Friday: Distribution network Flashcards
Distribution
Steps taken to move and store a product from supplier stage to customer stage
Vad är relevanta faktorer för kundvärde när det kommer till distribution?
- Response time
- Product variety
- Product availability
- Customer experience
- Time to market
- Order visibility
- Returnability
What response time correllate to required number of facilities?
High number of required facilities: Short response time
Low number of faciltites: longer response time
Name the 4 relevant factors of supply chain costs
Inventories
Transportation
Facilities and handling
Information
Name 2 question to consider when designing a distribution network?
- Will the product be delievered to the customer location or picked up from a prearranged site?
- Will the product flow through an intermediary or intermediate location?
What are the design option for a distribution network. Name 6
- Manufacturer storage with direct shipping
- Manufacturer storgae with direct shipping and in-transit merge
- Distributor storgare with carrier delivery
- Distributor storage with last mile delivery
- Manufactorer/distributor storage with customer pickup
- Retail storage with customer pickup
Describe Manufacturer storage with direct shipping and in-transit merge. Also give an example
Combination of pieces of the order coming from different
locations so the customer gets a single delivery
- Low transportation costs but high handling costs
- Low-medium demand
- High value items
Ex. Customer o rders a TV from LG and surrond system from Bose from Elgiganten, that delivers it in a combined package
Describe Manufacturer storage with direct shipping. Also give an example
Product is shipped directly from the manufacturer to the end customer
- Not stored by retailer
- High-vaue, low demand items
- Critical aspect: response time
Ex. Volvo sells cars directly to their customers, Apple sells products in their store
Distributor storage with carrier deilvery
Inventory at distributors / retailers in intermediate warehouses
- Are sent out by carriers directly to the customer
- Low transportation cost
- Slow- to fastmoving items
- Ex. Online Farmacy stores, sends out items from big warehouse storages
Distributor storage with last-mile delivery
Also give an example
The distributor / retailer delivers the product to the customer’s home
- Large customer orders
- Customers are more willing to pay more since its convenient
- Better response time
- Example Mathem, that delivers groceries directly to their customers home and then goes to several customers
Manufacturer or distributor storage with customer pickup
Also give an example
Inventory is stored at the manufacturer or distributor warehouse and then delivered to designated pickup points for customer s to get their orders
+ Low inventory cost and trasportation cost
- increased processing cost and potential errors
at the pickup sit
Ex. instabox, amazon pickup
Describe Retail storage with customer pickup, give an example
Inventory is stored locally at retail stores and then retrieved by customers
- Fast- moving items or items for which customers value rapid response
- Lack of aggregayion –> high inventory cost
- Issues: low product variety, product availability cost, high time to market
How does online sales impact customer service?
- Response time: High for physical products but low for digital
- Product variety: High
- Product availability: improvement
- Customer experience: better in terms of time, location, buying experience
- Time to market: faster
- Order visibility: crucial aspect
- Returnability: Critical issue: reverse logistics cost
- Direct sales to customer
- Pricing, product portfolio and promotions: flexible and effective
- Funds transfer: efficient
How does online sales impact costs?
- Inventory: low cost
- Facilities: low cost
- Transportation: low costs for digital product, high outbound costs (external)
- Information: money on marketing and communication
What factors can influence the network design decisions?
PESTEL/SWOT tänket
Stetegic, technological, macroeconomic, political, infrastructure, competitive, socio-economic, customer response, logistics
