การจัดการช่องทางการจัดจำหน่าย Distribution Channel Management Chapter 13 Logistic and Supply Chain Management

Chapter 13 Outlines Learning Objectives Understand the meaning of Logistics with its relation to Supply Chain Management Know the Logistics management based on the Systems Concept and the Total Cost Approach Understand the Supply Chain Management concept Describe the critical elements of Efficient Consumer Response and Quick Response as the approach to - Understand why channel management is needed to implement the supply chain management paradigm in an organization

Logistics and Supply Chain Management Points of Discussion What is the meaning of Logistics and what is its boundary? How is Logistics related to Supply Chain Management concept?

Logistics and Supply Chain Management The definition of Logistics - According to Kotler’s definition, Logistics is defined as “Planning, implementing, and controlling the physical flows of materials and final goods from points of origin to points of use to meet customers’ needs at profit”

Logistics and Supply Chain Management The scope of Logistics - Logistics concerns the processing and tracking of goods during warehousing, inventory control, transport, customs documentation and delivery to customer - Logistics is widely considered to be part of supply chain management

Logistics System and Basic Components

Logistics and Supply Chain Management The concept of Supply Chain Management (SCM) - Cover any physical inputs, not just finished goods - Involve every element of the value-added chain - Route to market should coordinate with manufacturing process - Upstream element not only inventories of finished goods, but also WIP and raw material of suppliers, suppliers

Logistics and Supply Chain Management The concept of Supply Chain Management (SCM) - Downstream covers all channel members down to customers of customers - Signal the very beginning of the chain what to do, when to do it as a function of what happen at the very end of the chain of distribution

Primary Activities and Costs A Typical Company Value Chain Primary Activities and Costs Sales & Marketing Outbound Logistics Service Inbound Logistics Operations Profit Margin Product R&D, Technology, Systems Development Human Resources, General Management and Firm Infrastructure Support Activities and Costs

Logistics and Supply Chain Management Requirements for the firms to service customers efficiently 1. A market orientation – focused on last customer 2. Effective channel management to enable smooth transfer of product and information 3. Effective logistics

Efficient Consumer Response (ECR) ECR calls for cooperation from entire channel members to improve on these four areas 1. A continuous replenishment program (CRP) – by using purchase data of the final buyer to inform all upstream supply chain members to end the bullwhip effect 2. Efficient pricing and promotions – that can push higher sales without problems of over stocking and degrading of brand equity

Efficient Consumer Response (ECR) ECR calls for cooperation from entire channel members to improve on these four areas 3. Changes in product introduction – having more accurate forecast on new product introduction through market research information 4. Changes in merchandising – an effort to find better ways to merchandise brands and associated product categories

Efficient Consumer Response (ECR) Obstacles to efficient consumer response - ECR requires standardization of methods and implementation is a long and expensive affair - Trust and good working relationships are necessary for information exchange among members - ECR requires considerable change in internal operations - Teamwork must become permanent

Rapid or Quick Response (QR) The elements concerning with QR It’s another approach to supply chain management It’s originated from the fashion industry - It’s fundamental pull system idea

Rapid or Quick Response (QR) The same and contrast between ECR and QR - What to make and what to ship quickly based on customer purchase data - Emphasis on inter-firm cooperation - When mistakes are made, catch them soon and mark them down quickly - Difference coming from the volatile, unpredictable nature of business involved (FMCG VS. Fashion industries) - ECR focuses on shipments and promotions while QR focuses more on flexible manufacturing techniques

Supply Chain Management Approach Points of Discussion Between QR and ECR, which model is better? - QR – keep manufacturing design flexible, not focus on minimizing transportation costs - ECR – fix design, control cost tightly - Both are pull systems but differ in how and when they react

Type of goods for Supply Chain Management

Type of goods for Supply Chain Management Functional goods VS. innovative products The keys to supplying functional goods are efficient manufacturing and logistics cost The keys to innovative products are speedy market responses, critical information flows

Type of goods for Supply Chain Management

Logistics and Supply Chain Management Two critical elements to build a Supply Chain Management mentality in an organization 1. An internal culture of cross-functional integration (as opposed to functional silos) 2. Effective channel management – trust, good working relations, the judicious exercise of power