MARK3001 Lecture 9 Outline of Last Lecture I Ethics in Marketing A Definition of ethics i Why is it important B Definition of laws C What is ethical is not always legal and what is legal is not always ethical D Legal or ethical obligation i Real life situation example E Outcomes i Two models 1 Personal model 2 Business model F Framework for ethical decisions i Four sets of norms ii Societal Norms iii General Business Norms 1 Basic business values a Consumer rights b Caveat emptor 2 Industry standards a The American Marketing Association i Standards set by AMA iv Company Norms v Personal Value Norms 1 Personal moral philosophies a Moral Idealism b Utilitarianism G Level of Responsibility Model 1 Profit Investors Only 2 Stakeholder 3 Societal Outline of Current Lecture I The Supply Chain DIAGRAM 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 II Logistics a Definition b Objective c Usually measured in terms of i Order cycle time ii Product availability iii Order accuracy iv Flexibility v Information d Logistical components of the supply chain i Sourcing and procurement 1 Objective ii Production scheduling 1 Definition 2 Build to stock vs build to order 3 Build to stock example 4 Build to order example iii Order processing 1 Definition 2 EDI a Definition 3 VMI a Definition iv Inventory control 1 Definition 2 Goal v Warehouse and material handling 1 Functions 2 Dedicated Strategy a Definition 3 Random Strategy a Definition vi Transportation 1 Railroads 2 Motor Carriers 3 Pipelines 4 Water 5 Airways III Trends in supply chain management a Advanced computer technology RFID i Example b Outsourcing of logistics functions 3PL s i Explanation of 3PL ii Example c Electronic Distribution IV Relationship of logistics to marketing mix a Example Current Lecture I The Supply Chain sometimes called a value chain or a demand chain Supply Chain Physical Supply Network Physical Distribution Network Raw Materials Components Manufacturing Resellers Consumers II Logistics a The management of the physical flow of items raw materials components and products across the supply chain b Objective of logistics to give the customer the needed level of customer service at the lowest cost c Usually measured in terms of i Order cycle time if not short it needs to be consistent ii Product availability iii Order accuracy do they get the order right iv Flexibility v Information can you track it What s the order s status d Logistical components of the supply chain i Sourcing and procurement 1 Objective obtain the needed supplies in the right quality at the lowest cost Develop long term relationships with suppliers ii Production scheduling 1 Determining method and timing of manufacturing of a mix of products 2 Build to stock vs build to order 3 Build to stock example cereal product availability is good but have to be very accurate in determining the demand 4 Build to order example Europe auto industry less risky for the manufacturer but the product availability is not very high iii Order processing 1 A system for easily receiving orders and accurately and quickly filling them 2 EDI electronic data interchange a Computer to computer exchange of ordering information 3 VMI vendor managed inventory a The vendor decides when to re stock b Vendor has visibility across multiple and often competing companies c Has to keep the store between a range minimummaximum iv Inventory control 1 Maintaining the correct amount of inventory 2 Goal is to meet product availability standards while keeping costs low MRP material resource planning and DRP distribution resource planning systems v Warehouse and material handling 1 Functions a Storing products b Moving products within a facility receiving sorting storing finding getting ready for shipment 2 Dedicated Strategy a Set places for specific things in the warehouse but may not always have enough space for a certain group of things during different seasons ex toys during Christmas season 3 Random Strategy a No designated places for things It can be hard to find stuff but its offers more flexibility with space vi Transportation 1 Railroads most used for inter city 2 Motor Carriers highest degrees of accessibility 3 Pipelines petroleum products 4 Water Mississippi river and Great Lakes are most used 5 Airways relatively fast but not fastest for short trips Pretty expensive Used for high value low density products ex technology like phones III Trends in supply chain management a Advanced computer technology RFID i Ex Peach Pass ii You don t need to have a direct line of sight like you do when checking out and scanning grocery barcodes b Outsourcing of logistics functions 3PL s i Let someone else do all of your logistics 3rd Party Logistics company ii Ex UPS is a huge 3PL s company c Electronic Distribution IV Relationship of logistics to marketing mix a Product characteristics can significantly impact logistics costs ex concentrated fabric softener vs fabric softener with water in it b Logistics must be aware of upcoming promotions c Effective logistics can reduce prices and or increase revenue