Purchasing Flashcards
Strengths & Disadvantages of highway
Strengths:
- Flexibility to deliver where and when needed
- Often the best balance among cost, flexibility and reliability/speed of delivery
Weaknesses: Neither the fastest or cheapest option
Strengths & Disadvantages of water
Highly cost-effective for bulky items
Most effective when linked to a multi modal system
Limited locations
Relatively poor delivery reliability/speed
Strengths & Disadvantages of rail
Highly cost-effective for bulky items
Can be most effective when linked to a multi modal system
Limited locations, less than water Better reliability/speed of delivery than water
Strengths & Disadvantages of air
Quickest mode of delivery
Flexible, especially when linked to highway mode
Often most expensive mode on a per-pound basis
Multi modal solution
Transportation solution that seeks to exploit the strengths of multiple transportation modes through physical, information monetary flows that are as seamless as possible
Roadrailer ➔ Specialized rail car the size of a standard truck that can be quickly switched from rail to ground transportation without changing the wheels
Warehousing
➔ Any operations that stores, repackages, stages, sorts or centralizes goods or materials
● Reduce transportation costs
● Improve operational flexibility
● Shorten customer lead times
● Lower inventory-related costs
Consolidation warehousing
warehousing that pulls together shipments in the same geographic area and combines them into larger and more economical loads
◆ Example: cross-docking, break-bulk, hub-and-spoke system
Postponement warehousing
combines classic warehouse operations with light manufacturing and packaging duties to allow firms to put off final assembly or packaging of goods until the last possible moment
Types of Warehouses
Assortment warehouses ➔ Form of warehouses in which a wide array of goods is held close to the source of demand in order to assure short customer lead times
Spot stock warehouses ➔ Form of warehouses that attempts to position seasonal goods close to the marketplace
Assortment warehouses
wide array of goods is held close
Spot stock warehouse
attempts to position seasonal good close
Logistics Information Systems
Decision support tools
• Real-time simulation and optimization
• Cost estimations
Planning systems
• Carrier selection
• Scheduling deliveries
Execution systems
• RFID
Material handling system
A system that includes the equipment and procedures needed to move goods
packaging
The way goods and materials are packed in order to facilitate physical, informational, and
monetary flows through the supply chain
Marketing channel
Exchange relationships that create customer value in the acquisition, consumption and disposition of products and services
The economic rationales for marketing channels
● The efficiency rationale for intermediaries
● The discrepancy of assortment and sorting
● Routinize
● Searching
Functions in marketing channels
● Carrying of inventory ● Demand generation ● Physical distribution ● After-sale service ● Extending credit to customers
Flows in marketing channels
- Physical possession - Ownership
- Promotion - Negotiation
- Financing - Risking
- Ordering - Payment
Distribution Objectives and Related Marketing Strategies
Account development
Distributor support
Account development
● Increase availability relative to competitors
● Gain access to new segment
● Increase ability to buy
Distributor support ● Increase inventory ● Increase consumption rate ● Reduce competitive opportunities ● Increase promotional support
Distribution Objectives and Related Marketing Strategies
Account maintenance
Account penetration
Account maintenance
● Assure user satisfaction
● Reduce competitive opportunities
● Simplification
Account penetration
● Increase consumption rate and purchase volume
● Head-to-head competition
● Complementary product sales
Power Bases in Distribution
reward
coercive
expert
Reward ➔ Ability to offer product with low prices, quantity discounts
Coercive ➔ Ability to withdraw product
Expert ➔ Ability to offer superior or needed technical assistance
Power Bases in Distribution
referent
legitimate
Referent ➔ Ability to offer prestige brand name
Legitimate ➔ Contractual provision that requires distributor to carry full line
result-oriented of evaluating distributors
● Sales volume ● Sales volume as a percentage of quota ● Sales profitability ● Number of new accounts ● Number of stock-outs ● Percentage volume increase in key accounts ● Number of customer complaints ● Number of lost accounts
effort-oriented of evaluating distributors
● Number of sales calls made
● Number of checks on re seller stocks
● Number of inquires followed up
● Number of demonstrations completed
