Chapter_16 - CHAPTER 16 1 1 The Bullwhips Sting a Bullwhip...

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C HAPTER HAPTER 16 16 1. The Bullwhip’s Sting a. Bullwhip – too much or too little inventory to satisfy customer needs, missed production schedules, and ineffective transportation or delivery caused by miscommunication among material suppliers, manufacturers, and resellers of consumer and industrial good b. Sting – poor customer service and lost revenue and profit opportunities 2. Logistics – activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost a. Logistics Management – organizing the cost-effective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements i. Emphasis on supply and channel partnering b. 3 Elements i. Logistics deals with decisions needed to move a product from the source of raw materials to consumption, or flow of product ii. Decisions have to be made in cost-effective manner iii. Firm needs to drive down logistics costs as long as it can deliver expected customer service (satisfying customer requirements) c. Role of Mgmt – see customer needs satisfied in most cost-effective manner d. Getting right items needed for consumption or production to right place at right time in right condition at right cost is beyond individual capacities/controls of companies i. Collaboration, coordination, information sharing among manufacturers, suppliers, distributors, necessary to create seamless flow of goods and services to customers 3. Supply Chains vs. Marketing Channels a. Supply Chain – sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users i. Includes suppliers that provide raw material inputs to manufacturer as well as wholesalers and retailers that deliver finished goods ii. Sequence of linked suppliers and customers in which every customer is a supplier to another customer until a finished product reaches final consumer b. Supply Chain Management – integration and organization of information and logistics activities across firms in supply chain for purpose of creating and delivering goods and services that provide value to consumers i. IT allows companies to share and operate systems for order processing, transportation scheduling, and inventory and facility management Logistics Management Suppliers Inbound flow of raw materials and parts Producer Outbound flow of finished products Consumer Supplier Network Marketing Channel Supply Chain Management 4. Aligning a Supply Chain with Marketing Strategy a. Understand Customer 1
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This note was uploaded on 05/04/2009 for the course MNGMT 332 taught by Professor Grid during the Spring '09 term at Montclair.

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Chapter_16 - CHAPTER 16 1 1 The Bullwhips Sting a Bullwhip...

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