Supply Chain Management Place Distribution Decision

SUPPLY CHAIN MANAGEMENT

SUPPLY CHAIN

The handling of the entire production

flow of a good or service — starting from
the raw components all the way to
delivering the final product to the

A company creates a network of suppliers

(“links” in the chain) that move the
product along from the suppliers of raw
materials to those organizations that deal
directly with users.
 The firm uses a series of value-adding activities to connect the
company’s supply side with its demand side.

The perspective encompasses all products, information ,and funds

that form one cohesive link to acquire, purchase(e.g., of raw
materials), convert/manufacture and assemble the finished product,

SUPPLY CHAIN distribute goods and services to the ultimate consumer, and monitor
the post purchase consumer behavior.

MANAGEMENT
The implementation effects of such supply chain management
systems can be major. Efficient supply chain design can increase
customer satisfaction and save money at the same time.

SELLER PRODUCER CUSTOMER

Raw Material
Energy Components from seller Received the finished product
Services Furnished goods
Components
PlanningSourcingManufacturingDelivery and LogisticsReturning

1.2.3.4.5.

HOW DOES SUPPLY CHAIN MANAGEMENTWORK?

THERE ARE FIVE COMPONENTS OF TRADITIONALSUPPLY CHAIN MANAGEMENT

SYSTEMS:

1. PLANNING
2. SOURCING
3. MANUFACTURING
4. DELIVERY AND LOGISTICS
5. RETURNING
 PLANNING

Plan and manage all resources required to

meet customer demand for a company’s
product or service.

When the supply chain is established,

determine metrics to
measure whether the supply chain is efficient ,
effective, delivers value to customers and meets
company goals.
SOURCING

Choose suppliers to provide the goods

andservices needed to create the product.

Then, establish processes to monitor and

manage supplier relationships.

Key processes include: ordering, receiving,

managing inventory and authorizing
supplier payments.
MANUFACTURING

Organize the activities required to accept

raw materials, manufacture the product,
test for quality, package for shipping and
schedule for delivery.
DELIVERY AND LOGISTICS

Coordinate customer orders,

schedule deliveries, dispatch
loads, invoice customers and
receive payments.
RETURNING
Create a network or process to takeback defective, excess or unwanted products.

WHY IS SUPPLY CHAINMANAGEMENT IMPORTANT?

Effective supply chain management systems minimize cost, waste and time in the production cycle. The
industry standard has become a just-in-time supply chain where retail sales automatically signal
replenishment orders to manufacturers. Retail shelves can then be restocked almost as quickly as
product is sold. One way to further improve on this process is to analyze the data from supply chain
partners to see where further improvements can be made.

SUPPLY CHAIN MOTTO:

"Getting the Right Thing, to the

Right Place, at a Right Time"
SCM VS. SUPPLY CHAINS

A supply chain is the network of individuals, companies, resources,

activities, and technologies used to make and sell a product or
service .A supply chain starts with the delivery of raw materials from
a supplier to a manufacturer and ends with the delivery of the

SCM oversees each touchpoint of a company's product or service,

from initial creation to the final sale. With so many places along the
supply chain that can add value through efficiencies or lose value
through increased expenses, proper SCM can increase revenues,
decrease costs, and impact a company's bottom line.

PLACE- DISTRIBUTION DECISION

PHYSICAL DISTRIBUTION
 In the marketing mix, the process of moving
products from the producer to the intended user.

It is also called placement anddistribution.

In other words, it is how your productis bought and

where it is bought.

Place element is a process by which the goods are

transferred from the place of production to the place
of consumption.

PLACE OF THE 4P OFMARKETING

Place refers to the important decisions related

to the physical distribution of goods and
services.

These decisions focuses on where the

business is located, where the target market is
placed, how best to connect this two, how to
store goods in the interim and how to
eventually transport them.

Place mix include:

1. channels of distribution

2.physical distribution/physical movement

of goods.
 PLACE OF THE 4P OFMARKETINGS

Place signifies the distribution part.

This movement could be through a combination of

intermediaries such as distributors, wholesalers, and
retailers.

In modern times, internet has also emerged as a place.

PLACE OF THE 4P OFMARKETING

WHAT IS ADISTRIBUTION CHANNEL? PRODUCER

A distribution channel moves aproduct WHOLESALER

through the stages fromproduction to final
consumption.
RETAILER

CUSTOMER
 DISTRIBUTION CHANNEL

A channel of distribution comprises of a

set of institutions which perform all of
the activities utilized to move a product
and its title from production to
consumption Bucklin Theory of
distribution channel structure 1966 .

A channel of distribution comprisesof a set of institutions which performall of the activities utilized to
movea product and its title fromproduction to consumption BucklinTheory of distribution
channelstructure 1966 .

CHANNEL CAN HAVE VARIOUS LEVELS

Each party in a distribution channel is called an "intermediary"

PRODUCER PRODUCER PRODUCER

WHOLESALER DISTRIBUTORS
/ AGENTS

RETAILER

CUSTOMER CUSTOMER CUSTOMER

MAIN OBJECTIVE OFDISTRIBUTION

To make products available in

the right place at the right time
in the right quantities and at
the right cost.

KEY QUESTIONS THATINFLUENCE

DISTRIBUTIONDECISIONS

Where do customers buy and who

from? How do customers buy?

Sell direct or use intermediaries

Is technology changing traditional
(distribution channels)?
distribution methods?
 PLACE DECISIONS INVOLVE:

Studying geographical concentration of customers.

Studying types of distribution channels and channel

members.

Analyzing various relevant factors affecting channel

decisions.

PLACE DECISIONS INVOLVE:

Selecting suitable channel of distribution.

Strategic decisions related to distribution

activities.

Physical distribution including

transportation, communication, warehouse,
inventory control, insurance, banking, etc.
 PLACE DECISIONS INVOLVE:

Balancing distribution costs and selling price.

Designing a suitable distribution network, and

long-term distribution strategies

Developing and adapting logistics management for

effective distribution of products.

PLACE MIX

PLACE MIX ELEMENTS

Channel of Distribution refers to those

people and companies who help in
distributing the goods and services from
place of manufacturing to place of
consumption.

PLACE MIX ELEMENTS

PHYSICAL DISTRIBUTION: It involves planning , implementing, and controlling the physical flow

Of goods and services and related information from producers to the customers.