Unit 6: Logistics and the Supply Chain Mrs. Brink Marketing Principles

Supply Chain The supply chain encompasses the steps it takes to get a good or service from the supplier (producer) to the customer Involves channel! Managing the chain=logistics! https://www.youtube.com/watch?v=VCh6HnXHKRc

Choosing Transportation Methods A huge part of logistics involves transportation! Also called Physical Distribution Railroads Trucks Ships and boats Airplanes Pipelines

Railroads Inexepensive Good for moving heavy products and large loads Raw materials, industrial equipment, large shipments of consumer goods Limited accessibility—must stay on the tracks Slow

Trucks Quick! Can reach almost any location Good for local shipments and across country Can handle large or small shipments Some manufacturers own their own trucks

Ships and Boats International distribution Can handle large shipments Relatively inexpensive compared to other modes of transportation Very slow

Airplanes The quickest form of transportation VERY EXPENSIVE Smaller shipments use commercial planes, larger shipments use cargo planes Good for products that spoil quickly or need special care

Pipelines Only used to transport resources Oil, water, natural gas Can transport resources over extremely long distances Alaskan Pipeline Very expensive to build and maintain

Storage and Product Handling Storage is very important! Can help channel member to balance supply and demand Warehouses Distribution centers Packaging

Warehouses Building designed to store large amounts of raw materials Can be public or private Public warehouses are smaller facilities Private warehouses can be purchased to hold large quantities

Distribution Centers Used to accumulate products from several sources then regroup, repackage, and send out Large retailers have many of these Walmart Must be quick and efficient to cut back on storage and transportation costs Amazon.com http://www.bloomberg.com/video/a-look-inside-amazon-com-on-cyber-monday-eMrV5BmpQ_O1Uf5BkyzD6A.html

Packaging Form of storage and promotion MUST PROTECT THE PRODUCT Aids in effective transportation, storage and use of product MUST PROTECT THE PRODUCT Retail products—can distinguish from competition and give competitive edge