Ch 1:3------At its core, a business generates, manages, and fulfills customer demand. Businesses easily become blind to this; this blindness will be a theme throughout our discussion this semester.No matter your interest in business function, you should be competent in Marketing & SCM as it is the heart of the business.4------- Business is about providing value to customers—this will result in profit, market share, successThe value chain is Porter’s conceptualization of how businesses provide this value.Let’s look for supply chain in this conceptualizationDo we see logistics management?5--------- Delivering higher levels of Customer Service at a lower cost will lead to a competitive advantage6======== What do we do now when we buy a product? Let’s say a new TV. What is your process?9-------- Used to be that couldn’t have “low cost AND high service”Now we can have the AND…low cost and high service (Superior Customer value) --through SCM have high productivity so have lower costs, and integrated communication and relationship mgmt for higher service/value13---------- The concept and definition of SCM is being continually refined as thought in this area develops.Even as a beginner to business you need to understand the “messiness” of what SCM and Logistics are and how the differences in these definitions impact a person’s “worldview” on business--Key components, across multiple organizations, concept of flow, focus on value to end-customer/consumer--Concept of visualizing the supply chain as a pipeline or a river16--------- Hence we have the Great Divide. This is where many businesses fail. This is UT’s specialty. Thisis a theme of this course and something we expect you to know. Give examples of Shopper Marketing and Supply Chain Forum experiences.17--------- Ok, so this looks really neat. Do NOT think that most businesses have achieved this process. Most screw it up regularly in both familiar and new, creative ways. The goal for our discussion this semester in both BA331 and BA332 is to guide you through the discovery process of what a business enterprise should look like (according to current knowledge) and identify common places for derailment.Ch2.1------- Old Paradigm > New Paradigm > Competitive Advantage > Customer Value > Customer Service > Deliver Time/Place Utility , Condition, and Attitude5--------- If we are asking our customers what they want, we MUST find a way to bridge the great divide.6----------- One of the main points in the chapter/book. SCM and Logistics is all about customer service. Marketing has traditionally not focused on it. They talk about it, but haven’t been oriented toward it. This is why SCM and Logistics is so important in the business.7---- - -- - Use example of Half.com and unreliability in supply chain. Is it worth losing a customer becauseyou saved some money? Focus in many companies today seems to be on getting new customers. High profile jobs in marketing go after new customers. Many companies would be well advised to spend more time retaining their existing customers. Here is where the supply chain either delivers or it doesn’t.8 - -- - - - -- It’s all about the customer! Doesn’t necessarily mean that you always do everything they want, may put yourself out of business, but you must remain focused on their perceptions as a bar of your success. They get to say how well you are doing!9---------- If you order a computer from Dell or CDW and the box is damaged upon arrival are you satisfied?How about if it arrives a day later than promised?How about if you were charged for the 3yr service package when you received the 2yr package?12 --- - - -- - So am I saying that you should make 100% of customers happy all the time. No way! I am saying that customers’ perception of your company is a primary contributor to success/failure. Profit/Shareholder value is what you are after. Companies must devise a strategy for who they are going to make happy and how often. Then they set the standards for how to do that. Then they do it. Then they see how well it is working.Use Delta Airline example to follow through.13======== Delta could make everyone happy—best seats, never bumped, no luggage fees, shorter lines at check-in, etc.But it would cost them a fortune, and Delta is in business to increase shareholder value not provide transportation.14 ----------- At some point the incremental benefit of providing services is outweighed by the additional cost.What is this point? Baggage fees?16 ---- - --- Delta could treat everyone the same. A company could treat every supplier the same.How about Kimberly Clark and Walmart vs. Dollar General?17 --- - - - - - But to a company, most of the time all customers are not created equal18------------- How about Kimberly Clark and Walmart vs. Dollar General?Discuss Delta Skymiles loyalty program here. Segment customersNo baggage fees, shorter lines at check-in, priority boarding, priority seat selection, automatic upgrade if available, priority baggage fees, different phone # to call for reservations and help….19 ------- --- Follow through with KC example with Wal-Mart and Dollar General.Follow through with Delta example.Example of Far Corner Travel Store CustomersEfficient Service—Mark Moon, Standard Senior Citizen Tour GroupsCustomized Service—Mark Moon, annual Sequoyah Hills Tour Group through a friendReview Relationship—Customers that come into the shop, want service, but go to Amazon to buyCentralized Inventory—Sequoyah Hills couple that comes in at random 2-3 times per year and wants quick service and is willing to pay for it.Ch3.4 ---- - - - - If you order a computer from Dell or CDW and the box is damaged upon arrival are you satisfied?How about if it arrives a day later than promised?How about if you were charged for the 3yr service package when you received the 2yr package?13 --------- --- From a more complex view of logistics impact on the bottom-line, we can trace how logistical cost items directly impact financial performance using the Strategic Profit Model developed by DuPont. From this we can see the significant benefits that can result from logistical improvements that reduce cost on the top of the model. For example, a decrease in overall logistics costs will decrease expenses which will increase net profit, net profit margin, and ROA.• We can also see how improved sales which may result from enhanced logistics service can