BERMAN06.PPT 29KB Jun 05 2011 09:30:17 PM
MARKETING CHANNELS
Physical Distribution Strategy
Berman Chapter 6
Version 3.0
1
Physical Distribution
Activities
•
•
•
•
•
A. Transportation
B. Facilities
C. Inventory
D. Materials handling
E. Communication
2
•Transportation - inbound/outbound/
international carrier/ mode/ carrier
•Facilities - warehouse mngt/ planning
distribution center/ planning/ plant site
•Inventory - purchasing/raw materials/
work-in-process/ finished goods/
parts- service support/return goods handling
• Materials handling - salvage-scrap disposal/ materials
handling/ packaging
• Communication - order processing/ demand forecasting
/production scheduling
3
Symptoms of a poor PD System
•Transportation - unprofitable, peripheral hauls
few backhauls
•Facility Structure - uneven warehouse
utilization
•Inventory Mgnt - stockouts, emergency orders,
inventory turns
•Materials handling - goods received defective
•Communication, Information - lost orders,
status, inconsistent customer service
4
A. Transportation Decision Making
•railroads
•motor carriers
•waterways
•pipelines
•air freight
•third party providers
•coordinating transportation modes
5
B. Facilities
•Warehouse Decision Making
•public vs private
•private warehouses
•distribution centers, direct store delivery
•cross docking, store front system
•public warehouses
•bonded, custom, field
•hub and spoke systems
6
C. Inventory Mgnt Principles
•types of inventory
•process stock
•lot size (cycle stock)
•safety stock
•seasonal, smoothing stocks
•Computing Inventory Turnover
•unit inventory turnover
•retail $ inventory turnover
•cost $ inventory turnover
7
Inventory Decision Making
•Just-in-time and Quick Response Systems
•Characteristics of JIT
•supplies, quantities, quality, shipping
•Efficient Customer Response
•Reorder Point Determination
•order cycle time, floor ready mdse
•usage rate, review period, accurate response
•Economic Order Quantity Determination
•inventory holding costs, order proc costs
8
ABC Inventory Analysis
A. average inventory on hand = 1/2 order qty
B. annual inventory holding costs
C. annual order processing costs
D. B + C = Total annual inventory costs
•Service Levels
%
%
Cus
Co Sls Co Prods ServLvl
product group A= 80
20
98
product group B= 15
30
95
9
product group C= 5
50
80
D. Materials Handling
• Salvage and Scrap Disposal
• Materials Handling
• Packaging
10
E. Communication and Information
• Order Processing
• Demand Forecasting
• Production Scheduling
11
Physical Distribution Strategy
Berman Chapter 6
Version 3.0
1
Physical Distribution
Activities
•
•
•
•
•
A. Transportation
B. Facilities
C. Inventory
D. Materials handling
E. Communication
2
•Transportation - inbound/outbound/
international carrier/ mode/ carrier
•Facilities - warehouse mngt/ planning
distribution center/ planning/ plant site
•Inventory - purchasing/raw materials/
work-in-process/ finished goods/
parts- service support/return goods handling
• Materials handling - salvage-scrap disposal/ materials
handling/ packaging
• Communication - order processing/ demand forecasting
/production scheduling
3
Symptoms of a poor PD System
•Transportation - unprofitable, peripheral hauls
few backhauls
•Facility Structure - uneven warehouse
utilization
•Inventory Mgnt - stockouts, emergency orders,
inventory turns
•Materials handling - goods received defective
•Communication, Information - lost orders,
status, inconsistent customer service
4
A. Transportation Decision Making
•railroads
•motor carriers
•waterways
•pipelines
•air freight
•third party providers
•coordinating transportation modes
5
B. Facilities
•Warehouse Decision Making
•public vs private
•private warehouses
•distribution centers, direct store delivery
•cross docking, store front system
•public warehouses
•bonded, custom, field
•hub and spoke systems
6
C. Inventory Mgnt Principles
•types of inventory
•process stock
•lot size (cycle stock)
•safety stock
•seasonal, smoothing stocks
•Computing Inventory Turnover
•unit inventory turnover
•retail $ inventory turnover
•cost $ inventory turnover
7
Inventory Decision Making
•Just-in-time and Quick Response Systems
•Characteristics of JIT
•supplies, quantities, quality, shipping
•Efficient Customer Response
•Reorder Point Determination
•order cycle time, floor ready mdse
•usage rate, review period, accurate response
•Economic Order Quantity Determination
•inventory holding costs, order proc costs
8
ABC Inventory Analysis
A. average inventory on hand = 1/2 order qty
B. annual inventory holding costs
C. annual order processing costs
D. B + C = Total annual inventory costs
•Service Levels
%
%
Cus
Co Sls Co Prods ServLvl
product group A= 80
20
98
product group B= 15
30
95
9
product group C= 5
50
80
D. Materials Handling
• Salvage and Scrap Disposal
• Materials Handling
• Packaging
10
E. Communication and Information
• Order Processing
• Demand Forecasting
• Production Scheduling
11