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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
Seventh Lectureon
CHANNELS & SCM
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 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
Conventional vs. Vertical Marketing System
A A distribution channel structure in whichdistribution channel structure in which
producers,producers,
wholesalers,wholesalers,
and retailersand retailers
act as a act as a unified systemunified system
..
Distribution channels options & design pattern for B2B &B2C
MNUFACTURER
CUSTOMERS
STOCKISTSAGENTS
DEALERS/DISTRIBUTORS
RETAILERS
DIRECT MARKETING ( OEM)
channel selection is depended
product type, regional coverage & customer type
Performance evaluation parameters for channel members(Minimize cost & Maximize profits )
New customers serviced
Market feed back
Average inventory
levels
Customer satisfaction
vs. complaints
Customer Delivery
performance
Sales quotaV /s
achieved
Channel Member
Evaluation
MARKETING
TEAM
MARKET&
CUSTOMER
FEED BACK
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
Process of supply chain & logistics management
Purchase of Raw materials
CompSpares, etc
Production planning
Inventory controlProcessing, customer
Orders,Packing,
Dispatches, etc
Transportation,Warehousing,
Distribution to channel Members,Dispatches
to customers.
Customer service,Performance evaluation,
Market feed backFollow up by sales force
Raw material sourcing, Production planning
Transportation, Distribution&
Customer servicing
What is the extent of outsourcing of supply chain activities?
0 10 20 30 40 50 60 70 80 90 100
Transportation
Warehousing
Manufacturing
Information Systems
Import/Export Mgmt
Procurement
Customer Service
Order Processing
Inventory Management
Percentage Number of Respondents
YesNo
Supply Chains Supply Chains ImplementationImplementation
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%
Supply Chain: Components of Cost Of Sales & Distribution Margins
Direct Cost : Cost Of Raw Material +Conversion Cost Into Finished Product +PackagingDistribution & marketing +Transportation +Cost Of Distribution (Margins) + Inventory Cost/Warehouse Cost +Cost Of ServicingOther fixed costs + marketing/ selling Costs + other fixed costs( depreciation, interest, etc) +Taxes/duties Profit Margins
Selling Price To The Customers