The connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function.
Supply Chain Management
A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value.
Benefits of Supply Chain Management
-Lower inventory, transportation, warehousing, and packaging costs
-Greater supply chain flexibility
-Improved customer service
-Increased performance and profitability
Supply Chain Integration
Occurs when multiple functional areas coordinate business processes to seamlessly link to one another. A systems approach where the overall performance of the chain is greater than the sum of its parts.
Under the DSI philosophy, those functional areas in the company charged with creating customer demand communicate frequently and are synchronized with the parts of the business charged with fulfilling the created demand.
The ability of two or more companies to develop social connections that serve to guide their interactions when working together.
The performance assessment of the supply chain as a whole that also holds each individual firm or business unit accountable for meeting its own goals.
Technology and planning integration
The creation and maintenance of information technology systems that connect managers across and through the firms in the supply chain.
Material and service supplier integration
Requires firms to link seamlessly to those outsiders that provide goods and services to them so that they can streamline processes and provide quality customer experiences.
A competency that enables firms to offer long-lasting, distinctive, value-added offerings to those customers who represent the greatest value to the firm or supply chain.
composed of bundles of interconnected activities that stretch across firms in the supply chain. They represent key areas that some or all of the involved firms are constantly working on to reduce cost or generate revenues for everyone throughout supply chain management
Key Business Processes
-Customer relationship management
-Customer service management
-Manufacturing flow management
-Supplier relationship management
-Product development and commercialization
Customer Relationship Management (CRM)
allows companies to prioritize their marketing focus on different customer groups according to each group’s long-term value to the company or supply chain.
Customer Service Management
this process presents a multi-company, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced.
this process seeks to align supply and demand throughout the supply chain by anticipating customer requirements at each level and create demand-related plans of action prior to actual customer purchasing behavior.
this process is a highly integrated process, often requiring persons from multiple companies and multiple functions to come together and coordinate to create customer satisfaction at a given place and time.
Manufacturing Flow Management
this process is concerned with ensuring that firms in the supply chain have the needed resources to manufacture with flexibility and to move products through a multi-stage production process.
Supplier Relationship Management
this management process supports manufacturing flow by identifying and maintaining relationships with highly valued suppliers.
Product Development and Commercialization
this processes include the group activities that facilitates the joint development and marketing of new offerings among a group of supply chain partner firms
this process enables firms to manage volumes of returned product efficiently, while minimizing returns-related costs and maximizing the value of the returned assets to the firms in the supply chain.
Supply Chain Functions
Orchestrating the physical means through which products move it is critical to any supply chain.
Supply managers plan strategies, develop specifications, select suppliers, and negotiate price and service levels. The goal of most supply management activities is to reduce the costs of raw materials and supplies.
A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand. The goal of inventory management is to keep inventory levels as low as possible while maintaining an adequate supply of goods to meet customer demand.
A system whereby orders are entered into the supply chain and filled.
Smart RFID (radio-frequency identification)
an inventory handling and tracking system that employs radio-frequency electromagnetic fields to transfer and read product data via an electronic tag, is another type of advanced computer technology that is helping companies manage their supply chains.
A hybrid strategy that takes advantages from build-to-stock and build-to-order strategies.
a method of moving inventory into, within, and out of the warehouse.
Supply Chain Technology
The logistics information system serves as the link connecting all of the operational components
of the supply chain.
involves the integration and balancing of environmental, social, and economic thinking into all phases of the supply chain management process.
A distribution technique that includes any kind of product or service that can be distributed electronically, whether over traditional forms such as fiber-optic cable or through satellite transmission of electronic signals.
Products that are out of stock and therefore unavailable to customers when they want them.
represents the accumulated supply of goods which have been obtained for future use or sale to satisfy demand.
safety (buffer) stock
extra inventory held in addition to cycle stock as insurance against unexpected demand increase
Material moving between two or more locations, usually separated geographically; for example, finished goods being shipped from a plant to a distribution center.
An inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer.
distribution resource planning (DRP)
an inventory control system that manages the replenishment of goods from the manufacturer to the final consumer
automatic replenishment program
real time inventory system that triggers shipments only when a good is sold to the end user
supply chain resiliency
the ability of a supply chain to bounce back from disruptions and continue operations in a timely and effective manner
can be viewed as a large pipeline through which products, their ownership, communication, financing and payment, and accompanying risk flow to the consumer.
everyone who get involved in the process
Retailers simplify distribution by cutting the number of transactions required by consumers, making an assortment of goods available in one location.
An institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them.
Wholesaling intermediaries who facilitate the sale of a product by representing channel members. do not take title to goods
A form of distribution aimed at having a product available in
A form of distribution achieved
by screening dealers to eliminate all but a few in any single area.
A form of distribution that
established one or a few dealers within a given area.
Arm’s Length Relationship
Fulfills a one time or unique need; low involvement/risk
Formal contract without capital investment/long-term commitment; “happy medium”
Closely bonded relationship; explicitly defined relationships
A channel member’s capacity to control
or influence the behavior of other channel members.
A situation that occurs when one marketing channel member intentionally affects another member’s behavior.
A member of a marketing channel that exercises authority and power over the
activities of other members.
The joint effort of all channel members to create a channel that serves customers and creates a competitive advantage
Owned by a single person or partnership and not part of a larger retail institution.
Owned and operated as a group by a single organization.
The right to operate a business or to sell a product.
Product and Trade Name Franchising
Dealer agrees to sell in products provided by a manufacturer or wholesaler.
An ongoing business relationship between a franchiser and a franchisee.
Spot new communication opportunities
The Promotional Mix
A combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. The promotional mix includes: Advertising (you pay for),
Public Relations (you don’t pay for),
Advertising (paying for it)
Most commonly distributed by traditional media, though increasingly through non-traditional media, such as Web sites, e-mail, blogs, and interactive video kiosks in malls and supermarkets.
Public Relations (not paying for it)
Evaluates public attitudes, identifies areas within the organization that public may be interested in, and executes a program to earn public understanding.
Marketing activities—other than personal selling, advertising, and public relations—that stimulate consumer buying and dealer effectiveness.
Planned presentation to one or more prospective buyers for the purpose of making a sale.
Attempts to persuade the buyer into a specific point of view; creates a win-lose outcome.
Long-term relationships; creates a win-win outcome.
Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message.
Integrated Marketing Communications
The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer.
No physical object makes it hard to communicate benefits.
Production and consumption are simultaneous, meaning the consumer takes part in production.
Services depend on their employees for quality, which makes consistency difficult to achieve.
Services cannot be saved, and it is challenging to synchronize supply and demand.
The most basic benefit the consumer is buying.
A group of services that support or enhance the core service.
A strategy that uses technology to deliver customized services on a mass basis.
Maximize the surplus of income over costs
Match supply and demand by varying price
Maximize the number of customers by varying price
Treating employees as customers and developing systems and benefits that satisfy their needs.
An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment.
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