CHAPTER 13 &16 Distribution, Logistics, & Supply Chain

1. CHAPTER 13 &16Distribution, Logistics, & Supply Chain Presented by: Irys Citko & Nikolas Foster

2. Chapter 13 Distribution Management

3. Channel Structure • Provides essential linkages that connect producers and customers. The links are intracompany and extracompany entities that perform a number of functions. • Distribution Systems • Different Channels • Channel Design • Length and Width • Determinants • Culture • Analyzing existing channels • Study and adapt

4. Exhibit 13.1- Channel Configuration Producer Producer Originator Agent Agent Agent Agent Wholesaler Wholesaler IndustrialDistributor Agent Retailer Agent Retailer IndustrialDistributor Retailer Retailer Agent Consumer Industrial User Consumer / Industrial User Consumer Products Industrial Products Services

5. Competition • 2 approaches • Exporter may join • Seeking a company • Character • Nature • Influences • Capital • Financial Requirements • Cost • Capital Dimension • Protectant

6. Coverage • Intensive • Selective • Exclusive • Control • Involves relationship between intermediaries and suppliers • Continuity • Relationships • Communication • Exchange of information that is essential to the functioning of the channel • Social distance • Cultural distance • Technological distance • Time distance • Geographical distance

7. Selection of Intermediaries • Types • Distributor • Agents • Indirect exporting • Direct exporting • Integrated exporting • Commissionario • Del credere agent • Sources • Advertisement • Trade show • Example: Timberland • Governmental agencies • Private sources • Screening Intermediaries • Compared and contrast to certain criteria

8. Performance • Financial Strengths • Sales • Analyzing existing product lines • Determining the market coverage • Professionalism • Distributors reputation must be checked • Channel management • Brings together two independent entities that have shared goals • Focus on long term relationship • Coordination and cooperation

9. Factors • Separate ownership • Geographic, economic, and cultural seperation • Different rules of law • Gray Markets • Parallel importation- refer to authentic and legitimately manufactured trademark items that are produced and purchased abroad but imported or diverted to the market by bypassing designed channels • Example: Seiko Watches

10. Four Arguments: • Gray market hurts the legitimate owners of trademarks • Without protection, little incentive to improve products • “free ride” or take unfair advantage of trademark owners marketing and promotional activities • Parallel imports can deceive consumer • Attract consumers who are extremely price sensitive • Responses to the challenges of gray markets

11. Termination of the Channel Relationship • Changes in international marketer’s distribution • Lack of performance • E-Commerce • Builder of interactive relationships and as a device to sell products and services • Virtual malls • E-market places • Digital intermediaries • Challenges • Shipping • Customization • Government Regulations • Privacy Issues • Content of material • Opportunities and Threats

12. Chapter 16 Global Logistics & Materials Management

13. International Logistics • The design and management of a system that controls the flow of materials into, through, and out of the international corporation • Two Phases • Materials management- Timely movement of raw materials, parts, and supplies into and through the firm • Physical distribution- The movement of the firms finished product to its customers • Centralize or Decentralize

14. International Logistics cont. • Systems concept- to maximize the system as a whole relying on accurate information and long term supplier relations • Total cost concept- minimize overall cost by implementing system concept • Trade-off concept-linkages in the logistics system that result from the interaction of the components A-$7 B-$10 2xB-$8

15. Supply Chain Management • Planning and management of all activities involved in sourcing and procurement, conversion, and logistics. • Integration upstream and downstream • Use of the Internet • Just in Time Inventory (JIT)

17. Dimensions of Logistics • Industry comparison • Knowledge of trends • Heuristics (rules of thumb) • Educated guess (Gut) • Currency variation • Transportation modes • Truck • Rail • Air • Sea • Security- piracy, theft,

18. International Transport Issues • Transportation Infrastructure • Availability of Modes • Air Shipping • International freight forwarder • Customs broker

19. International Transport Issues cont. • Ocean Shipping • Liner service-regular service on scheduled routes • Bulk service-contractual service individual voyage or prolonged periods of time • Tramp service-irregular routes scheduled on demand • Roll-on-Roll off vessels (RORO) • LASH (Lighter aboard ship)

20. Transport Considerations • Transit times • Predictability • Nature • Cost- does cost outweigh value • What can absorb cost better electronics or grain? • Impact of Government • Pressure to use national transport • 40/40/20 rule

21. International Shipments

22. Storage/Packaging • Distribution Centers • ABC analysis • Outsourcing • Use of Foreign Trade Zones • International Inventory Issues • Order Cycle Time • Customer Service Levels • Inventory as Strategic Tool • Shipper responsible for packing • Intermodal containers

23. Stresses in Intermodal Movement

24. The firm’s ability to develop reverse logistics is a key determinant for market acceptance and profitability. • Reverse distribution • Is a complex customer service, inventory control, information management, cost accounting, and disposal process.