Lecture 3

9. LOGISTICS DISTRIBUTION AND SALES

Definition of distribution logistics, its importance Distribution Logistics - Is the management of transportation, warehousing and logistics operations all occurring in the process of bringing SE to the consumer in accordance with the interests and demands of the latter, as well as transmission, storage and processing of relevant information. In summary, the distribution logistics can be considered in the following two aspects: 1. 2. as the study of the needs of the market (marketing); as means and methods best meet these needs through the

effective organization of freight forwarding, warehousing processes, customer service. The fundamental difference distribution logistics from the traditional approach to marketing and sales is as follows: objectives; System interconnection of processes of distribution, production submission to the management of IP marketing goals and

and procurement; distribution. The importance of distribution logistics in the fact that improving the work in the area of distribution of goods does not require large additional investments such as, for example, developing the production of new goods, and thus provides a highly competitive supplier by reducing cost, reducing lead time, compliance with systemic interconnectedness of all functions within the

the agreed delivery schedule . Funds invested in the sphere of distribution, affect the position of the supplier in the market is much stronger than the same money invested in the sphere of production. That is, high competitiveness does not depend on the magnitude of capital investments, and the ability to organize the logistics process.

Tasks distribution logistics Distribution logistics tasks: at the micro level

- Planning the implementation of the goods; - The organization of production and order processing; - Select the type of packaging, making decisions about the availability, organization of operations prior to shipment; - Organization of shipment of the product; - Arrange delivery and monitoring of transportation; - Organization poslerealizatsionnogo service. at the macro level

- Select the pattern MP (channel bringing products to the consumer); - Determination of the optimal number of RC (warehouses); - Determining the optimal location of the RC (warehouses) in the service area, etc.

Horizontal and vertical distribution channels Logistics channel - This is a partially ordered set of different mediators (organizations or individuals) engaged in bringing MP from a specific manufacturer to its customers. Once the choice is made, the specific actors in the movement of MP, the logistics channel is converted into the logistic chain. The use of intermediaries in the distribution of products enables manufacturers to: reduce the amount of work and funding for the distribution of products; invest the savings in primary production, selling products in more efficient ways, more effectively bring products to target markets. Traditional distribution channels are the horizontal. They consist of an independent producer and one or more independent brokers. Each channel member is a separate entity, seeking to secure the maximum profit. The maximum possible profit the individual participant can channel to the detriment of profit-maximizing system as a whole, since no member of the channel has a complete or sufficient control over the activities of other members. Vertical distribution channels - A channel consisting of producer and one or more intermediaries, acting as one unified system. One of the participants in the channel, as a rule, or is the owner of the other participating companies, or to provide them with certain privileges. Such party may be a manufacturer, wholesaler or retail broker. Vertical channels have emerged as a means of controlling the behavior of the channel. They are economical and eliminate duplication of functions performed Members channel.

Types of intermediaries in the distribution channels Classification of the mediators conduct in two ways (Table 9.1): 1. on whose behalf the intermediary is working; 2. for whose account the intermediary conducts its operations.

Table 9.1 Types of intermediaries in the distribution channels Type of intermediary Dealer Distributor Broker An agent, broker Symptom classification On my own behalf and at his own expense On behalf of others, and at his own expense On my own behalf and for others On behalf of others and for others

Dealers - Is the wholesale (retail less) mediators that lead the operation on its own behalf and at his own expense. The dealer is the owner of the goods after full payment for the delivery. The relationship between the manufacturer and the dealer be terminated after all the conditions of the supply contract. In the supply chain dealers occupy a position closest to the end users. Distributors - Wholesale and retail brokers, the leading manufacturer of process on behalf and at his own expense. Typically, the manufacturer offers the distributor the right to market their products in a certain area and within a certain period. Thus, the distributor does not own the product. Under the contract they acquired the right to sell products. Distributor may act on its behalf. In this case, under a contract for the right to sell a contract of supply. In the supply chain distributors usually take place between the manufacturer and dealers. Commissioners - A wholesale and retail brokers, leading the operation on its own behalf and at the expense of the manufacturer. The commission does not own the products sold. The manufacturer (or consignor in the operation) is the owner of the goods prior to its transfer and payment of the final consumer. Contract for the supply of goods is on behalf of the commission. The commission is obliged to preserve goods. Remuneration paid to the commission generally in the

form of interest on the amount of the operation or the difference between the price assigned by the Principal and the sale price. Agents - Intermediaries, acting as a representative or assistant of another primary in relation to him the face (Principal.) Typically, agents are legal entities. The agent enters into transactions on behalf of and at the expense of the principal. By the volume of office agents fall into two categories. Universal agent make any legal action on behalf of the principal. General agent enter into transactions only mentioned in the power of attorney. Agents for their services are being paid as at the rates and as a percentage of the amount of the deal. Brokers - Intermediaries in transactions that reduce contractors. Brokers do not own the product, as dealers or distributors and not dispose of products, such as distributors, agents or commissioners. Unlike agents, brokers are not in a contractual relationship with any of the parties and deals are valid only on the basis of individual orders. Brokers are rewarded only for the sold products. Their income can be generated as a percentage of cost of goods sold or as a fixed fee per unit sold goods. What factors should be considered when choosing a site for a distribution center? Choosing Placements RC is a hierarchical decision-making process, shown in Fig. 9.1.

In Fig. 9.1. The hierarchy of decisions in choosing the location of the RC

When choosing placements, consider the following factors: The location of the customers. The location of suppliers and materials.

The attitude of the authorities and their plans. Local authorities can seriously change the attractiveness of the area through the promotion of some specific industries. Should be familiar with the peculiarities of local law, with opportunities to attract local investment.

Direct and indirect costs. Using this factor, keep in mind that low wages in the region may also be accompanied by low productivity and quality, or vice versa. In addition, it is necessary to take into account local taxes, social and pension benefits, control of property of the company (for example, through control of the local partner in foreign exchange and repatriation of profits abroad).

The attitude of the public. Different countries have different attitudes to methods of ensuring high productivity, for example, high turnover

and absenteeism may be a general phenomenon, a different number of employees in the ranks of trade unions, different attitudes to the importance of collective and individual achievements in their work.

The size and configuration of the site. A large number of vehicles servicing the input and output streams, requires adequate space for parking, maneuvering, travel. Their absence could lead to congestion, loss of time and customers. In addition, on the premises should accommodate office, sanitary facilities, security post, a device for collecting and processing waste, etc.

Transport access areas. For example, when placing the RC should be preferred sites located on the main (trunk) roads. Equipment should be analyzed territory other modes of transport, including public, on which the availability of the RC for their own staff and for customers.

Competitors their number, strength, location. The potential expansion or make changes. The situation in the local labor marketThe number of employees, their qualifications and performance.

Political stability.

Natural conditions: climate, terrain, presence and character of reservoirs, the possibility of natural disasters.

There is a factor that should not be used in solving the problem of accommodation, - manager's personal preferences. Sometimes managers are choosing the area where they grew up or once rested. Such a choice is a priori is not bad, but it often becomes so because its main drawback - low reliability due to the lack of objective analysis of the location.

The problem of determining the number of warehouses in the service area The most important element is the drug warehouse network, through which the distribution of the MP. The construction of this network has a significant impact on costs involved in the process of bringing goods to the consumer, and therefore the final cost of goods sold by. So if there is only storage (Fig. 9.2 a) transportation costs for delivery of goods to consumers will be very high. In the case of the five depots (Fig. 9.2, c) transportation costs will be minimal tovarosnabzheniyu, but increased other expenses, namely: the cost of shipping goods to the warehouses to manage this entire distribution system. There is a possibility that the additional cost in this case exceed the benefit gained from reducing the mileage of transport, delivering goods to consumers. Perhaps it may be an acceptable option with two warehouses (Fig. 9.2, b).

In Fig. 9.2. Organization of the distribution of MP with a different number of warehouses The dependence of the total operating cost of the distribution system (Lobsch) the number of warehouses (N) is shown in Fig. 9.3, where Ltr - the cost of short-range transportation related to the delivery of goods from warehouses to

customers; Ld.tr - the cost of long-distance transportation related to the delivery of goods to the warehouse distribution system; Lzap - the cost of maintaining stocks; Leksp - costs associated with running warehousing; Lupr - costs associated with managing storage facilities.

In Fig. 9.3. The dependence of the total cost of the number of warehouses

10. LOGISTICS RESERVES

The reasons for stockpiling Inventory (MOH) - Is at different stages of production and circulation of products for industrial purposes, of consumer products and other goods, pending the entry into the process of production or personal use. The reasons for creating MOH include: 1) the possibility violation of the established schedule Supply (A negative consequence - stop the production process); 2) the possibility fluctuations in demand (A negative consequence - pent-up demand, loss of profits, image); 3) seasonal variations in production some goods at a relatively uniform consumption, for example, cleaning and consumption of potatoes (consequence the need to accumulate goods for subsequent uniform distribution throughout the year); 4) the ability uniform production operations and distribution (availability of stocks of finished products smooths out fluctuations in the intensity of production, the result - the uniformity of product distribution and the presence of inventory smooths fluctuations in the supply of raw materials and semifinished products, the result - the uniformity of the production process). 5) discounts for the purchase large lot of goods, the ability to profit from speculation in anticipation of a sharp rise in commodity prices; 6) costs of ordering: Search for supplier negotiations, travel, long distance, etc. (Consequence - the need to increase the ordered party, and hence the stock);

7) the need for immediate service customers (goods issue of stock faster than produce or purchase, which increases the competitiveness of the enterprise); 8) minimizing downtime production due to lack of spare parts (Especially for companies with a continuous production process); 9) simplify the management of production (Availability of inventories may help reduce the degree of consistency of manufacturing processes that reduces costs for the organization of control of these processes).

The cost of creating and storing supplies The cost of creating and storing supplies frozen funds spent on the purchase of MR; costs of the specially-equipped rooms; pay special staff; losses due to spoilage and theft of inventory.

Types of stocks Classification in relation to logistics operations / functions Stocks in the supply - Is the material resources at the logistics channels (circuits) from suppliers to warehouses of material resources producers, designed to ensure the production of finished products.

Productive reserves - Formed in the organizations of the consumer, this stock of material resources and work in progress available for the consumers and not subjected to processing plants located in the sphere of material production, intended for industrial consumption and ensures uninterrupted production process. Marketing (trade) stocks organizations are at the manufacturers of finished goods in warehouses, as well as in the channels of the circulation, it's finished goods inventory, transportation stocks, which are in the warehouses of the manufacturer and the GP in the distribution network and available for sale. Stocks - Inventories of products that are in storage of different types and levels of certain parts of the logistics system, as intra-and logistics intermediaries. Transportation stocks (stocks in transit, transit stock) - A stock of material resources, work in process or finished goods in transit from one to another, or ZLS within a ZLS. Materials handling - This is a specific warehouse stock, which is formed without the logistical operations of storage (eg, congestion in one transport node from one mode to another, consolidating, sorting, etc.). Classification of Functionality Current reserves - Correspond to the level of stock in any given account. It may coincide with the maximum desirable stock, the threshold level or security stocks. It is intended to ensure continuity of production or distribution between two successive deliveries. Insurance (warranty reserve) - Designed to reduce the logistical and financial risks associated with unanticipated fluctuations in demand for finished products, failure to fulfill contractual obligations to supply material resources (violation of the terms in the supply, quality of delivered MP, etc.), failures in production and technology cycles, and other unforeseen circumstances. Safety stock is constant and in normal conditions - untouchable.

Preparatory stock - Part of the production (supply) reserve, designed to prepare the material resources and finished goods to the production or personal consumption. The presence of this type of stock by the need to perform certain logistics operations for receiving, clearance, loading and unloading, additional training (Unloading, cleaning, drying, straightening, etc.) to consume. Seasonal stocks - A stock of material resources and finished products, created and supported by explicit seasonal variations in demand or the nature of production and transportation. Seasonal stocks should ensure the normal operation of organizations and continuity of the production of consumption at the time of seasonal break in production, consumption and transportation. Stocks of finished products to promote formed and maintained in a distribution channel for quick response to the ongoing marketing strategy by moving goods to market, usually accompanied by widespread publicity in the media.

In Fig. 10.1.

1. 2.

The above-described basic system of KM based on fixing one of two possible options - the size of the order or the time between orders. But in the presence of systematic failures in the supply and consumption of major systems of KM become ineffective. Various combinations of the basic systems of ultrasonic units with the addition of innovative ideas leads to the possibility of forming a large number of other systems of KM that meet the diverse requirements.

The most common modifications of the basic dynamical systems KM system include: 1. at appropriate intervals to replenish a constant level; 2. "Minimum-maximum". Ultrasound system at specified intervals to replenish the constant level

The main idea. In this system, orders are made not only in the fixed scheduled times, but when the margin threshold. Order quantity is determined on the basis of replenishment stock to the maximum desired level, respectively, from the current or the threshold level of reserves (including consumption for the time of delivery).

KM system "minimum-maximum" The main idea. In this system, orders are made at fixed targets at times, but on condition that the current stock at this point is equal to or less than the minimum (threshold) level. Order quantity is determined on the basis of replenishment stock to the maximum desired level (taking into account the consumption time of delivery).