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Global Supply Chain Management

Global Supply Chain Management. INTRODUCTION. Global Supply Chain Management. The Global supply chain includes all the firms that engage in activities that are necessary to convert raw materials into a good or service and put it in the hands of the consumer or business customer.

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Global Supply Chain Management

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  1. Global Supply Chain Management INTRODUCTION

  2. Global Supply Chain Management • The Global supply chain includes all the firms that engage in activities that are necessary to convert raw materials into a good or service and put it in the hands of the consumer or business customer. • Supply chain management is the management of flows among the firms in a supply chain to maximize total profitability

  3. Figure 15.3: Supply Chain

  4. What is a Distribution Channel? • Series of firms or individuals that facilitate the movement of a product from the producer to the final customer • Direct • Indirect

  5. Functions of Distribution Channels • Time, place, and ownership utilities • Logistics functions • Transportation and storage functions • Efficiency creation • Facilitating functions • Repair and maintenance functions • Risk-taking • Communications and transaction functions

  6. Supermarkets as Channel Members

  7. Creating Efficiencies • Breaking bulk - channel members purchase large quantities from manufacturers and sell smaller quantities to many different customers • Creating assortments - channel members provide a variety of products in one location

  8. Figure 15.4: Reducing Transactions

  9. Channel Member Functions

  10. The Internet • Even small firms with limited resources can enjoy competitive advantages by making products available to customers around the globe at a very low cost • Disintermediation - process by which traditional intermediaries are eliminated as companies question the value added by layers in the distribution channel

  11. Types of Wholesaling Intermediaries • Wholesaling intermediaries are firms that handle the flow of products from the manufacturer to retailer or business user • Independent • Manufacturer owned

  12. Merchant wholesalers Full-service Limited-service Cash-and-carry wholesalers Truck jobbers Drop shippers Mail-order wholesalers Rack jobbers Merchandise Agents or Brokers Manufacturers’ agents Selling agents Commission merchants Merchandise brokers Independent Intermediaries

  13. Rack Jobbers

  14. Wholesalers

  15. Manufacturer-Owned Intermediaries Sales Branches Sales Offices Manufacturers’ Showrooms

  16. Independent Intermediaries

  17. Figure 15.5: Types of Distribution Channels

  18. Types of Distribution Channels • Consumer channels • Direct • Manufacturer-retailer-consumer • Manufacturer-wholesaler-retailer-consumer • Business-to-business channels • Direct • Manufacturer-industrial distributor-business customer

  19. Consumer Channels

  20. B2B Channels

  21. The Internet as Distribution Channel

  22. Dual Distribution Systems • Multiple channel usage • Example: • pharmaceutical industry sells to hospitals, clinics, and organizational customers directly and to consumers indirectly through drug retailers

  23. Dual Distribution Systems

  24. Figure 15.6: Steps in Distribution Planning

  25. Cooperatives

  26. Marketing Systems Conventional Vertical Horizontal

  27. Vertical System

  28. Vertical Marketing Systems Administered Corporate Contractual

  29. Contractual VMS Wholesaler-Sponsored Retailer-Cooperative Franchise Organizations

  30. Distribution Intensity Decision Factors: Company, Customers, Channels, Constraints, and Competition Intensive, Exclusive, or Selective Distribution

  31. Exclusive Distribution

  32. Selective Distribution

  33. Selective Distribution

  34. Intensive Distribution

  35. Managing the Channel • Selecting channel partners • Managing the channel of distribution • Channel leader is the dominant firm that controls the channel • Channel leaders have some form of power relative to other members Economic Reward Legitimate

  36. Need for Inventory Control

  37. Logistics • Process of designing, managing, and improving the movement of products through the supply chain • purchasing • manufacturing • storage • transport

  38. Logistics and Customer Satisfaction • Traditionally, logistics was thought of as physical distribution • order processing, warehousing, materials handling, transportation, and inventory control • objective to deliver product at lowest cost • Now, customers’ goals become the logistics provider’s goals

  39. Logistics Functions Order Processing Warehousing Materials Handling Functions Inventory Control Transportation

  40. Transportation Mode Considerations Dependability Cost Speed of Delivery Accessibility Capability Traceability

  41. Modes of Transportation Water Internet Pipeline Truck Rail Air

  42. Water Transportation Water transportation is best for large, bulky, nonperishable goods

  43. Tracking Movements

  44. THANKS

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