STRATEGIC SUPPLY

CHAIN MANAGEMENT
DR.FIANKO
GROUP PRESENTATION
BY; AYILGIA DERRICK JEROME
NYARKO ISAAC
QUESTION 1
 CUSTOMER NEEDS
Response time: This refers to how quickly a distribution network can fulfill
customer orders or respond to customer inquiries. It involves minimizing the time
between when an order is placed and when it is delivered to the customer.

Product variety: Customers often have diverse preferences, requiring distribution

networks to accommodate a wide range of products. Designing a network that can
efficiently handle various product types, sizes, and configurations is essential.
 CUSTOMER NEEDS
Product availability: Ensuring products are consistently available when and
where customers need them is crucial for customer satisfaction.
 Customer experience: Beyond simply delivering products, the overall
customer experience plays a significant role in loyalty and satisfaction.
Distribution network design should incorporate factors such as packaging
quality, order accuracy, and communication throughout the order fulfillment
process to enhance the customer experience.
 CUSTOMER NEEDS
Order visibility: Providing customers with real-time visibility into the status
of their orders fosters transparency and trust. That is the use of tracking
systems that will enable customers to keep up with the status of their order.

Returnability: distribution networks should be able to facilitate hassle-free

returns, including reverse logistics capabilities, return centers etc.
 COST OF MEETING THOSE NEEDS
inventories: Inventory costs are a significant consideration in distribution
network design. This includes carrying costs associated with storing
inventory, such as warehouse space, utilities, insurance, and taxes.

Transportation: Transportation costs encompass the expenses incurred in

moving goods from suppliers to warehouses, between facilities, and
ultimately to customers. Factors influencing transportation costs include
shipping modes (e.g., trucking, rail, air, sea), distances traveled, fuel prices).
 COST OF MEETING THOSE NEEDS
Facilities and handling: : Facility and handling costs refer to the expenses associated
with establishing and operating distribution centers, warehouses, and fulfillment
center including all the cost involved in picking materials, packaging materials, and
equipment cost.

Information: this refers to the expenses associated with acquiring, processing, and
managing data and information related to the distribution network. This includes
investments in information technology (IT) systems, software applications, data
analytics, and communication infrastructure.
QUESTION 2
DIRECT SALES
 : Selling products directly to customers without intermediaries, typically
through company-owned retail stores, e-commerce platforms, or direct sales
teams.
 Features
 - Products sold directly to customers without intermediaries.
 - Control over pricing, branding, and customer relationships.
 - Direct interaction with customers for feedback and market insights.
 DIRECT SALES
 Advantages
 Higher profit margins due to bypassing intermediaries.
 Greater control over the customer experience.
 Flexibility to adapt marketing strategies and product offerings.
DIRECT SALES
 Disadvantages
 Requires significant investment in sales infrastructure (e.g., stores, websites,
sales teams).
 Limited geographic reach compared to wholesale or retail distribution.
 Higher marketing and customer acquisition costs.
WHOLESALE DISTRIBUTION
Selling products in bulk to wholesalers, who then distribute them to retailers or other
businesses. This option allows for wider market reach without directly managing
retail operations.
 Features
 Selling products in bulk to wholesalers who then distribute to retailers or
businesses.
 Reach a broader market through wholesale partners.
 Lower individual transaction costs compared to direct sales.
WHOLESALE DISTRIBUTION
 Advantages
 Access to a wider customer base without managing retail operations.
 Reduced marketing and sales expenses compared to direct sales.
 Streamlined order processing and fulfillment through wholesale channels.
 Disadvantages
 Lower profit margins due to selling at wholesale prices.
 - Less control over pricing and branding compared to direct sales.
 - Dependence on wholesalers for effective distribution.
RETAIL DISTRIBUTION
 : Selling products directly to retailers, who then sell them to end consumers
through brick-and-mortar stores, online platforms, or catalogs.
 Features
 Selling products directly to retailers for resale to end consumers.
 Products sold through various retail channels such as brick-and-mortar
stores, online platforms, or catalogs.
 Direct exposure to end consumers and retail markets.
RETAIL DISTRIBUTION
 Advantages
 Access to a diverse network of retail partners and distribution channels.
 Increased brand visibility and exposure to consumers.
 Potential for higher sales volumes through retail outlets.
 Disadvantages
 Lower profit margins due to selling at wholesale prices to retailers.
 Limited control over pricing and presentation in retail stores.
 Need to manage relationships with multiple retail partners.
DISTRIBUTORSHIP
Appointing independent distributors or agents to sell products on behalf of the company.

Distributors purchase products at wholesale prices and sell them to retailers or end consumers,

often in specific geographic areas or markets.

 Features
 Appointing independent distributors or agents to sell products on behalf of the company.
 Distributors purchase products at wholesale prices and resell to retailers or end consumers.
 Distributors operate in specific geographic areas or markets.
 DISTRIBUTORSHIP
 Advantages
 Extended geographic reach through distributor networks.
 Lower marketing and sales expenses compared to direct sales.
 Distributors provide local market knowledge and customer relationships.
 Disadvantages
 Reduced control over pricing and branding compared to direct sales.
 Dependence on distributors for effective distribution and market penetration.
 Need to manage relationships with multiple distributors.
 FRANCHISING
Granting franchisees the right to operate under the company’s brand and business model.
Franchisees pay fees and royalties in exchange for support and access to the company’s
brand, products, and services.
 Features
 Granting franchisees the right to operate under the company’s brand and business model.
 Franchisees pay fees and royalties in exchange for support and access to the
company’s brand, products, and services.
 Franchisees operate independently but follow standardized operating procedures.
 FRANCHISING
 Advantages
 Rapid expansion of brand presence and market reach.
 Lower investment and operational costs compared to company-owned stores.
 Franchisees bear the burden of day-to-day operations and management.
 Disadvantages
 Loss of control over individual franchise locations and customer experiences.
 Franchisee management and training requirements.
 Potential for brand reputation damage due to poor franchisee performance.
 THIRD-PARTY LOGISTICS (3PL)
 Outsourcing logistics and distribution functions to third-party logistics providers. 3PL
companies offer services such as warehousing, transportation, order fulfillment, and
inventory management.
 Features
 Outsourcing logistics and distribution functions to third-party providers.
 Services include warehousing, transportation, order fulfillment, and inventory
management.
 Access to specialized expertise and infrastructure without the need for in-house resources.
 THIRD-PARTY LOGISTICS (3PL)
 Advantages
 Cost savings through economies of scale and shared resources.
 Focus on core business activities while outsourcing non-core functions.
 Scalability and flexibility to adapt to changing business needs.
 Disadvantages
 Loss of control over critical supply chain functions.
 Dependence on third-party providers for service quality and reliability.
 Potential for communication and coordination challenges with external partners.