Marketing chapter 16a customer driven supply chain logistics management

McGraw-Hill/Irwin

Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.


LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 16, YOU SHOULD BE ABLE TO:

LO1

Recognize the relationship between
marketing channels, logistics, and
supply chain management.

LO2

Describe how a company’s supply
chain aligns with its marketing
strategy.

16-2


LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 16, YOU SHOULD BE ABLE TO:

LO3

LO4

Identify the major logistics cost and

customer service factors that
managers consider when making
supply chain decisions.

Describe the key logistics functions in
a supply chain.

16-3


LO1

SIGNIFICANCE OF SUPPLY CHAIN
AND LOGISTICS MANAGEMENT
KEY CONCEPTS



Supply Chain



Supply Chain Management



The Automotive Supply Chain

16-4

LO1

SIGNIFICANCE OF SUPPLY CHAIN
AND LOGISTICS MANAGEMENT
KEY CONCEPTS



Logistics



Logistics Management
• Cost-Effective Flow
• Customer Requirements = Service
16-5


FIGURE 16-1 Relating logistics
management and supply chain management
to supplier networks and marketing
channels

16-6


The Supply Chain

Logistics
You are here


FIGURE 16-2 The automotive supply chain
includes thousands of firms that provide the
5,000 or so parts in a typical car

16-9


FIGURE 16-A Paint industry supply chain

16-10


LO2

SIGNIFICANCE OF SUPPLY CHAIN
AND LOGISTICS MANAGEMENT
SUPPLY CHAIN MANAGEMENT AND
MARKETING STRATEGY



Aligning a Supply Chain
with Marketing Strategy
• Understand the Customer
• Understand the Supply Chain
• Harmonize the Supply Chain

with the Marketing Strategy
16-11


LO2

SIGNIFICANCE OF SUPPLY CHAIN
AND LOGISTICS MANAGEMENT
SUPPLY CHAIN MANAGEMENT AND
MARKETING STRATEGY



Aligning a Supply Chain
with Marketing Strategy
• Dell: A Responsive Supply Chain
• Wal-Mart: An Efficient Supply Chain

16-12


LO3



INFORMATION AND
LOGISTICS MANAGEMENT IN A
CUSTOMER-DRIVEN SUPPLY CHAIN
Information’s Role in Supply Chain
Responsiveness and Efficiency

• Electronic Data
Interchanges (EDIs)
• Extranet
16-13


LO3

INFORMATION AND
LOGISTICS MANAGEMENT IN A
CUSTOMER-DRIVEN SUPPLY CHAIN



Total Logistics Cost Concept



Customer Service Concept

16-15


FIGURE 16-3 How total logistics cost varies
with the number of warehouses used based
on inventory costs and transportation costs

16-17

OBJECTIVE OF INFORMATION
AND LOGISTICS MANAGEMENT
IN A SUPPLY CHAIN

• Customer Service Concept
– Customer Service – ability to satisfy users in
terms of time, dependability,
communication, and convenience

Slide 16-21


OBJECTIVE OF INFORMATION
AND LOGISTICS MANAGEMENT
IN A SUPPLY CHAIN
 Time
• Lead Time (Order Cycle or Replenishment Time)
•Recognition of need to order
•Order transmittal
•Order processing
•Documentation
•Transportation
• Quick Response or Efficient Consumer Response
•Reduce retailer’s delivery time
Slide 16-21


OBJECTIVE OF INFORMATION
AND LOGISTICS MANAGEMENT
IN A SUPPLY CHAIN

• Customer Service Concept, cont…
 Dependability – consistency of replenishment and has
3 elements: consistent lead time, safe delivery, and
complete delivery
 Communication – two-way link between buyer and
seller using status reports to monitor service and anticipate
future needs
 Convenience – minimum effort on part of buyer in doing
business and seller must remove unnecessary barriers


OBJECTIVE OF INFORMATION
AND LOGISTICS MANAGEMENT
IN A SUPPLY CHAIN

• Customer Service Standards
– Firms develop set of written standards that
serve as objective and provide benchmark
against which results are measured
– Information is collected on customers’ needs
and competitors’ practices to establish
standards and ongoing monitoring programs

Slide 16-25


FIGURE 16-4 Supply chain managers
balance total logistics cost factors against
customer service factors

16-22


LO3

INFORMATION AND LOGISTICS MANAGEMENT
IN A CUSTOMER-DRIVEN SUPPLY CHAIN
CUSTOMER SERVICE FACTORS



Dependability



Communication



Convenience
16-24


LO3

INFORMATION AND LOGISTICS MANAGEMENT
IN A CUSTOMER-DRIVEN SUPPLY CHAIN
CUSTOMER SERVICE STANDARDS

16-25

LO4

KEY LOGISTICS FUNCTIONS
IN A SUPPLY CHAIN
TRANSPORTATION



Third-Party Logistics Providers



Service Criteria
• Costs

• Dependability

• Time

• Accessibility

• Capability

• Frequency

16-27

KEY LOGISTICS FUNCTIONS IN
A SUPPLY CHAIN
• Third-Party Logistics Providers – provide
most or all of logistics functions of
manufacturers, suppliers and distributors
– Transportation
– Warehousing an materials handling
– Order processing
– Inventory management

Slide 16-29


KEY LOGISTICS FUNCTIONS IN
A SUPPLY CHAIN

• Transportation Service Criteria
 Cost

 Dependability

 Time

 Accessibility

 Capability

 Frequency

Slide 16-29