UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC

1. UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC Business marketing – current topics impacting on sales and purchases in the company. Knowledge from practice. MARKETING/INTERNATIONAL ECONOMICS – UCL – JANUARY, 2014 LECTURER MILAN ORESKY

2. UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC Business marketing – current topics impacting on sale and purchases in the company Intercompany relations and purchasing policy. Supply chains and networks. E-SCM and E-procurement, E-reverse auctions Customer relationship management – Supplier relationship management

3. UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC New product development and ESI – early supplier involvement Selling and buying at right price. Tendering Contract negotiations Capital investment purchases

4. UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC 1. Inter company relations and purchasing policy Supply chains and networks

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6. A Supply Chain is that network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer or consumer. Logistics and Supply Chains Types of Supply Chain • Can be classified according to: • Customer/supplier characteristics – concentrated, batch, retail and distribution • Virtuality - information • Scope – international, regional, • Service • Complexity – direct, extended, ultimate • Products – end product (build to forecast, build to order) • Purpose and value

7. Customer relationship management Quality of products and services Reverse logistics Returns management Customer service management Demand management Product development & commercialisation Supply Chain Management – Eight Processes Balancing requirements with capabilities....active influencing demand Supplier relationship management Order fulfillment Manufacturing flow management Company interaction with suppliers, short-term, long-term - intensity Operations management, Quick response manufacturing

8. Logistics and Supply Chains Ten ways of Managing Supply Chain Risk Diversification – multiple sourcing 1 Stockpiling – inventory as a buffer 2 Redundancy – maintaining excess production, storage... 3 Insurance – against losses 4 Supplier selection – more careful assessment of suppliers 5 Supplier development – working closely with suppliers 6 Contractual obligation – imposing legal obligations 7 Collaborative initiatives – spreading risks 8 Rationalisation of the product range 9 Localised sourcing – shortening transport distances 10

9. Logistics and Supply Chains Range of expenditures as percentage of the sales

10. What is Purchasing? MARKETING STRUCTURE AND DEMAND Business markets contain fewer but larger buyers. Business customers are more geographically concentrated. Business buyer demand is derived from final consumer demand. Demand in many business markets is more inelastic - not affected as much in the short run by price changes. Demand in business markets fluctuates more, and more quickly.

11. What is Purchasing? NATURE OF THE BUYING UNIT Business purchases involve more buyers. Business buying involves a more professional purchasing effort. TYPES OF DECISIONS AND THE DECISION PROCESS Business buyers usually face more complex buying decisions. The business buying process is more formalized. In business buying, buyers and sellers work more closely together and build close long-run relationships.

12. More specific objectives of buying unit • To select the best suppliers in the market. • To help generate the effective development of new products. • To protect the company’s cost structure. • To maintain the correct quality/value balance. • To monitor supply market trends. • To negotiate effectively in order to work with suppliers who will seek mutual benefit through economically superior performance. • To adopt environmentally responsible supply management.

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14. What is Purchasing? Purchasing and Change Globalisation Impact Information Technology Impact Chasing Production & Management Philosophies Impact • Slicker transactions • Quality of management • data • Strategic link with • suppliers • Paperless environment • Transgression of • national boundaries • Advantage of cost • Specialisedlabour skills • Emerging economies • Competitive advantage • Outsourcing • Supply chain • management Supplynetworks

15. What is Purchasing? Purchasing in the Future Increase in strategic importance Automated tactical activities Master contracts Electronic purchasing Strategic purchasing competency centres Shared supply chain resources Profit contribution Changed emphasis on individual skills

16. Total acquisition costs and total cost of ownership The price/cost iceberg

17. Structure and Supply Chains Seven Characteristicsof New Type Organisations Radical Decentralisation Demanding Expectations Distributed Leadership Networking & Reciprocity Intense Interdependence Transparent Performance Standards Boundary Busting „Small is beautiful“ Leadership distributed among people Direct relationships and communication between individuals + multidisciplinary approaches

18. “A network structure is a series of strategic alliances that an organisation forms with suppliers, manufacturers and distributors to produce and market a product.” • A network is not a world of individual and isolated transactions. • Network structures allow organisations to bring resources together • on a long-term basis to reduce costs. • Networks relate to all aspects of the supply chain, including • marketing and distribution.

19. Structure and Supply Chains Factors in Configuration Those that integrate for direct supply to the assembler or who have a significant technical influence on the assembly while supplying indirectly First-tier Suppliers Second-tier Suppliers Those that supply components to first-tier suppliers for integration into systems or provide some support service

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21. Structure and Supply Chains Convergent and divergent elements in a supply chain