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1. Chapter 11 Distribution Customer Service and Logistics Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved
2. Marke&ng Strategy Planning Process 11-2
3. The Role of Logis&cs and Physical Distribu&on Customer Service in Marke&ng Strategy (Exhibit 11-1) CH 12: Retailers, Wholesalers & Their Strategy Planning Logistics customer service •  What is it? •  Level to offer •  Cost •  JIT and EDI Transporting •  Transportation modes •  Benefits and limitations Storing •  Storage & strategy planning •  Inventory costs •  Storage facilities •  Distribution centers CH 11: Distribution Customer Service & Logistics CH 10: Place & Development of Channel Systems 11-3
4. Physical Distribu&on Gets It to Customers Logistics or Physical Distribution 11-4
5. Physical Distribu&on Customer Service 11-5
6. Trade-Offs among Physical Distribu&on Costs, Customer Service Level, and Sales (Exhibit 11-2) Customer service level (percent of customers served within some time period—say, four days) *Note: Sales may be lost because of poor customer service or because of the high price charged to pay for too high a customer service level. Total cost of physical distribution Inventory cost Lost sales* Transportation cost 0 0 Cost 90% 11-6
7. Physical Distribu&on Concept Focuses on the Whole Distribu&on System (Exhibit 11-3) Factors Affec,ng PD Service Levels Info on Product … Order Processing … … Procedures … Storage Order … … in Transit … Status Information Advance Info on … Delivery Time … … with Customers … Deliveries …Handling 11-7
8. Coordina&ng Logis&cs Ac&vi&es … … … 11-8
9. BeQer Informa&on Helps Coordinate PD Electronic Data Interchange Continuously Updated Information Systems Areas Where Computers Help PD Service 11-9
10. Ethical Issues May Arise Product Availability •  … about delivery speed •  Selling products that are … •  Running out of … Coordination of PD • … delays in order confirmation • … of holding inventory 11-10
11. 11 Supply Chains Supply Chain The connected chain of all of the …, both internal and external to the company, that … the logistics function 1
12. 12 Supply Chains Supply Chain Management A management system that … all of the activities performed by supply chain members into a … process, from the … to the point of …, resulting in enhanced … 1
13. 13 Supply Chain Managers The philosophy behind supply chain management is that by … the entire supply chain, supply chain managers can … at each level of the process to create a highly competitive, customer-driven supply system that is able to … to changes in supply and demand. 1
14. 14 Supply Chain Management Physical flow process that engineers the … Communicator … from point of sale to supplier 1
15. 15 Benefits of Supply Chain Management Supply chain oriented companies commonly report: •  … •  Greater supply chain flexibility •  Improved … •  Higher revenues •  Increased performance and … 1
16. 16 Advanced Computer Technology •  Automatic identification systems •  … •  … •  Communications technology •  Supply chain … 5
17. Electronic Distribution a distribution technique that includes any kind of product or service that can be distributed electronically, whether over traditional forms such as … of electronic signals. 5 17
18. 18 Green Supply Chain Management •  Requires integrating green thinking into all phases of the supply chain – Green materials sourcing – Environmental impact of packaging, shipment, use – Incorporate end-of-life management •  Recycling •  Clean disposal 5
19. the process of strategically managing the efficient … of raw materials, …, and … from point of origin to point of consumption. Logistics is… Logistics 4 19
20. 20 Logistical Components of the Supply Chain Supply Chain Team Sourcing & Procurement Production Scheduling Order Processing Inventory Control Warehouse & Materials Handling Transportation Logistics Information System 4
21. 21 Sourcing and Procurement u  Plan purchasing … u  Develop … u  Select … u  Negotiate … u  Reduce … The Role of Purchasing: © iStockphoto.com/Maria Toutoudaki 4
22. 22 Just-in-Time Manufacturing A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials at the … they are needed on the production line. JIT 4
23. 23 Benefits of JIT §  For manufacturers: … §  For suppliers: … §  For customers: … 4
24. Order processing is becoming more automated through the use of computer technology known as …EDI). a system whereby orders are entered into the supply chain and filled. 4 An Order Processing System is… 24
25. Inventory Control Inventory Control System A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand 4 25
26. 26 Warehousing and Materials Handling Most manufacturers today have moved to AUTOMATED materials-handling systems to minimize the amount of handling. 4 Materials- Handling System a method of moving inventory … of the warehouse.
27. The Transpor&ng Func&on Adds Value to a Marke&ng Strategy (Exhibit 11-4) 11-27
28. 28 Transportation Airways Water Pipelines Motor Carriers Railroads 4
29. 29 Transportation Mode Choice §  … §  … §  … §  … §  … §  … 4
30. Exhibit 14.1 Criteria for Ranking Modes of Transportation 30