Chapter 13 - Supply Chain Management & Marketing Channels

Supply Chain

The connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function 

Supply Chain Management

– A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value

Supply Chain Agility

An operational strategy focused on creating inventory velocity and operational flexibility simultaneously in the supply chain

Agile companies:

−Synchronize their activities by sharing supply-and-demand market information

−Focus on activities that create direct customer benefits

−Partner closely with suppliers and service providers to reduce customer wait times for products

−Reduce supply chain complexity through the evaluation and reduction (or elimination) of stockkeeping units (SKUs) that customers aren’t buying

Outsourcing (Contact Logistics)

•A manufacturer’s or supplier’s use of an independent third party to manage an entire function of the logistics system, such as transportation, warehousing, or order processing

Third - Party Logistics Compacy (3PL)

•A firm that provides functional logistics services to others like −help manage warehouse space, provide transportation solutions, assist with information sharing, or provide enhanced technological innovations.

Supply Chain Orientation

A system of management practices that are consistent with a “systems thinking” approach

Business Processes

Bundles of interconnected activities that stretch across firms in the supply chain

Customer Relationship Management (CRM) Process

•Allows companies to prioritize their marketing focus on different customer groups according to each group’s long-term value to the company or supply chain 

Customer Service Management Process

•Presents a multicompany, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced

Demand Management Process

•Seeks to align supply and demand throughout the supply chain by anticipating customer requirements at each level and creating demand-related plans of action prior to actual customer purchases

Sales & Operations Planning (S&OP)

A method companies use to align production with demand by merging tactical and strategic planning methods across functional areas of the business

Order Fulfillment Process

A highly integrated process, often requiring persons from multiple companies and multiple functions to come together and coordinate to create customer satisfaction at a given place and time

Order Fulfillment Process

– A highly integrated process, often requiring persons from multiple companies and multiple functions to come together and coordinate to create customer satisfaction at a given place and time

Order Cycle Time

The time delay between the placement of a customer’s order and the customer’s receipt of that order

Manufacturing Flow Management Process

•Process concerned with ensuring that firms in the supply chain have the needed resources to manufacture with flexibility and to move products through a multistage production process

Modular

A standardized form of component parts manufacturing designed so the parts are easily replaced or interchanged

Supplie Relationship Management Process

•Supports manufacturing flow by identifying and maintaining relationships with highly valued suppliers

Product development and commercialization process*

•Includes the group of activities that facilitates the joint development and marketing of new offerings among a group of supply chain partner firms

Returns management process

•Enables firms to manage volumes of returned product efficiently while minimizing returns-related costs and maximizing the value of the returned assets to the firms in the supply chain

Sustainable supply chain management

•A supply chain management philosophy that embraces the need for optimizing social and environmental costs in addition to financial costs

Triple Bottome Line

The financial, social, and environmental effects of a firm’s policies and actions that determine its viability as a sustainable organization

Greenwashing

When a firm publicly feigns support for environmental or social sustainability but fails to live up to these standards in practice

Digitalization

The use of digital technologies to change a business model and provide new revenue or value

Internet of Things

•A system of interrelated computing devices, mechanical and digital machines, objects, animals, or people that are connected and able to transfer data over a network without overt human effort

Big Data

•The rapidly collected and difficult-to-process large-scale data sets that have recently emerged and push the limits of current analytical capability

Supply Chain Analytics

Data analyses that support the improved design and management of the supply chain

AI

The computer science area focused on making machines that can simulate human intelligence processes

Machine Learning ML

An application of artificial intelligence that provides systems the ability to automatically learn and improve from experience without being explicitly programmed

Cloud Computing

The practice of using remote network servers to store, manage, and process data

Advanced Robotics

−Devices that act largely or partially autonomously, that interact physically with people or their environment, and that are capable of modifying their behavior based on sensor data

Automated vehicles

Cars, trucks, or other ground transportation modes for which human drivers are not required to take control to safely operate the vehicle

Drones

– Unmanned aerial vehicles that can be controlled remotely or can fly autonomously when executing a task

Digital distribution

•Includes any kind of product or service that can be distributed electronically, whether over traditional forms such as fiber-optic cable or through satellite transmission of electronic signals

Three-dimensional printing (3DP)

The creation of three-dimensional objects via an additive manufacturing (printing) technology that layers raw material into desired shapes

Supply chain traceability

The degree to which a business can track a product’s development through stages beginning with a raw material state and ending with delivery to the final consumer

Blockchain

A digital ledger in which transactions are made and recorded chronologically and publicly

Marketing channel (channel of distribution)*

•A set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer 

Channel Members

All parties in the marketing channel who negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer

Form Utility

The elements of the composition and appearance of a product that make it desirable

Time Utility

The increase in customer satisfaction gained by making a good or service available at the appropriate time

Place Utility

−The usefulness of a good or service as a function of the location at which it is made available

Exchange Utility

The increased value of a product that is created as its ownership is transferred

Merchant Wholesalers

−An institution that buys goods from manufacturers and resells them to businesses, government agencies, and other wholesalers or retailers and that receives and takes title to goods, stores them in its own warehouses, and later ships them

Agents & Brokers

−Wholesaling intermediaries who do not take title to a product, but facilitate its sale from producer to end user by representing retailers, wholesalers, or manufacturers

Retailers

A channel intermediary that sells mainly to consumers

Direct Channel

A distribution channel in which producers sell directly to consumers

Intensive Distribution

A form of distribution aimed at having a product available in every outlet where target customers might want to buy it

Selective Distribution

A form of distribution achieved by screening dealers to eliminate all but a few in a single area

Exclusive Distribution

Distribution to only one or a few dealers within a given area