MKTG 350 1st Edition Lecture 17 Current LectureSupply Chain and Channel Management Supply chain management- a set of approaches and techniques that firms use to integrate suppliers, manufactures, warehouses, stores, and transportation intermediaries so that products are distributed in the right quantity to the right location at the right time while minimizing cost. Wholesaler/ middle man- people that are in the middle of the channel of distribution – buys theproduct from the manufacture – they are more efficient at moving the product – mark up the price of the product (eliminates risk from the manufacture)Brokers and agents- facilitate the sale between the buyer and the seller Marketing channels add value- Number of transactions - Increasing value for consumers- More efficient and effective Marketing channel- members of the supply chain – doing the work (companies or people who are moving the product) Logistics management- the activities that are preformed by the members of the channel Examples: customer service, demands forecasting, distributor communication, inventory control, materials handling, order processing, parts and service support, plant and site selection, procurement, packaging, handle the return on goods, transportation, warehousing and storage. Other aspects- Fulfilling delivery promises- Meeting customer expectations- Reliant on an efficient supply chin Adjusted time system- raw materials arrive at the factory just in time for a production run – onlythe amount that they need Quick response system- finished goods are being delivered just in time for the relator to sell them These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Distribution center- owned by the retailer Designing marketing channels1. Direct channel- manufacture customer2. Indirect channel in intermediary—manufacture retailer customer3. Indirect channel 2 intermediaries- manufacture wholesaler retailer customer Vertical marketing system-***1. Administered vertical marketing systema. Different members of the channel realize it is in their best interest to work together to serve the customerb. A dominant member of the channel (usually the retailor- because they know what the customers are willing to buy) 2. Contractual vertical marketing systema. A legal contract – legally have to work together (franchises) 3. Corporate vertical marketing system a. Different levels of the channel are actually owned by the same companyb. Manufacture (far removed) retailor so they open up their own retail firm c. Lilly Pulitzer, d. Forward integration- when a manufacture opens up its own retail shope. Grocery stores- own their own farm (backward integration) retailor starts then opens a manufacturing plant 4. Independent channel, traditional, or conventional a. No relationship between manufacture and different members of the channelb. Every member of the channel works alone to make as most profit as they can Strategic relationships- Mutual trust- Open communication- Common goals- Interdependence- Credible commitmentsData warehouse- - SKU- stock keeping unit (very specific product – see how its selling) Electronic data interchange- computer-to-computer communication (automatic purchases – lessmistakes) - Cycle time- the amount of time from when you order the product until it reaches the store - Easily analyzed and used - - Quality communicationsVendor-managed inventory- make sure that enough of their merchandise is in the stores (people who are stocking the shelves) – convenience items Push- pull- Push- merchandise is replenished on the basis of demand- Merchandise is allocated based on forecast- Does not need sophisticated IS system - Good for stead demandPull- Orders based on sales data- More accurate inventory- Better when demand is uncertain - Less likely to have items overstocked- More costly – buy better for fluctuating demandDistribution center1. Management of inbound transportation- coordinate the drop-offs 2. Receiving and checking using UPC and RFEID- make sure the merchandise is actually showing up a. RFID- micro chips imbedded in the product so it can be tracked 3. Storing and cross- dockinga. Some items are going straight to store – take across the dock – to the truck to getto the store b. Other items are stored 4. Getting merchandiser floor readya. Want the sales people to be selling and not preparing the items 5. Preparing to ship 6. Ship to