1. Seventh Lecture on CHANNELS & SCM
Case Examples of channel net work for some products
Channel Management
Distribution channels options & design pattern for B2B &B2C
Supply Chain Management: Objectives
Process of supply chain & logistics management

2. Case Examples of channel net work for some products
INDUSTRY
PRODUCT
CHANNELS FOR CUSTOMER
Textile industry
Fabrics
Mills to dealers/ wholesalers/ to retailers/garment units
Steel
Iron ore
coal
Direct from mine owners to steel mills
Steel products
Stockist, dealer, retailer and customer (small)
Stockist, dealer and customer( big builders)
Direct to OEM
Capital goods
Industrial machines
Direct to the customers(industries) and/or through agents
Automobiles
Commercial vehicles/ passenger cars
Dealers & company show rooms
Electronics
Consumer durables
company show rooms/ & through dealers to retail outlets
Banking
Banks
Branches

3. Channel Management Channel management Selection Motivation Training
Evaluation
Managing conflict

4. Conventional vs. Vertical Marketing System
A distribution channel structure in which
producers,
wholesalers,
and retailers
act as a unified system .

5. Distribution channels options & design pattern for B2B &B2CM N U F A C T R E
DIRECT MARKETING ( OEM) C U S T O M E R
RETAILERS
DEALERS/
DISTRIBUTORS
STOCKISTS
AGENTS
channel selection
is depended
product type, regional coverage
& customer type

6. Performance evaluation parameters for channel members (Minimize cost & Maximize profits )
MARKET
&
CUSTOMER
FEED
BACK M A R K E T I N G
TEAM

7. Supply Chain Management

8. Supply Chain Management: Objectives
Main Objectives
Smooth flow of goods from factory to customers
Cost reduction in supply chain system
Production planning
Minimum inventory
Timely delivery
Packaging should ensure safe delivery/ no loses

9. The Supply Chain of a Manufacturing Company

10. Process of supply chain & logistics management
Transportation,
Warehousing,
Distribution
to channel
Members,
Dispatches
to customers.
Production planning
Inventory control
Processing,
customer
Orders,
Packing,
Dispatches, etc
Customer service,
Performance evaluation,
Market feed back
Follow up by sales force
Purchase of
Raw materials
Comp
Spares, etc
Raw material sourcing, Production planning
Transportation, Distribution
&
Customer servicing

13. What is the extent of outsourcing of supply chain activities?
Inventory Management
Yes No
Order Processing
Customer Service
Procurement
Import/Export Mgmt
Information Systems
Manufacturing
Warehousing
Transportation 10 20 30 40 50 60 70 80 90
100
Percentage Number of Respondents

14. Supply Chains Implementation
What are the benefits achieved by supply chain implementation?
Measurable Indicators
Extent of Improvement
1. Sales Revenue Increased
20.2%
2. Profits Increased
15.5%
3. Order to Delivery Cycle time Reduced
32.8%
4. Inventory Reduction
a. Raw Material
25.1%
b. WIP
38.7%
c. Finished Goods
32.1%
5. On Time Delivery Improved
33.4%
6. Customer Base Increased
27.7%

15. Supply Chain: Components of Cost Of Sales & Distribution Margins
Direct Cost :
Cost Of Raw Material
+Conversion Cost Into Finished Product
+Packaging
Distribution & marketing
+Transportation
+Cost Of Distribution (Margins)
+ Inventory Cost/Warehouse Cost
+Cost Of Servicing
Other fixed costs
+ marketing/ selling Costs
+ other fixed costs( depreciation, interest, etc)
+Taxes/duties
Profit Margins
Selling Price To The Customers

16. THANK YOU