1 / 20

CHAPTER 15 Creating Value Through Supply Chain Management: Channels of Distribution, Logistics, & Wholesaling

M A R K E T I N G. Real People, Real Choices. CHAPTER 15 Creating Value Through Supply Chain Management: Channels of Distribution, Logistics, & Wholesaling. Chapter Objectives. Understand the concept of the value chain & elements in a supply chain

fern
Download Presentation

CHAPTER 15 Creating Value Through Supply Chain Management: Channels of Distribution, Logistics, & Wholesaling

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. M A R K E T I N G Real People, Real Choices CHAPTER 15Creating Value Through Supply Chain Management: Channels of Distribution, Logistics, & Wholesaling

  2. Chapter Objectives • Understand the concept of the value chain & elements in a supply chain • Explain what a distribution channel is & what functions distribution channels perform • Describe the types of wholesaling intermediaries found in distribution channels

  3. Chapter Objectives • Describe the types of distribution channels & the steps in planning distribution channel strategies • Explain how logistics is used in the supply chain

  4. Supply Chain Management • The supply chain includes all firms that engage in activities that are necessary to convert rawmaterials into a good or service • Supply chain management is the management of flows among the firms in a supply chain to maximize profitability

  5. 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 • Manufacturer -> Customer • Indirect • Intermediaries: from wholesalers to retailers

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

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

  8. Types of Wholesaling Intermediaries • Wholesaling intermediaries are firms that handle the flow of products from the manufacturer to retailer or business user • Independent • Work with lots of manufacturers • Manufacturer owned • Single manufacturer

  9. 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

  10. Manufacturer-Owned Intermediaries • Sales branches • Sales offices • Manufacturers’ showrooms

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

  12. Distribution Systems • Conventional – multi-level distribution channel in which members work independently of one another • Vertical – channel in which there is cooperation among channel members at two or more different levels of the channel • Horizontal – two or more firms at the same channel level agree to work together

  13. Vertical Marketing Systems • Administered – channel members remain independent but voluntarily work together • Corporate – single firm owns manufacturing, wholesaling, and retailing operations • Contractual – cooperation is enforced by contracts that spell out member rights and the terms of cooperation

  14. Contractual VMS • Wholesaler-sponsored – wholesalers get retailers to work together under their leadership in a voluntary chain • Retailer-cooperative – group of retailers with a wholesaling operation to help them compete more effectively with large chains • Franchise organizations – cooperation is explicitly defined and strictly enforced by franchiser

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

  16. Implementing the Value Chain • Process of designing, managing, & improving the movement of products through the supply chain • purchasing • manufacturing • storage • transport

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

  18. Logistics Functions • Order processing • Warehousing • Materials handling • Transportation • Inventory Control

  19. Modes of Physical Transportation • Rail • Water • Truck • Air • Pipeline

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

More Related