Marketing chapter 16a customer driven supply chain logistics management

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc All Rights Reserved LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 16, YOU SHOULD BE ABLE TO: LO1 Recognize the relationship between marketing channels, logistics, and supply chain management LO2 Describe how a company’s supply chain aligns with its marketing strategy 16-2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 16, YOU SHOULD BE ABLE TO: LO3 LO4 Identify the major logistics cost and customer service factors that managers consider when making supply chain decisions Describe the key logistics functions in a supply chain 16-3 LO1 SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT KEY CONCEPTS  Supply Chain  Supply Chain Management  The Automotive Supply Chain 16-4 LO1 SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT KEY CONCEPTS  Logistics  Logistics Management • Cost-Effective Flow • Customer Requirements = Service 16-5 FIGURE 16-1 Relating logistics management and supply chain management to supplier networks and marketing channels 16-6 The Supply Chain Logistics You are here FIGURE 16-2 The automotive supply chain includes thousands of firms that provide the 5,000 or so parts in a typical car 16-9 FIGURE 16-A Paint industry supply chain 16-10 LO4  CLOSING THE LOOP: REVERSE LOGISTICS Reverse Logistics 16-43 Logistics Logistics consists of those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost 16-44 Logistics Management Logistics management is the practice of organizing the costeffective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements 16-45 Supply Chain A supply chain consists of a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users 16-46 Supply Chain Management Supply chain management is the integration and organization of information and logistic activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to consumers 16-47 Electronic Data Interchanges (EDIs) Electronic data interchanges (EDIs) combine proprietary computer and telecommunication technologies to exchange electronic invoices, payments, and information among suppliers, manufacturers, and retailers 16-48 Total Logistics Cost Total logistics cost consists of expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return goods handling 16-49 Customer Service Customer service is the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience 16-50 Lead Time Lead time is the lag from ordering an item until it is received and ready for use or sale Also called order cycle time or replenishment time 16-51 Quick Response Quick response, in inventory management systems, are designed to reduce the retailer’s lead time for receiving merchandise which then lowers a retailer’s inventory investment, improves customer service levels, and reduces logistic expenses Also called efficient consumer response 16-52 Efficient Consumer Response Efficient consumer response, in inventory management systems, are designed to reduce the retailer’s lead time for receiving merchandise which then lowers a retailer’s inventory investment, improves customer service levels, and reduces logistic expenses Also called quick response 16-53 Third-Party Logistics Providers Third-party logistics providers are firms that perform most or all of the logistics functions that manufacturers, suppliers, and distributors would normally perform themselves 16-54 Just-In-Time (JIT) Concept The just-in-time (JIT) concept is an inventory supply system that operates with very low inventories and requires fast, on-time delivery 16-55 Vendor-Managed Inventory (VMI) Vendor-managed inventory is an inventory-management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items 16-56 Reverse Logistics Reverse logistics is a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal 16-57 ... making supply chain decisions Describe the key logistics functions in a supply chain 16-3 LO1 SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT KEY CONCEPTS  Supply Chain  Supply Chain Management. .. the Customer • Understand the Supply Chain • Harmonize the Supply Chain with the Marketing Strategy 16-11 LO2 SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT SUPPLY CHAIN MANAGEMENT AND MARKETING. .. 16-A Paint industry supply chain 16-10 LO2 SIGNIFICANCE OF SUPPLY CHAIN AND LOGISTICS MANAGEMENT SUPPLY CHAIN MANAGEMENT AND MARKETING STRATEGY  Aligning a Supply Chain with Marketing Strategy