6. Production distribution and logistics.

Production Management

Activities involved in creating semi-finished and finished goods and services

Operations Management

Managing the production of goods and creation of services

Form Utility

Value added by transforming raw materials into finished goods and services

Supply Chain Management

Managing the flow of materials and products through the production process

Inventory Management

Managing the storage and availability of materials and products

Quality Control

Ensuring products and services meet required standards

Production Scheduling

Planning production activities and timelines

Process Manufacturing

Production involving physical or chemical changes in materials

Assembly Process

Combining parts and components to create a final product

Job Production

Producing one customized product at a time

Batch Production

Producing products in groups or batches

Flow Production

Continuous production of standardized products

Computer Aided Design (CAD)

Using computers to design products in three dimensions

Computer Aided Manufacturing (CAM)

Using computers to control and automate production processes

Lean Manufacturing

Production philosophy focused on minimizing resources and waste while maximizing efficiency

Mass Customization

Producing customized products for individual customers

Facility Location

Selecting the geographic location for business operations and production facilities

Factors Affecting Facility Location

1. Near Consumers

2. Labor Cost

3. Production Resources

4. Transportation Infrastructure

5. Near Suppliers

6. Foreign Markets

Logistics

Planning, implementing and controlling the flow of materials, products and information from origin to consumption

Inbound Logistics

Movement of materials and information from suppliers to producers

Materials Handling

Movement of goods within warehouses and production facilities

Outbound Logistics

Distribution of finished products to customers

Reverse Logistics

Returning products for recycling, repair or disposal

Transportation Strategy

Selecting the most efficient way to move products

Storage Strategy

Deciding how and where products should be stored

Transportation Modes

1. Trains.

2. Trucks

3. Water Transport

4. Air Transport

Freight Forwarder

Organization that combines small shipments into a larger shipment to reduce transportation costs

Intermodal Shipping

Using multiple transportation methods to move goods

Distribution

Activities involved in moving goods from producers to consumers

Marketing Intermediary

Organization that helps move goods through distribution channels

Channel of Distribution

Network of intermediaries that moves products from producers to consumers

Agent

Intermediary who brings buyers and sellers together but does not own the product

Broker

Intermediary who negotiates exchanges without owning products and usually works temporarily

Wholesaler

Intermediary that sells products to businesses and retailers

Retailer

Business that sells products directly to final consumers

Exchange Efficiency

Reduction in contacts and costs through intermediaries

Utility

Value added by making products more useful or accessible to customers

Utilities Created by Intermediaries

1. Time Utility

2. Place Utility

3. Possession Utility

4. Information Utility

5. Service Utility

Time Utility

Making products available when customers need them

Place Utility

Making products available where customers want them

Possession Utility

Facilitating transfer of ownership through services such as credit and delivery

Information Utility

Providing information between buyers and sellers

Service Utility

Adding value through customer service before and after the sale

Retail

Sale of goods and services directly to consumers

Wholesale

Sale of goods and services to businesses or retailers for resale

Manufacturer's Agent

Agent representing several manufacturers in a specific area

Sales Agent

Agent representing a single producer in a larger territory

Retail Distribution Strategies

1. Intensive Distribution

2. Selective Distribution

3. Exclusive Distribution

Intensive Distribution

Selling products through as many retail outlets as possible

Selective Distribution

Selling products through selected retailers in a market area

Exclusive Distribution

Selling products through only one retailer in a geographic area to maintain brand image