility throughout the supply chain can benefit companies. It provides methods for evaluating inventory management effectiveness, such as calculating inventory turnover ratios.
This document discusses key drivers and obstacles in supply chain management. It identifies the main drivers as facilities, inventory, transportation, information, and sourcing. For each driver, the document describes their role in the supply chain and competitive strategy. It also outlines components to consider for decisions around each driver. The document concludes by discussing obstacles to achieving strategic fit between a supply chain and competitive strategy.
Third party logistics (3PL) providers offer various integrated logistics services for customers. The 3PL industry has evolved from basic transportation and warehousing services to providing value-added services and taking on broader supply chain responsibilities. A 2008 survey found that the top services used were transportation, warehousing, and freight forwarding. While outsourcing provides benefits like cost savings and expertise, concerns include loss of control and security issues. Integrated logistics and green supply chain initiatives were emerging trends impacting the industry.
The document discusses supply chain network optimization and design. It notes that companies can significantly reduce supply chain costs and improve service levels through optimizing their network design using modeling approaches. The modeling incorporates end-to-end costs across purchasing, production, warehousing, inventory and transportation. Companies should periodically revisit their network design considering changes in factors like demand, supply sources, products, and fiscal policies to ensure their network remains optimized over time. Case studies demonstrate how modeling approaches can determine the optimal network configuration and facility locations to minimize total costs while meeting service level targets.
The document discusses several factors to consider when determining the optimal logistics network for a company operating in Detroit. It examines the number, location, size, and transportation modes for various facilities including supplier plants, warehouses, distribution centers, and retail outlets. Key considerations include costs, customer service levels, demand patterns, product attributes, infrastructure, and regulatory environment. An effective logistics network requires analyzing multiple interrelated factors to maximize efficiency and minimize total costs.
The document discusses several key aspects of operations strategy:
1) It defines operations strategy as the intersection of performance objectives (e.g. quality, cost) and operations decisions areas (e.g. capacity, supply network).
2) It explains the three levels of operations strategy - fit, sustainability, and risk. Fit refers to aligning resources with market requirements. Sustainability is developing a competitive advantage. Risk considers the impact of uncertainty.
3) It provides an example of a polar diagram that illustrates the relative importance of different performance objectives for current and new products at a medical company. This helps analyze strategic fit and gaps.
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The document discusses using inventory modeling to develop a holistic inventory strategy. It describes how companies aim to improve service levels while reducing inventory levels, but it is difficult to do both simultaneously without modeling. The document outlines factors like demand variability, supply chain complexity, different types of inventory levels, and demand patterns that must be considered in developing an effective inventory strategy. It provides an example of how modeling helped a manufacturer optimize inventory levels at dealers and distribution centers.
Logistics Breakout – Cindi Hane, Elemica: “Linking Business Strategies to Log...Elemica
The document discusses how logistics solutions from Elemica can help link business strategies to supply chain objectives and quantify the value of those solutions. It outlines Elemica's offerings like transport execution, time slot management, and freight cost management. These solutions help improve velocity, agility, reliability, and efficiency to increase profitability. The document also provides tools to help estimate potential savings from automation, reduced freight costs, and improved cash-to-cash cycles.
LOGISTICS AND SUPPLY CHAIN INFORMATION SYSTEMAshish Hande
This chapter discusses the importance of information systems to logistics and supply chain management. It covers key issues like quality of information, architecture and objectives of information systems, and how technologies are impacting logistics processes. Contemporary issues include customers, productivity and performance as top priorities. Effective information management can help ensure customer needs are met and firms competitively price products. Logistics information systems encompass planning, execution, research/intelligence, knowledge management and reporting to make relevant information available to logistics managers.
This document provides an overview of DHL Global Customer Logistics (GCL) and its service offerings. It describes DHL GCL's vision to become the preferred global partner for express distribution and supply chain solutions. It outlines DHL GCL's global logistics organization structure and details its service parts logistics, reverse logistics, and strategic parts center network around the world.
This document provides an introduction and overview of a logistics management course. It includes sections on introducing the instructor and course objectives, an outline of course topics, a description of assignments and grading, and the course schedule. The key topics covered are an introduction to logistics and supply chain management, the relationship between material and information flow, how logistics contributes to competitive advantage, and factors to consider in developing a supply chain strategy.
India has steadily liberalized its trade policies since the 1990s, reducing average tariffs and eliminating many import restrictions. However, it still maintains some protectionist policies like higher agricultural tariffs and restrictions on foreign investment in retail. The government's foreign trade policy aims to benefit consumers by facilitating imports needed to stimulate the economy. India is pursuing new regional and bilateral trade agreements and playing a leadership role in global trade negotiations. The World Bank provides analytical reports and workshops to support India's trade policy reforms and strategy in international negotiations, focusing on sectors like services, horticulture, and barriers to professional movement.
The document discusses key concepts in supply chain management including:
1) Supply chain management involves managing the flow of information and goods through the entire supply chain from raw materials to the end customer.
2) Information technology is an important enabler of supply chain management by allowing companies to share information electronically.
3) Supply chain integration and collaboration between partners can help reduce costs and improve customer service levels.
The document discusses pricing objectives, policies, and legal considerations for marketing managers. It explains how pricing objectives should guide strategy and choices around price flexibility. It also covers setting initial product prices, different pricing structures like discounts and allowances, geographic pricing policies, and legal issues regarding price discrimination and fixing.
The document discusses various pricing strategies used by businesses. It covers using markups to set prices, the importance of turnover, advantages and disadvantages of average cost pricing, and using break-even analysis to evaluate prices. It also discusses demand-oriented strategies like marginal analysis, factors influencing customer sensitivity, and how businesses use demand estimates in their pricing decisions.
The document discusses various topics related to advertising and sales promotion including:
- Setting specific advertising objectives to guide efforts and understanding when different types of advertising are needed
- Choosing the best advertising medium considering objectives, target market, and funds
- Planning effective advertising messages and understanding how advertising agencies work
- Understanding sales promotion techniques, their advantages and limitations, and challenges in managing promotion programs
The document discusses different types of coat silhouettes including the toggle/duffel, trench coat, walker, and chesterfield. It provides a brief history and origin for each style as well as typical characteristics such as materials, closures, pockets, and lengths. Celebrities wearing examples of each silhouette are also mentioned.
The document provides an overview of retailers, wholesalers, and their strategy planning. It discusses how retailers and wholesalers must select target markets and marketing mixes carefully. It also covers different types of conventional and non-conventional retailers, including specialty stores, department stores, mass merchandisers, and internet retailers. The document also discusses various types of wholesalers, including merchant wholesalers and agent middlemen, and how wholesaling operations are adapting to changing times.
The document discusses integrated marketing communications and promotion planning. It explains that promotion seeks to shift the demand curve and that several promotion methods are available, including advertising, personal selling, sales promotion, and publicity. The key aspects are:
- Integrated marketing communications blends different promotion methods to convey a consistent message.
- Promotion objectives relate to the adoption process and AIDA model of informing, persuading, and reminding customers.
- Promotion plans are typically blended and integrated using various pushing and pulling techniques.
The document discusses integrated marketing communications and promotion planning. It explains that promotion seeks to shift the demand curve and that several promotion methods are available, including advertising, personal selling, sales promotion, and publicity. The key aspects are:
- Integrated marketing communications intentionally coordinates all communications to convey a consistent message.
- Promotion objectives relate to the adoption process and AIDA model of informing, persuading, and reminding customers.
- Promotion plans are typically blended and integrated using various pushing and pulling techniques.
The document discusses place and development of channel systems in marketing strategy planning. It covers key issues in place decisions such as product classes and objectives. Both direct and indirect channel systems are examined, noting when each may be best. Channel specialists can help reduce discrepancies and separations in assortments. Successful channel relationships require managing conflict and commitment. Vertical marketing systems aim to focus on final customers through varying degrees of cooperation and control between producers and middlemen. The best channel system achieves an ideal level of market exposure, whether intensive, selective, or exclusive distribution.
6. Physical Distribution Concept Focuses on the Whole Distribution System Info on Product Availability Order Processing Time Backorder Procedures Inventory Storage Order Accuracy Damage in Transit Online Status Information Advance Info on Delays Delivery Time Compliance with Customers Defect – Free Deliveries Factors Affecting PD Service Levels Handling Adjustments/ Returns
10. Better Information Helps Coordinate PD Electronic Data Interchange Electronic Data Interchange Continuously Updated Information Systems Continuously Updated Information Systems Key Areas Where Computers Help PD Service
18. The Storing Function and Marketing Strategy Achieves Production Economies of Scale Keeps Prices Steady Needed When Production Doesn’t Match Consumption Achieves Production Economies of Scale Keeps Prices Steady Needed When Production Doesn’t Match Consumption Builds Channel Flexibility
19. Total Inventory Cost (Exhibit 11-7) Handling costs Cost of risks Cost of damage while in inventory Cost of storage facilities Interest expense & opportunity cost Total Inventory Cost Handling costs Cost of inventory becoming obsolete Cost of risks Cost of damage while in inventory Cost of storage facilities Interest expense & opportunity cost
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- There are many different combinations of logistics decisions. Each combination can result in a different level of distribution service and different costs. Chapter 11 begins by discussing the best way to provide the level of distribution service that customers want and are willing to pay for. Next, the choice among different modes of transportation, each with its own costs and benefits, is reviewed. Lastly, this chapter will investigate decisions about inventory and the use of distribution centers.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Logistics is the transporting, storing, and handling of goods in ways that match target customers’ needs with a firm’s marketing mix. Physical distribution (PD) is another name for logistics. Whenever the product includes a physical good, Place requires decisions about logistics. Physical distribution activities typically make up half or more of total marketing costs. By making physical distribution more efficient, an organization can increase its profits, cut prices, improve service, or achieve some combination of all three. An example of how marketers made physical distribution more efficient in the grocery industry is through a system called Efficient Customer Response (ECR). This complex system involves collaboration among many supermarket chains and producers, and the use of technology to streamline transactions. ECR has resulted in savings to U. S. consumers of about $30 billion per year. This slide relates to material on p. 276.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Customers think about physical distribution in terms of the customer service level --how rapidly and dependably a firm can deliver what the customer wants. Customers tend to care about their own needs, not about how the product was moved or stored. In other words, customers want products, not excuses . To improve the customer service level, some firms outsource some or all of their distribution work to specialists like Penske. Penske can handle order fulfillment and inventory management in addition to transportation. Its expertise in logistics can help firms reduce large inventories and other distribution costs while improving the level of customer service provided. A firm with limited financial resources or that didn't have people with expertise in logistics might turn to an outside supplier like Penske. Physical distribution is invisible to most consumers . The only time many consumers notice the physical distribution system is if they have special needs or if something goes wrong. If they are handled properly, as is usually the case in well-developed macro-marketing systems, physical distribution is taken for granted by customers. Discussion Question: What are the good points and the bad points about having consumers take the physical distribution system for granted? This slide relates to material on pp. 277-78.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Summary Overview In physical distribution, there are always trade-offs among costs, the customer service level, and sales. Because physical distribution costs can be substantial for various levels of service, marketers must determine what level of service is possible and appropriate for each target market. Key Issues For example, a retailer might reason that providing faster transportation than consumers demand will maximize customer service and reduce lost sales. However, this diagram illustrates the important trade-off between customer service and costs. Providing additional levels of customer service, such as: more inventory to prevent stockouts, or faster transportation, eventually increases the total cost of physical distribution. Notice that the curve of lost sales goes down as customer service increases, but only to a certain point. At certain points, providing too much customer service can actually detract from the overall marketing effort, because it can increase costs, and possibly price the product out of the reach of the consumers in the target market. Discussion Question: Have you ever ordered software from an Internet site where the product can be immediately downloaded for use? Is this a new paradigm for physical distribution that changes the trade-off ratio? This slide relates to material on p. 278. Indicates place where slide “builds” to include the corresponding point.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Summary Overview The physical distribution concept dictates that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level. Unfortunately, too many firms still treat physical distribution activities as separate and unrelated. Key Issues The first thing organizations must do in implementing the physical distribution concept is to decide what service level to offer . Marketing research can help to determine the appropriate service level, and it typically takes into account the various factors shown on this slide. Order processing, inventory management, shipping, storage, and returns are all key factors affecting the service level. Discussion Question: What is the danger in providing more service than customers really need or want? Marketers must then find the lowest total cost for the right service level . Total cost approach : evaluating each possible physical distribution system and identifying the total costs of each alternative system. This slide relates to material on pp. 279-81.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- As shown in this ad for NYK Line , shipping expense is an important element of the total cost in a physical distribution system. When using the total cost approach, all of the costs—including transportation, inventory, packing and damage—are identified and considered for each possible PD system. Sometimes, there are so many possible combinations of physical distribution functions in each PD system that identifying all the alternatives is sometimes difficult . For instance, water transportation may be combined with other forms of transportation to get a product from its origin to its final destination. Some companies use computer simulations to compare the alternatives. This slide relates to material on p. 281.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- This slide provides a hypothetical example of a comparison of alternative physical distribution systems for Good Earth Vegetable Company. The system on the left features high-speed shipping by air, while the system on the right uses a combination of rail shipment and warehouse storage. Note that even though the system on the left has higher transportation costs because air freight is typically more expensive than rail, the overall cost of the system on the left is lower. In the system on the right, higher costs of inventory, packing, and damage offset the cost advantages of rail shipment. This slide relates to material on p. 281.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Physical distribution functions must be apportioned across the channel to facilitate the flow of goods and services. In this way, each member functions efficiently and maximum value can be passed on to the consumer. Functions can be shifted and shared in a channel . How PD is shared affects the rest of a strategy , especially Price. A coordinated effort reduces conflict in the channel. A major benefit of just-in-time inventory (JIT) is that it necessitates coordination of activities throughout the channel. JIT requires a close, cooperative relationship among the channel members, which also helps to reduce conflict. One result of JIT is that some channels see an increase in the number of participants contributing to the final product. Marketing managers must learn to deal with the benefits of an increase in suppliers while overcoming some of the potentially negative effects. Supply chain : the complete set of firms, facilities and logistics activities involved in procuring materials, transforming them into intermediate and finished products, and distributing them to customers. A supply chain may involve even more firms than a channel of distribution. This slide relates to material on pp. 282-83. Indicates place where slide “builds” to include the corresponding point.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Summary Overview Trying to coordinate physical distribution throughout an entire supply chain is a difficult task. Computers and the Internet are becoming more and more important to marketing managers who need to keep track of inventory levels, when to order, and where goods are when they move. Key Issues Continuously updated information systems, such as the ones fed by supermarket checkout scanners, can provide marketers with an up-to-the-minute inventory count and also an instantaneous readout of what consumers are buying. Discussion Question: What packaging innovation has contributed greatly to the development of continuously updated systems? Hint: refer to Chapter 8. Electronic data interchange (EDI) sets a standard , by putting information in a structured format that allows suppliers and customers to access each other’s computer systems. It helps speed the processing of orders, inventory tracking, and customer service requests . In addition, EDI brings buyers and suppliers closer together in channels of distribution. Hand held computers UPS This slide relates to material on p. 284. Indicates place where slide “builds” to include the corresponding point.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- As in all areas of marketing, physical distribution raises some ethical concerns. Most of the ethical issues that come up in physical distribution are about communications over product availability. Some Internet vendors are being criticized for creating false expectations about the speed of delivery or for selling products that are not available. Conventional retailers also receive criticism for running out of products that they promote heavily. Some retailers offer rain checks to deal with the situation, or try to manage demand proactively by taking advance orders. Coordination of PD activities can also generate ethical problems. This slide relates to material on pp. 284-85. Indicates place where slide “builds” to include the corresponding point.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Transporting is the marketing function of moving goods. Transportation makes products available when and where they need to be—at a cost. Transporting aids economic development and exchange ; without low-cost transportation, there would be no mass distribution as we know it today. As shown in Exhibit 11-5, Transporting can be costly . Note that for products that are relatively inexpensive, such as basic commodities, transportation costs are a large part of the selling price. Transportation costs are a smaller part of the selling price for products that have a higher per-unit value, such as manufactured goods. Because transporting often crosses regional, national, or international borders, governments may influence transportation by developing transportation systems or by regulating them. This slide relates to material on pp. 285-86.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Summary Overview The transporting function must fit the whole marketing strategy . There really is no such thing as a single “best” transportation alternative that applies to every case. As shown in this exhibit, all of the transport modes have advantages and disadvantages. Therefore, the marketer must choose an appropriate mode, taking into account the product, other physical distribution decisions, and the level of customer service required. Key Issues In the U.S., railroads carry more freight over more miles than any other mode of transportation. Railroads can move large loads at low cost . Railcar shipping is slow and limited to where track is laid, but it is ideal for many bulky and nonperishable goods. Trucks are more expensive, but flexible and essential . At least 75% of U.S. consumer products travel at least part of the way by truck. In countries with good road systems, trucks are also a fast transportation alternative. Discussion Question: Marketing critics often complain that trucks damage highways and contribute to traffic congestion. Are these “costs” of trucking worth the benefits from transporting by truck? Explain. This slide relates to material on pp. 286-87.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Summary Overview Water transportation is the slowest shipping mode , but it is also low in cost and can handle a wide variety of goods. Water transportation is a very important means of international shipping. Often, it is the only practical approach. Key Issues This ad suggests that marketing managers must be sensitive to the environmental effect of transportation decisions. For example, this ship has 2.2 million barrels of oil on board. Mobil built this ship with both an inner hull (to keep the oil in) and an outer hull (to keep the water out) to reduce the odds of a oil spill. The double hull design is more expensive to build and operate. Aside from international shipments like the one shown in this ad, inland waterways are important, too . Examples include the Mississippi River in the U. S. and the Danube River in Europe. They are key conduits for large shipments of bulky, nonperishable goods. Discussion Question: What can a marketer do when ice closes down a freshwater harbor in order to maintain service and keep total distribution costs under control? Pipelines move oil and gas in oil-producing and oil-consuming countries. Many of these pipelines link oil fields and refineries, leaving other modes of transportation to carry finished petroleum products. This slide relates to material on p. 287.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Summary Overview Airfreight is expensive , but fast. It has an extensive number of locations served, a high frequency of scheduled shipments, and is dependable. Airplanes may cut the total cost of distribution , and have proven to be the most efficient method of shipping for many firms. Further, time-sensitive materials and business documents can be worth the cost of quick delivery. Key Issues As this ad shows, many firms that want to reach international markets can now do it more easily--with help from transportation firms like KLM Cargo that handle deliveries all over the world. Its information systems provide immediate feedback and updating. Its high service level is critical to many business customers. For many international shipments, it makes sense for shipping companies to put many products in a container so that it is easier to move between different transportation modes . Containerization involves grouping individual items into economical shipping quantities and sealing them in protective containers for shipping to their final location. Piggyback service loads truck trailers on railcars to provide both speed and flexibility. In other words, piggyback is a ride on two or more modes . Discussion Question: Transportation companies like CSX offer customers a complete choice of transportation modes. How can this service help customers to decide among their options? Marketing managers must be sensitive to the environment effects of whichever transportation mode is selected. This slide relates to material on pp. 287-89.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- For complete information and suggestions on using this Interactive Exercise, please refer to the “Notes on the Interactive Exercise” section for this chapter in the Multimedia Lecture Support Package to Accompany Essentials of Marketing.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Answer: B Checking your knowledge answer explanation: It is important to get the chickens from the farm to the processing plant quickly. Additionally, the area to be covered between West Virginia and Maryland is quite short. Therefore, trucking the chickens would be the best transportation option. Answer ‘B’ is the best choice. This slide relates to material on p. 287.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Summary Overview Storing is the marketing function of holding goods so they’re available when they’re needed. Inventory refers to the amount of goods being stored. Storing is necessary when production does not evenly match consumption and it can increase the value of goods by making them more available when customers want them. Thus, storing can smooth out sales, increase profits, and enhance consumer satisfaction . Key Issues Storing helps keep prices steady . Storing helps balance supply and demand and so keeps prices from sudden rises or falls. Storing allows producers to manufacture larger quantities of a product and to take advantage of economies of scale in production. Storing varies the channel system by increasing flexibility. Storing allows producers and middlemen to keep stocks at convenient locations, ready to meet customers’ needs. Therefore, marketers have more ways to vary the firm’s marketing mix to better meet consumer demand. Discussion Question: If you were a retailer, how would decisions made by a producer in regard to holding inventory affect your retail marketing strategy? Discuss what might happen if a producer asked you to: a.) keep higher quantities of product in stock; or b.) hold less inventory because a wholesaler had been recruited to carry more. This slide relates to material on pp. 290-91. Indicates place where slide “builds” to include the corresponding point.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- This slide relates to material on p. 291. Indicates place where slide “builds” to include the corresponding point. Summary Overview Storing goods can increase their value by keeping them available, but goods are stored at a cost . Key Issues Among these costs are: 1. Interest expense and opportunity cost of money tied up in inventory. 2. Cost of storage facilities and maintaining them. 3. Handling costs. 4. Costs of damage to products while in inventory. 5. Cost of risks such as theft and fire. 6. Costs of inventory becoming obsolete. Discussion Question: A seasoned retail manager once said, “Having excess inventory that won’t move is like seeing a $20 bill on the ground and being unable to pick it up.” What does he mean by this statement, and what implications does it have for managing the storing function? Rapid response cuts inventory costs . If producers and middlemen can coordinate their activities using just-in-time (JIT) inventory or efficient customer response (ECR) systems, storing costs will drop because less inventory is needed at any particular point in time. Electronic data interchange (EDI) linkages that spark replenishment orders will also help to make storing more efficient.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Summary Overview Specialized storing functions may sometimes be better accomplished through intermediaries with a very particular area of expertise. Key Issues Private warehouses : storing facilities owned or leased by companies for their own use. Firms use private warehouses when large quantities of goods must be stored regularly. The cost of private warehousing may be offset by the increased control a marketer has over the distribution of a product. Public warehouses are independent storing facilities offering all the storing and regrouping activities of a company’s warehouse, but they are open to many firms. There is more flexibility available when using a public warehouse. There is no fixed investment involved, but the marketer relinquishes some of the control over a product’s distribution when using a public warehouse. Discussion Question: Would small manufacturers be more likely to utilize public or private warehouses? Why? Warehousing facilities cut handling costs , too, but much depends on where the warehouse is located and how modern it is. Distribution center : a special kind of warehouse designed to speed the flow of goods when regrouping activities are needed but storing is not. The objective in the distribution center is not to store the product, but to distribute it . This slide relates to material on pp. 292-93.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- Answer: E Checking your knowledge (answer explanation): Given all the potential costs of holding inventory, as a manager you would want to hold enough inventory to meet expected levels but not much over that level. The best answer selection is ‘E’. This slide relates to material on pp. 292-93.
Multimedia Lecture Support Package to Accompany Essentials of Marketing Lecture Script 11- This slide refers to boldfaced terms appearing in Chapter 11. Summary Overview These are key terms you should be familiar with based upon the material in this presentation. Key Issues Logistics : the transporting, storing, and handling of goods in ways that match target customers' needs with a firm's marketing mix--both within individual firms and along a channel of distribution (i.e., another name for physical distribution). Physical distribution : the transporting, storing, and handling of goods in ways that match target customers' needs with a firm's marketing mix--both within individual firms and along a channel of distribution. Customer service level : how rapidly and dependably a firm can deliver what customers want. Physical distribution concept : all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system which seeks to minimize the cost of distribution for a given customer service level. Total cost approach : evaluating each possible physical distribution system and identifying all of the costs of each alternative. Supply chain : the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate and finished products, and distributing them to customers. Electronic data interchange (EDI ): an approach that puts information in a standardized format easily shared between different computer systems. Transporting : the marketing function of moving goods. Containerization : grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination. Piggyback service : loading truck trailers or flat-bed trailers carrying containers on railcars to provide both speed and flexibility. Storing : the marketing function of holding goods. Inventory : the amount of goods being stored. Private warehouses : storing facilities owned or leased by companies for their own use. Public warehouses : independent storing facilities. Distribution center : a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs.