Discuss new technology and emerging Discuss channels and distribution Identify the special problems and

Learning Objectives continued Learning Objectives continued 9 9 Di t h l d i Di t h l d i 9. 9. Discuss new technology and emerging Discuss new technology and emerging trends in supply chain management. trends in supply chain management. 12 12 10. 10. Discuss channels and distribution Discuss channels and distribution decisions in global markets. decisions in global markets. p ter 11. 11. Identify the special problems and Identify the special problems and opportunities associated with distribution opportunities associated with distribution c ha p opportunities associated with distribution opportunities associated with distribution in service organizations. in service organizations. 5 c Learning Objective 1 Learning Objective Explain what a marketing channel Explain what a marketing channel is and why intermediaries are needed. is and why intermediaries are needed. is and why intermediaries are needed. is and why intermediaries are needed. 6 Marketing Channels 1 Marketing Channels Marketing Channel A set of interdependent organizations that ease the transfer of ownership as products move from producer to Channel products move from producer to business user or consumer. Supply Ch i The connected chain of all the business entities, both internal and external to the th t f t th Chain company, that perform or support the logistics function. 7 Marketing Channel Functions 1 Marketing Channel Functions Specialization and Specialization and Division of Labor Channels Channels Fulfill Three Overcoming Di i Important Functions Discrepancies Providing Contact Efficiency 8 y Specialization and Di i i f L b 1 Division of Labor z Provides econom ies of scale z Aids producers w ho lack resources t o p m arket direct ly z Builds good relat ionships w it h cust om ers 9 Overcoming Discrepancies 1 Overcoming Discrepancies Discrepancy of The difference between the amount of product produced and the Quantity Discrepancy p p amount an end user wants to buy. The lack of all the items a Discrepancy of Assortment The lack of all the items a customer needs to receive full satisfaction from a product or products products. 10 Overcoming Discrepancies 1 Overcoming Discrepancies Temporal Discrepancy A situation that occurs when a product is produced but a Discrepancy p p customer is not ready to buy it. The difference between the Spatial Discrepancy The difference between the location of a producer and the location of widely scattered markets scattered markets. 11 Contact Efficiency 1 Contact Efficiency Zenith Sony RCA Toshiba Zenith Sony RCA Toshiba Circuit City Circuit City 12 Learning Objective 2 Learning Objective Define the types of channel Define the types of channel intermediaries and describe their intermediaries and describe their functions and activities. functions and activities. 13 Channel Intermediaries 2 Channel Intermediaries Retailer A channel intermediary that sells mainly to customers. Merchant Wh l l An institution that buys goods from manufacturers, takes title t d t th Wholesaler to goods, stores them, and resells and ships them. Agents and Brokers Wholesaling intermediaries who facilitate the sale of a product by representing channel member. 14 p g Channel Intermediaries 2 Channel Intermediaries Retailers Retailers Take Title to Goods Take Title to Goods Merchant Merchant Wholesalers Wholesalers Take Title to Goods Take Title to Goods Agents Agents Take Title to Goods Take Title to Goods Agents Agents and and Brokers Brokers Do NOT Take Title to Goods Do NOT Take Title to Goods 15 Channel Functions P f d b I t di i 2 Performed by Intermediaries ContactingPromotion Negotiating Risk Taking Transactional Functions Risk Taking Logistical Physically distributing Logistical Functions Storing Sorting Facilitating Researching 16 g Function Financing Logistics 2 Logistics Th f The process of st rat egically m anaging t he ff fl d efficient flow and st orage of raw m at erials, in- process invent ory, and finished goods from point of origin t o point of consum pt ion. 17 Learning Objective 3 Learning Objective Describe the channel structures Describe the channel structures for consumer and for consumer and business business--to to--business products business products and discuss alternative and discuss alternative channel arrangements. channel arrangements. 18 Direct C hannel 3 Direct Channel A d is tr ib u ti o n c h a n n e l in w h ic h p ro d u c e rs s e ll d ir e c tl y t o c o n s u m e rs . y 19 Channels for Consumer Products 3 Channels for Consumer Products Wholesaler Wholesaler Channel Channel Retailer Retailer Channel Channel Direct Direct Ch l Ch l AgentBroker AgentBroker Ch l Ch l Producer Producer Producer Producer Channel Channel Channel Channel Channel Channel Channel Channel Agents or Brokers Wholesalers Wholesalers Retailers Retailers Retailers 20 Consumers Consumers Consumers Consumers Channels for Business-to- Business Products 3 Business Products AgentBroker AgentBroker Industrial Industrial Direct Direct Direct Direct AgentBroker AgentBroker Producer Producer Producer Producer g g Channel Channel Distributor Distributor Channel Channel Producer Channel Channel g g Industrial Industrial Channel Channel I d t i l I d t i l Agents or Brokers Agents or Brokers Industrial Industrial Industrial Industrial Industrial Distributor Industrial Distributor Government 21 Industrial User Industrial User Industrial User Industrial User Government Buyer Alternative Channel Arrangements 3 Alternative Channel Arrangements M lti l Ch l Multiple Channels Different Different Channels Channels Nontraditional Channels May be Used May be Used Adaptive Channels Strategic Channel 22 g Alliances Learning Objective 4 Learning Objective 4 Define supply chain management Define supply chain management and discuss its benefits. and discuss its benefits. 23 Supply Chain Management 4 Supply Chain Management 4 A m anagem ent syst em t hat coordinat es and int egrat es all of t he act ivit ies perform ed by supply chain m em bers int o a seam less process, from t he source t o t he point of consum pt ion. 24 p p Supply Chain Management 4 Supply Chain Management 4 Focus on Innovative Solutions Competitive with focus on Customer Satisfaction Results Results of of Supply Chain Supply Chain Synchronized Flow Supply Chain Supply Chain Management Management Customer Value 25 Role of Supply Chain Management 4 Role of Supply Chain Management 4 Communicator of customer demand from point of sale to supplier R l f R l f R l f R l f point of sale to supplier Role of Role of Supply Chain Supply Chain Management Management Role of Role of Supply Chain Supply Chain Management Management Physical flow process that engineers the Management Management Management Management that engineers the movement of goods 26 Supply Chain Management A ti iti 4 Activities 4 Determine channel strategy and M l ti hi gy level of distribution intensity Manage relationships in the supply chain Manage the logistical components of the supply chain Balance the costs of the supply chain with the service level demanded by customer 27 y Benefits of S l Ch i M t 4 Supply Chain Management 4 Reduced Costs Improved Service Common Benefits Common Benefits of Supply Chain of Supply Chain Management Management Enhanced Revenues 28 Learning Objective 5 Learning Objective 5 Discuss the issues that Discuss the issues that influence channel strategy. influence channel strategy. 29 Channel Strategy Decisions 5 Channel Strategy Decisions Issues that Influence Ch l St t 5 Channel Strategy Factors Factors Factors Factors Affecting Affecting Channel Channel Choice Choice Levels of Levels of Distribution Distribution Intensity Intensity Market Factors Choice Choice Intensive Distribution y y Producer Factors Product Factors Exclusive Distribution Selective Distribution 30 Producer Factors Exclusive Distribution Market Factors 5 Market Factors Customer Profiles 5 Customer Profiles C I d t i l Consumer or Industrial Customer Market Factors Market Factors That Affect That Affect Size of Market That Affect That Affect Channel Channel Choices Choices Geographic Location 31 Product Factors 5 Product Factors Product Complexity 5 Product Complexity Product Price Product Factors Product Factors That Affect That Affect Product Life Cycle at ect at ect Channel Channel Choices Choices Product Delicacy 32 Producer Factors 5 Producer Factors 5 Producer Resources Number of Product Lines Producer Factors Producer Factors Producer Factors Producer Factors That Affect That Affect That Affect That Affect Channel Channel Choices Choices Desire for Channel Control 33 Levels of Distribution Intensity 5 Levels of Distribution Intensity 5 Intensity Level Intensity Level Objective Objective Number of Number of Intermediaries Intermediaries y y jj Intermediaries Intermediaries Intensive Achieve mass market selling Many selling. Convenience goods. Work with selected i t di i Many Selective intermediaries. Shopping and some specialty goods. Several Exclusive intermediary. Specialty Work with single intermediary. Specialty goods and industrial equipment One 34 equipment. Learning Objective 6 Learning Objective 6 E l i h l l d hi E l i h l l d hi Explain channel leadership, Explain channel leadership, conflict, and partnering. conflict, and partnering. 35 Managing Channel Relationships 6 Managing Channel Relationships Channel Power 6 Channel Control Channel Power Channel Leadership Channel Control Social Social Dimensions Dimensions of Channels of Channels Channel Conflict Channel Leadership of Channels of Channels Channel Partnering Channel Conflict 36 g Channel Power, C t l d L d hi 6 Control, and Leadership Ch l A channel member’s capacity to 6 Channel Power A channel member s capacity to control or influence the behavior of other channel members Channel C t l A situation that occurs when one marketing channel member i t ti ll ff t th Control intentionally affects another member’s behavior. Channel Leader A member of a marketing channel that exercises authoritypower over the activities of other members. 37 Channel Conflict 6 Channel Conflict 6 A clash of goals and m et hods bet ween dist ribut ion channel bet ween dist ribut ion channel m em bers. H i t l Horizontal Conflict Occurs among channel members on the same level Vertical Conflict Occurs among channel members at different levels 38 Channel Partnering 6 Channel Partnering 6 The j oint effort of all channel m em bers t o channel m em bers t o creat e a supply chain t hat serves cust om ers and serves cust om ers and creat es a com pet it ive advant age advant age. 39 Transaction- vs. P t hi B d Fi 6 Partnership-Based Firms Transaction Transaction--Based Based Partnership Partnership--Based Based 6 Short-term relationships Multiple suppliers Long-term relationships Few suppliers p pp Adversarial relationships Price dominates pp Cooperative partnerships Value-added services dominate Price dominates Minimal supplier investment Minimal information sharing Value added services dominate High supplierbuyer investment Extensive information sharing Minimal information sharing Firms are independent Minimal functional Extensive information sharing Firms are interdependent Extensive functional 40 area interaction area interaction Learning Objective 7 Learning Objective 7 D ib th l i ti l t D ib th l i ti l t Describe the logistical components Describe the logistical components of the supply chain. of the supply chain. 41 7 Chain Sourcing Procurement 7 g Production Scheduling S ystem Order Processing Customer Service Supply Supply Chain Chain rmation S Inventory Control Team Team tics Info r Warehouse Materials Handling Transportation Logis t 42 a spo tat o Sourcing and Procurement 7 Sourcing and Procurement Plan 7 Develop S ifi ti Purchasing Strategies Select S li Specifications Role of Role of Purchasing Purchasing Departments Departments Negotiate P i Suppliers Departments Departments Negotiate Ser ice Le els Price 43 Service Levels Production Scheduling 7 Production Scheduling 7 Traditional Focus Traditional Focus Customer Focus Customer Focus PushPull Strategy Push Start of Pull Customer Order Start of Production M f t i Inventory-Based M P d ti Customer-Order Based M C t i ti Manufacturing Mass Production Mass Customization 44 Just in Time Manufacturing 7 Just-in-Time Manufacturing 7 A process t hat redefines and sim plifies m anufact uring by reducing invent ory levels and delivering raw m at erials j ust when t hey are needed on t he product ion line. 45 p Benefits of JIT 7 Benefits of JIT 7 z Reduces raw m at erial invent ories z Short ens lead t im es z Short ens lead t im es z Creat es bet t er supplier relat ionships z Reduces product ion and st oreroom cost s z Reduces paperw ork 46 Electronic Data Interchange 7 Electronic Data Interchange 7 I nform at ion t echnology t h t l t hat replaces paper docum ent s t hat b i accom pany business t ransact ions. 47 Inventory Control System 7 Inventory Control System 7 A m et hod of developing and m aint aining an adequat e assort m ent of m at erials or product s t o p m eet a m anufact urer ’s or a cust om er ’s dem and. a cust o e s de a d 48 Warehouse and M t i l H dli 7 Materials-Handling 7 Receive goods into g warehouse Id tif t d Functions Functions of of Identify, sort and label goods Materials Materials Handling Handling Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment 49 goods for shipment Transportation 7 Transportation Cost 7 Cost Transit Time Reliability Capability Criteria Criteria for for T t ti T t ti Accessibility Traceability Transportation Transportation Mode Mode Choice Choice 50 Traceability Criteria for Ranking M d f T t ti 7 Modes of Transportation 7 Highest Highest Lowest Lowest Relative Cost g g Air Water Pipe Rail Truck Transit Time Reliability Water Rail Pipe Truck Air Pipe Truck Rail Air Water Reliability Capability Pipe Truck Rail Air Water Water Rail Truck Air Pipe Accessibility T bilit Truck Rail Air Water Pipe 51 Traceability Air Truck Rail Water Pipe Learning Objective 8 Learning Objective 8 Di th t f Di th t f Discuss the concept of Discuss the concept of balancing logistics service and cost. balancing logistics service and cost. 52 Logistics Service 8 Logistics Service 8 I nt errelat ed act ivit ies perform ed by a m em ber perform ed by a m em ber of t he supply chain t o ensure t hat t he right ensure t hat t he right product is in t he right place at t he right t im e place at t he right t im e. 53 Logistical Competencies 8 Logistical Competencies 8 Devise logist ics service st rat egies as a z Devise logist ics service st rat egies as a m eans of com pet it ive different iat ion z I nt egrat e m em bers of supply chain t o achieve operat ing excellence z Respond quickly t o changing logist ical requirem ent s q z Const ant ly m onit or all aspect s of t he supply chain 54 supply chain Learning Objective 9 Learning Objective 9 Discuss new technology Discuss new technology and emerging trends in and emerging trends in l h i t l h i t supply chain management. supply chain management. 55 Trends in S l Ch i M t 9 Supply Chain Management 9 Advanced Computer Technology Trends Trends Affecting the Affecting the Trends Trends Affecting the Affecting the Outsourcing of Logistics Functions Affecting the Affecting the Logistics Logistics Industry Industry Affecting the Affecting the Logistics Logistics Industry Industry Electronic Distribution y y y y 56 Learning Objective 10 10 Learning Objective 10 10 Di h l d di t ib ti Di h l d di t ib ti Discuss channels and distribution Discuss channels and distribution decisions in global markets. decisions in global markets. 57 Channels and Distribution D i i f Gl b l M k t 10 10 Decisions for Global Markets 10 10 Channel structure differs Channel types differ Global Channel Global Channel Development Development yp “Gray” marketing channels Development Development Global Supply Global Supply Awareness of trade legalities Global Supply Global Supply Chain Management Chain Management Transportation Infrastructure 58 Learning Objective 11 11 Learning Objective 11 11 Id tif th i l bl d Id tif th i l bl d Identify the special problems and Identify the special problems and opportunities associated with opportunities associated with distribution in service organizations distribution in service organizations distribution in service organizations. distribution in service organizations. 59 Channels and Distribution D i i f S i 11 11 Decisions for Services 11 11 Mi i i i it ti Minimizing wait times Managing service capacity Areas of Focus Areas of Focus for for Improving delivery for for Service Distribution Service Distribution p g y through new channels 60