Supply Chain Management Supply Chain Management & economies of distribution& economies of distribution

Presented byPresented byB.sai kiranB.sai kiran12NA1E0036 12NA1E0036

Definit ions…Definit ions…

A supply chain consists of all stages A supply chain consists of all stages involved, directly or indirectly, in involved, directly or indirectly, in fulfilling a customer request. The fulfilling a customer request. The supply chain not only includes the supply chain not only includes the manufacturer and suppliers, but also manufacturer and suppliers, but also transporters, warehouses, retailers, transporters, warehouses, retailers, and customers themselves – Chopra and customers themselves – Chopra and Meindland Meindl

…… Supply Chain Supply Chain ManagementManagement

Supply chain management is the Supply chain management is the coordination of production, inventory, coordination of production, inventory, location, and transportation among the location, and transportation among the participants in a supply chain to participants in a supply chain to achieve the best mix of achieve the best mix of responsiveness and efficiency for the responsiveness and efficiency for the market being served – author.market being served – author.

Logistics vs SCMLogistics vs SCM

Logistics refers to activities that occur within Logistics refers to activities that occur within the boundaries of a single organization and the boundaries of a single organization and supply chains refer to networks of supply chains refer to networks of companies that work together and companies that work together and coordinate their actions to deliver a product coordinate their actions to deliver a product to market.to market.

SCM acknowledges all of traditional logistics SCM acknowledges all of traditional logistics and also includes activities such as and also includes activities such as marketing, new product development, marketing, new product development, finance, and customer service.finance, and customer service.

Company Actions in SCCompany Actions in SC

Companies in any SC must take Companies in any SC must take decisions individually and collectively decisions individually and collectively regarding their actions in five areas:regarding their actions in five areas:

ProductionProduction InventoryInventory LocationLocation TransportationTransportation Information Information

ProductionProduction

The fundamental managerial decision is The fundamental managerial decision is how to resolve trade-off between how to resolve trade-off between responsiveness and efficiency.responsiveness and efficiency.

Factories can be built to accommodate one Factories can be built to accommodate one of two approaches to manufacturing; of two approaches to manufacturing; product focus or functional focus.product focus or functional focus.

Warehousing can also be done using any of Warehousing can also be done using any of three approaches; stock keeping unit, job lot three approaches; stock keeping unit, job lot storage, or cross-docking.storage, or cross-docking.

InventoryInventory

Inventory is spread throughout the supply Inventory is spread throughout the supply chain and includes everything from raw chain and includes everything from raw material to work in progress to finished material to work in progress to finished goods.goods.

There are three basic decisions to make There are three basic decisions to make regarding the creation and holding of regarding the creation and holding of inventory; cycle inventory, safety inventory, inventory; cycle inventory, safety inventory, and seasonal inventory.and seasonal inventory.

LocationLocation

Location refers to the geographical sitting of supply Location refers to the geographical sitting of supply chain facilities.chain facilities.

It also includes the decision related to which It also includes the decision related to which activities should be performed in each facility.activities should be performed in each facility.

The responsiveness versus efficiency trade-off here The responsiveness versus efficiency trade-off here is the decision whether to centralize activities in is the decision whether to centralize activities in fewer locations to gain economies of scale and fewer locations to gain economies of scale and efficiency, or to decentralize activities in many efficiency, or to decentralize activities in many locations close to customers and suppliers.locations close to customers and suppliers.

Location decisions have strong impacts on the cost Location decisions have strong impacts on the cost and performance of supply chain.and performance of supply chain.

TransportationTransportation

Transportation refers to the movement Transportation refers to the movement of everything from raw material to of everything from raw material to finished goods between different finished goods between different facilities in a supply chain.facilities in a supply chain.

Different modes of transportation are: Different modes of transportation are: ship, rail, pipelines, trucks, airplanes, ship, rail, pipelines, trucks, airplanes, and electronic transportation.and electronic transportation.

Information Information

All decisions are based on timely All decisions are based on timely availability of information regarding availability of information regarding other four supply chain drivers.other four supply chain drivers.

Information is used for two purposes in Information is used for two purposes in supply chain; coordinating daily supply chain; coordinating daily activities and forecasting and planning activities and forecasting and planning to anticipate and meet future to anticipate and meet future demands.demands.

Participants of Supply Participants of Supply ChainChain

ProducersProducers DistributorsDistributors RetailersRetailers CustomersCustomers Service ProvidersService Providers

Distribution ChannelDistribution Channel

Channel of distribution have a broad impact on the Marketing program Channel of distribution have a broad impact on the Marketing program

of any firm, because it is one of the most important component of of any firm, because it is one of the most important component of

Marketing-Mix. The other components of marketing mix are Product, Marketing-Mix. The other components of marketing mix are Product,

Price and Promotion.Price and Promotion.

DefinitionDefinition

The main objective of distribution strategy is getting the right goods to The main objective of distribution strategy is getting the right goods to

the right place at the right time at the least possible cost. In other words the right place at the right time at the least possible cost. In other words

we can also define distribution channel as a way of moving goods from we can also define distribution channel as a way of moving goods from

the point of production to the point of consumption.the point of production to the point of consumption.

Classification/Types of Channel of DistributionClassification/Types of Channel of Distribution

Direct ChannelsDirect Channels

    Own Retail shopsOwn Retail shops

Personal selling (door to door)Personal selling (door to door)

Mail order sellingMail order selling

Automatic vendingAutomatic vending

Franchised shopsFranchised shops

Telephone selling (Telemarketing)Telephone selling (Telemarketing)

Exclusive Stores/Specialty StoresExclusive Stores/Specialty Stores

E-marketingE-marketing

Classification/Types of Channel of DistributionClassification/Types of Channel of Distribution

Indirect ChannelsIndirect Channels Merchandise Agents and Brokers – Works on Commission basisMerchandise Agents and Brokers – Works on Commission basis

Merchandise Wholesalers or trade channelsMerchandise Wholesalers or trade channels

– Manufacturer/ProducerManufacturer/ProducerConsumer/End UserConsumer/End User

– Manufacturer/ProducerManufacturer/ProducerWholesalerWholesalerConsumer/End UserConsumer/End User

– Manufacturer/ProducerManufacturer/ProducerRetailerRetailerConsumer/End UserConsumer/End User

– Manufacturer/ProducerManufacturer/ProducerWholesaler/DistributorWholesaler/DistributorRetailerRetailerConsumer/End Consumer/End User User

– Manufacturer/ProducerManufacturer/ProducerWholesaler/DistributorWholesaler/DistributorSemi-Semi-wholesalerwholesalerRetailerRetailerConsumer/End UserConsumer/End User

– Manufacturer/ProducerManufacturer/ProducerAgent/BrokerAgent/BrokerRetailerRetailerConsumer/ End User Consumer/ End User

Conclusion:Conclusion:

Finally I conclude that supply chain Finally I conclude that supply chain management is necessary to every management is necessary to every business but promoting with an business but promoting with an efficient way will leads to business efficient way will leads to business development..development..

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