Marketing Unit 4 Test

Trends impacting transportation

• Omnichannel retailing

• The Amazon factor 

•  Globalization

•  increased risk

•  Collaboration

•  Outsourcing

•  Cost and profitability

•  system integration

five different modes of transportation

• air

• motor carrier

• pipeline

• rail

• water

air

• Generally, the fastest mode for shipments exceeding 600 miles 

• Expensive 

• Best suited for high-value, lower volume, urgent, perishable, or time specific deliveries 

• Reliablity is problematic due to delays caused by 

  • Congestion and resultant delays with air passenger transportation (belly freight)

motor

• Account for 70% of all freight tonnage moved in US

•  most important business user of the interstate highway system

•  The cost is generally lower when compared to airfreight

•  less than truckload (LTL) versus truckload (TL)

• "accessibility to highway" – the most important factor in corporate location decisions

Truckload (TL)

•  Focus on shipments greater than 10,000 pounds

•  exact weight depends on the product

•  close to the amount that would physically fill a truck trailer

•  possible that large shipment from several customers can be consolidated

•  Move directly from the shipper's location to the consignee's location, no terminals involved

Less-than-truckload (LTL)

• 150 to 10,000 pounds

•  too big to be handled manually; too small to fill a truck

•  LTL trucks carry shipments from many shippers at the same time, thus they operate through a system of terminals

•  Prominent LTL carriers include:

  •  ABF freight system

  •  FedEx freight

  •  UPS freight

pipelines

• limited in what they can carry

• transportation is one way, no fronthaul and backhaul

• most reliable

railroads

• neither best or worst

• superior to air, motor, and pipeline, but inferior to water, in its  ability to transport different kinds of products

• less flexibility, the motor carriers, but more when compared to air, water, and pipeline

•  superior to ari and motor with regards to volume, but inferior to pipeline and water

•  less expensive than air and motor, but more expensive than pipeline and water

•  faster than pipeline and water, but slower than air and truck

rail

• Dominate rail carriers of north america

• - Union Pacific (west of the Mississippi; largest carrier)

• Burlington Northern (BNSF; west of the Mississippi)

• CSX (east of the Mississippi)

• Norfolk Southern (east of the Mississippi)

• Canadian Pacific + Kansas City Southern (North and South)

water

• Water carriers - inexpensive, slow, and inflexible. Includes inland waterway, coastal, intercoastal, and deep-sea

• somewhat unreliable

• relatively inexpensive

• slow/average speed

• carries a greater volume than rail or truck

intermodal transportation

two or more modes work closely together to utilize advantages of each mode while minimizing their disadvantages

• ex. Piggyback transportation

piggyback transportation

the transportation of goods where one transportation unit is carried on the back of something else

Last-mile delivery

refers to the last mile of delivering the shipment, the most difficult part of moving product from producer to customer

The role of warehousing

that part of the firm's logistics system that stores product, raw materials, parts, goods-in-process, and finished goods) at and between points of origin and points of consumption

warehousing and transportation are

substitutes for each other, with warehousing having been referred to as “transportation at zero miles per hour”

warehousing serves to

match different rates or volumes of flow when patterns of production and consumption do not coincide

warehousing facilitates what in a supply chain?

regrouping function

• involves rearranging the quantities and assortments of products as they move through a supply chain

warehouses vs distribution centers

warehouses emphasize the storage of products, and the primary purpose is to maximize the usage of available storage spaces. Distribution centers emphasize rapid movement of products through the facility. They ship inventory directly to a retailer, wholesaler, or directly to the consumer.

fulfillment centers

focused on e-commerce orders

cross-docking facilities

defined as “the process of receiving product and shipping it out the same day or overnight without putting it into storage”

private warehouses

• owned by a firm storing goods in the facility

• the largest uses of private warehousing are retail chain stores

• assumes both sufficient demand volume and stability so that the warehouse remains full

public warehouses

• requires no capital investment on the user’s part

• offers more locational flexibility

• may provide specialized services

contract warehousing

• also referred to as third party (3PL) warehousing

• refers to a long term, mutually beneficial arrangement which provides unique and specially tailored warehousing and logistic services exclusively to one client, where the vendor and client share the risks associated with the operation

multi-client warehousing

• mixes attributes of contract and public warehouses

• attractive to smaller organizations

Drop shipping

a retail fulfillment method where a seller doesn’t keep the products it sells in stock, instead, when a store sells a product using the drop shipping model, it purchases the item from a third party, such as a manufacturer or other wholesalers, and has it shipped directly to the customer.

velocity slotting

slot the most frequently picked items in the most accessible location to reduce travel distance

what can a well thought out slotting plan influence?

labor costs, pick and replenishment efficiency, and order accuracy

general rule of thumb when it comes to warehouse building

it is cheaper to build up than to build out

productivity

the ratio of real output to real input

utilization

the ratio of capacity used to available capacity

performance

ratio of actual output to standard output

The two primary goals of materials management

minimize cost and optimize customer service

EOQ

• the economic order quantity

• determines the order quantity that minimizes the joint cost of ordering and carry inventory

Safety stock

• aka buffer stock

• inventory quantity is maintained in addition to the base stock in order to protect the form from the uncertainties of demand and replenishment lead times.

symptoms of poor inventory management

• frequent sales to reduce inventory level

Warehouse management systems (WMS)

• implementing a WMS achieves improvements by reducing direct labor, increasing materials handling equipment efficiency, and increasing warehouse space utilization

discrete picking

a single order is filled from start to finish

batch picking

order pickers collect a group of orders

zone picking

order pickers are assigned a given zone of the warehouse; parts of the order are selected in that zone, and the order is then passed on to another order picker in another zone

wave picking

group shipments by a given characteristic, often based on the mode of transportation

general packaging functions

• marketing

  • provides the customer with information about the product

  • promotes the product

• logistics

  • organizes, protects, and identifies products and materials

branding strategy

• unique elements of a brand

• an integral part of the product development process because companies know that successful new products result from a well-conceived branding strategy

customer brand roles

• convey information about the product

• educate the customer

• reassure the customer in the purchase decision

company brand roles

• brands offer legal protection for the product through a trademark

• offer an effective and efficient methodology for categorizing products

competitor brand role

• provide competitors with a benchmark

• provides a way to get noticed

boundaries of branding

• good branding strategy will not overcome a poorly designed product

• there must be real, identifiable and meaningful difference among products

• counterfeit products or illegal activities conducted under the name of another companies brand can do significant damage to the brand.

brand equitiy

“A set of assets (and liabilities) linked to a brands name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm ir that firms customers.”

stand alone brands

Stand-alone brands separate the company from the brand, which insulates the company if there is a problem with the brand, but are expensive and offer little or no synergy between company brands.

family branding

Family branding advantages and disadvantages are just the opposite. One negative event reflects on all (eg, Heinz ketchup and other condiments)

extending the brand

A company can expand product categories through category extensions

national brands

• sold around the country under the same brand name

• higher perceived quality and price

store brands

when large retailers create a store brand to market their own products, done to compete with national brands through lower prices

licensing

• little risk

• generates additional revenue

• extends the brand

• must be monitored closely

effective packaging

• color

• designs

• package must reinforce marketing communications