McGraw-Hill/Irwin
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Learning Objectives
LEARNING OBJECTIVES

What is supply chain management?

How do supply chains add value?

How does a supply chain work?

How is a supply chain managed?
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Nicole Miller
Nicole
Miller
Retailer
Nicole Miller Website
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Supply Chain Management
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Supply Chain, Marketing Channels,
and Logistics are Related
Marketing channel
Logistics management
Similar but different
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Behind the Scenes at Costco
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Which of the following is a common activity
associated with logistics management?
A.
demand forecasting.
B.
inventory control.
C.
return goods handling.
D.
order processing.
E.
all of the above.
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Supply Chains Add Value
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Supply Chains Streamline
Distribution
Reduce number
of transactions
Increase value
for consumers
More efficient
and effective
FedEx Commercial
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Supply Chain Management
Affects Marketing
Fulfilling delivery promises
Meeting customer expectations
Reliant on an efficient supply chain
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Marketing managers often focus on ____________, while
logistics managers focus on _____________, causing conflict
when trying to provide value to customers.
A.
maximizing sales; minimizing costs
B.
presentation; packaging
C.
cross-tracking; double accounting
D.
minimizing costs; maximizing sales
E.
decentralization; centralization
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Check Yourself
1.
How does supply chain management add
value?
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Information Flows
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Data Warehouse
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Electronic Data Interchange
Advanced
shipping
notice
VendorManaged
inventory
CPFR
Intranet
Extranet
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Pull and Push Supply Chain
Pull
• Orders based on sales
data
• More accurate
inventory
• Better when demand
is uncertain
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Push
• Merchandise allocated
based on forecast
• Does not need
sophisticated IS
system
• Good for steady
demand items
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Check Yourself
1.
What are the various supply chain links
associated with each information flow
step?
2.
What is the difference between push and
pull supply chains?
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Making Merchandise Flow
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Bakery with Conscience
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How does Dell’s Merchandise Flow
How does Dell’s
Merchandise Flow
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Distribution Center vs. Direct Store
Delivery
What are the
advantages of a
distribution center?
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The Distribution Center
Management of inbound transportation
Receiving and checking using UPC and RFID
Storing and Cross-Docking
Getting Merchandise Floor Ready
Preparing to ship
Shipping to store
ABC News Segment on a Walgreens Warehouse
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Inbound Transportation

Dispatcher coordinates
deliveries

Manufacturer may pay
transportation
expenses or retailers
may negotiate directly
with trucking
companies and pay
expenses
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Receiving and Checking
Receiving
Arrival
receipt
Checking
Undamaged
Radio
Frequency
Distribution
(RFID) Tags
Container
computer
chips
Ordered =
received
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Storing and Cross-Docking
Traditional
Cross-docking
Combinations
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Getting Merchandise Floor-Ready
Ticketing and marking
Increasingly firms are forcing
suppliers to ship floor ready
merchandise
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Shipping Merchandise to Stores

Shipping merchandise
to stores is complex
for multi-store chains

Distribution centers
use sophisticated
routing and scheduling
systems
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RFID tags have dramatically reduced the
time and labor associated with:
A.
the Four Ps.
B.
promotion and advertising.
C.
checking and receiving merchandise.
D.
franchising.
E.
demand forecasting.
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Inventory Management Through
Just-In-Time Systems
Just-in-time (JIT)
Quick response (QR)
Zappos Website
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Benefits of JIT Systems
Reduced lead time
Increased product
availability and
lower inventory
investment
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For a JIT system to be successful, the firm and its
vendors need to do all of the following EXCEPT:
A.
cooperate.
B.
compete.
C.
develop EDI systems.
D.
develop CPFR systems.
E.
share data.
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Check Yourself
1.
What happens at each step of the
merchandise flow in a typical supply chain?
2.
Why are just-in-time supply chain systems
becoming so popular?
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Managing the Supply Chain
Supply chain or channel conflict
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Managing Supply Chains Through
Vertical Integration
Independent or conventional supply chain
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Types of Vertical Marketing Systems
Independent or
conventional
supply chain
Administered
vertical marketing
system
Contractual vertical
marketing system
Corporate vertical
marketing system
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Managing Supply Chains Through
Strategic Relationships
Open
Communications
Mutual Trust
Common Goals
Strategic
Relationships
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Relationship of supply chain
members
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Check Yourself
1.
What are the different types of vertical
marketing systems?
2.
How do firms develop strong strategic
partnerships with their supply chain
partners?
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Glossary
Merchandise cartons that are cross-docked are
prepackaged by the vendor for a specific store.
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Glossary
Manufacturers can ship merchandise either directly
to a store or to a distribution center, where it is
then shipped to the store.
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Glossary
Electronic data interchange (EDI) is the computerto-computer exchange of business documents
from a retailer to a vendor and back.
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Glossary
Just-in-time inventory systems are inventory
management systems designed to deliver less
merchandise on a more frequent basis than
traditional inventory systems.
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Glossary
Radio frequency identification (RFID) tags are tiny
computer chips that automatically transmit to a
special scanner all the information about a
container’s contents or individual products.
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Glossary
A strategic relationship or partnering relationship
involves the supply chain members being
committed to maintaining the relationship over
the long term and investing in opportunities that
are mutually beneficial.
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Glossary
Supply chain management is a set of approaches and
techniques firms employ to integrate their suppliers,
manufacturers, warehouses, stores, and transportation
intermediaries into a seamless operation in which
merchandise is produced and distributed in the right
quantities, to the right locations, and at the right time, as
well as to minimize system wide costs while satisfying the
service levels that their customers require.
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Glossary
Vendor-managed inventory (VMI) is an approach
for improving supply chain efficiency in which the
manufacturer is responsible for maintaining the
retailer’s inventory levels in each of its stores.
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