Channel Configurations

• Direct Channel: Involves no intermediaries between the producer and the consumer.
• Multiple Channel Configurations: Utilizes more than one distribution channel to reach consumers.

Distribution Types

• Intensive Distribution: Selling products through as many outlets as possible.
  • Examples: Snacks, soft drinks, or products with ubiquitous market presence.
• Selective Distribution: Choosing specific outlets to sell products, which requires a deeper relationship with fewer retailers.
  • Example: Technology or premium products.

Supply Chain Overview

• Definition: The supply chain refers to the entire system of production and distribution of goods from suppliers to customers.
• Difference from Distribution Channel:
  • Distribution channels focus solely on how products reach consumers.
  • Supply chain includes everything needed to produce that product starting from raw materials.

Example: T-Shirt Manufacturing

• Components: Cotton fabric and thread are needed for production.
• Supplier Considerations: Quality, color, availability of cotton are factors that affect suppliers.
• Economic Impact:
  • If cotton production declines due to weather conditions, prices may rise, affecting the t-shirt manufacturer and subsequent retailers.

Example: Chocolate Production

• Cocoa Supply Chain:
  • Cocoa beans grown in Western Africa.
  • Challenges: Weather affecting bean production leading to price increases.
• Cost Factors to Consider:
  • Sourcing sugar, ensuring quality milk for chocolate production.

Starbucks Supply Chain Management

• Factors to Consider:
  • Multiple temperature requirements and ranges for different products.
  • Relationships with manufacturers for cups, napkins, and food items such as breakfast sandwiches.
  • Daily deliveries due to limited storage space in stores to maintain freshness.
• Supply Chain Components:
  • Plan, source, make, deliver; ethically and environmentally responsible.

Marketing Logistics

• Challenges:
  • Increasing product variety leads to complexity in managing inventory and logistics.
  • Customer satisfaction demands quick delivery and availability, impacting decisions across the supply chain.

Cost vs. Service in Logistics

• Cost Factors:
  • Major expense areas: transportation, inventory handling, order processing, warehousing.
• Transportation Choices:
  • Air, truck, rail, and water transport have different cost implications, with multimodal transportation often being adopted for efficiency.
• Inventory Management Issues:
  • Balancing cost of holding inventory against avoiding stockouts, which can significantly increase risk and reduce profits.

Technology in Supply Chain

• Tech Innovations:
  • RFID and drones providing automated tracking and inventory management capabilities, increasing efficiency and reducing manpower needs.

Real-Life Examples of Logistics Challenges

• Recount of personal experiences with mismanaged deliveries and the impacts of relying on different shipping methods for items ordered online.

Classroom Activity

• Task: Teams to strategize the most efficient way to move items to a sale point, considering costs associated with each movement and potential losses from damage, simulating logistical challenges faced in retail and supply chain management.