Supply Chain management is the integration and organization of information and logistics activities across firms in a Supply Chain. A company must identify the needs of the customer segment being served 2. Understand the Supply Chain 3. Harmonize the Supply Chain with the targeted customer's needs and its marketing strategy.
Supply Chain management is the integration and organization of information and logistics activities across firms in a Supply Chain. A company must identify the needs of the customer segment being served 2. Understand the Supply Chain 3. Harmonize the Supply Chain with the targeted customer's needs and its marketing strategy.
Supply Chain management is the integration and organization of information and logistics activities across firms in a Supply Chain. A company must identify the needs of the customer segment being served 2. Understand the Supply Chain 3. Harmonize the Supply Chain with the targeted customer's needs and its marketing strategy.
Significance of Supply Chain and Logistics Management
Relating Marketing Channels, logistics, and Supply Chain Management Logistics-involves those activities that focus on getting the right amount of the right procedures to the right place at the right time at the lowest possible cost Logistics Management- the practice of organizing the cost-effective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements Supply Chains versus Marketing Channels Supply chain- a sequence of firms that perform activities required to create and deliver a product or service to ultimate consumers or industrial users Supply Chain management- the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering products and services that provide value to the ultimate consumers Global Suppliers and Supply Chains Global suppliers provide ingredients in processed food, materials and parts in cars and trucks, components in consumer electronics, textiles and dyes in clothing and the list goes on Supply Chain Management and Marketing Strategy Aligning a Supply chain with a marketing strategy There are a variety of supply chain configurations, each of which is designated to perform different tasks well Follow 3 steps 1. Understand the consumer a company must identify the needs of the customer segment being served 2. Understand the supply chain- a company must understand what a supply chain is designed to do well 3. Harmonize the supply chain with the marketing strategy- a company needs to ensure that what the supply chain is capable of doing well is consistent with the targeted customers needs and its marketing strategy EXAMPLES Dell: a Responsive Supply Chain The dell marketing strategy primarily targets customers who desire have the most up-to-date computer systems customized to their needs Walmart: An effective supply chain Walmarts marketing strategy is to be a reliable, lower price retailer for a wide variety of mass consumption consumer goods
Objective of information and logistics management in a customer-driven supply
chain The objective of information and logistics management in a customer-driven supply chain is to minimize logistics costs while delivering maximum customer service Informations Role in Supply Chain Responsiveness and Efficiency A variety of technologies are used to transmit and mange information in a supply chain Electronic data interchange (EDI)- combines proprietary computer and telecommunication technologies to exchange electronic invoices, payments, and information among suppliers, manufacturers, and retailers Total Logistics Cost Concept Total logistics cost- includes expenses associated with transportation, materials handling and warehousing, inventory, stock-outs, order processing, and return good handling Customer Service Concept Customer service- the ability of logistics management to satisfy users in terms of time, dependability, communication , and convenience Time- in a supply chain setting, time refers to LEAD TIME for an item, which means the lag from ordering an item until it is received and ready for use or sale Quick response- emphasis on making the process of reordering and receiving products as simple as possible, often through electron data inventory systems Dependability- the consistency of replenishment Communication- a two-way link between buyer and seller that helps in monitoring service and anticipating future needs Convenience- means that there should a be a minimum of effort on the party of the buyer in doing business with the seller Key Logistics Functions in a Supply chain Four key logistic functions in a supply chain include 1.) Transportation 2.)Warehousing and materials handling 3.) Order processing and 4.) Inventory management Many companies have outsourced these functions to third-party logistics providers Third-party logistics providers- firms that perform most or all of the logistics functions that manufacturers, suppliers, and distributors would normally perform themselves Reasons for Inventory- carrying inventory has been justified on several grounds 1. To offer a buffer against variations in a supply and demand, often caused by uncertainty in forecasting demand 2. To provide better service for those customers who wish to be served on demand
3. To promote production efficiencies
4. To provide a hedge against price increases by suppliers 5. To promote purchasing and transportation discounts 6. To protect the firm from contingencies such as strikes or shortages Supply Chain Inventory Strategies Just-in-time concept- an inventory supply system that operates with very low inventories and requires fast, on time delivery Vendor-managed inventory (VMI)- an inventory management system whereby the supplier determines the product amount and assortment a customer needs and automatically delivers the appropriate items Closing the Loop: Reverse Logistics Reverse Logistics- a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal