Table Of Content

PONDICHERRY UNIVERSITY (A Central University) DIRECTORATE OF DISTANCE EDUCATION Logistics and Supply Chain Management MBA - MARKETING Paper Code : MBMM 3004 MBA - RETAIL MANAGEMENT Paper Code : MBRM 3004 III Semester Authors ӵ Dr. Bhushan Sudhakar Reader, Dept. of International Business School of Management, Pondicherry University, Puducherry. ӵ Dr. Clement Sudhakar Professor, Dept. of Management Studies, Karunya Institute of Management, Karunya University, Coimbatore. Edited by Prof. Rajesh Chowdhary , Professor, Dept.of Business Administration, P.B.Sidharth College, Vijayawada. © All Rights Reserved For Private Circulation Only ISBN No. 978-81-923022-6-3 TABLE OF CONTENTS UNIT LESSON TITLE PAGE NO. 1.1 Physical Distribution 3 1.2 Marketing Channels 26 I 1.3 Channel Members 35 1.4 Market Segmentation 56 2.1 Managing the Marketing Channel 73 2.2 Channel Members 85 II 2.3 Channel Flows 103 2.4 Product issues in channel management 117 3.1 Building Blocks of Supply Chain Network 151 III 3.2 Performance Measurement and Controls 168 3.3 Models for Decision Making 171 4.1 Supply Chain Inventory Management 189 4.2 Multichannel Inventory System 194 4.3 Supply Chain Facility Layout 200 IV 4.4 Capacity Planning 214 4.5 Inventory Optimisation 218 4.6 Routing and Scheduling 224 5.1 E Business & Logistics 241 V 5.2 Business Process Management 276 5.3 Customer Relationship Management 294 Notes MBA (Marketing) – III Semester Paper Code: MBMM 3004 PAPER XIV Logistics and Supply Chain Management Objectives ➢ To introduce process and functions of physical distribution system ➢ To introduce major building blocks, functions, business process, performance metrics and decision making in supply chain network, and ➢ To provide an insight into the role of Internet Technologies and electronic commerce in supply chain management Unit – I Physical distribution: Participation in the physical distribution functions – The environment of physical distribution – Channel design strategies and structure – electing channel members – Setting distribution objectives and tasks – Target markets and channel design strategies. Unit – II Managing the marketing channel – Product, Pricing and Promotion issues in channel Management and Physical Distribution – Motivating channel members – Evaluating channel member performance – Vertical marketing systems – Retail co-operatives, Franchise systems and corporate marketing systems. Unit – III Supply Chain: Building Blocks of Supply Chain Network – Performance Measures in Decisions in the Supply chain World – Models for Supply Chain Decision Making. 1 Notes Unit – IV Supply Chain Inventory Management: Economic Order quantity Models – Recorder Point Models – Multichannel Inventory systems – Supply chain Facilities Layout – Capacity Planning – Inventory optimization – Dynamic Routing and Scheduling. Unit – V Relation to ERP: E-procurement – E-Logistics – Internet Auctions – E-markets – Electronic Business Process – Optimization Business Object in SCM. References D.K. Agarwal, LOGISTICS & SUPPLY CHAIN MANAGEMENT, Macmillan India Pvt. Ltd. New Delhi, 2008 N. Chandrasekaran, SUPPLY CHAIN MANAGEMENT, Oxford University Press, 2010 Satish K. Kapoor & Purva Kansal, BASICA OF DISTRIBUTION MANAGEMENT - A LOGISTICAL APPROACH, Prentice – Hall India, 2003. Sunil chopra, Meindl & Kalra, SUPPLY CHAIN MANAGEMENT, Pearson Education, India, 2009 Bowersox & Closs, LOGISTICS MANAGEMENT, Tata McGraw Hill, New Delhi, 2008 2 Notes UNIT – I Unit Structure Lesson 1.1 - Physical Distribution Lesson 1.2 - Marketing Channels Lesson 1.3 - Channel Members Lesson 1.4 - Market Segmentation Lesson 1.1 - Physical Distribution Learning Objectives After reading this lesson you should be able to ➢ Understand the concept of Physical Distribution and its importance ➢ Identify the functions and principle components of physical distribution ➢ Analyze and Understand the distribution strategy ➢ Know the importance of fast changing distribution environment Physical Distribution 1. Physical Distribution System Introduction Physical distribution is the movement of materials from the producer to the consumer. This movement of materials is divided into two functions: Physical supply is the movement and storage of goods from suppliers to manufacturing. Physical distribution is the movement and storage of finished goods from the end of production to the customer. The particular path in which the goods move – through distribution centres, wholesalers, and retailers – is called the channel of distribution. 3 Notes Top Logistics Companies of India Name of the company Position in the industry CTC Freight Carriers Private Limited 1 Transocean Express Logistics 2 Velocity Logistics 3 Atlas Logistics 4 DHL 5 Global Express Service 6 Royal Logistics 7 Blue Dart 8 Gati 9 Safe Express 10 Source: http://www.bestindiansites.com/top-companies/logistics/ A channel of distribution is one or more companies or individuals who participate in the flow of goods and/or services from the producer to the final user or consumer. The transaction channel is concerned with the transfer of ownership. Its function is to negotiate, sell, and contract. The distribution channel is concerned with the transfer or delivery of the goods or services. To extend markets requires a well-run distribution system. Distribution adds place value and time value by placing goods in markets where they are available to the consumer at the time the consumer wants them. The specific way in which materials move depends upon many factors, some of which are the channels of distribution that the firm is using, the types of markets served, the characteristics of the product, and the type of transportation available to move the material. The objective of distribution management is to design and operate a distribution system that attains the required level of customer service and does so at least cost. To reach this objective, all activities involved in the movement and storage of goods must be organized into an integrated system. 4 Notes In a distribution system, four interrelated activities affect customer service and cost of providing it: ➢ Transportation, ➢ Distribution inventory, ➢ Warehouses (distribution centres), and ➢ Order processing. Physical distribution is the set of activities concerned with efficient movement of finished goods from the end of the production operation to the consumer. Physical distribution takes place within numerous wholesaling and retailing distribution channels, and includes such important decision areas as customer service, inventory control, materials handling, protective packaging, order procession, transportation, warehouse site selection, and warehousing. Physical distribution is part of a larger process called “distribution,” which includes wholesale and retail marketing, as well the physical movement of products. Physical distribution activities have recently received increasing attention from business managers, including small business owners. This is due in large part to the fact that these functions often represent almost half of the total marketing costs of a product. In fact, research studies indicate that physical distribution costs nationally amount to approximately 20 percent of the country’s total gross national product (GNP). These findings have led many small businesses to expand their cost- cutting efforts beyond their historical focus on production to encompass physical distribution activities. The importance of physical distribution is also based on its relevance to customer satisfaction. By storing goods in convenient locations for shipment to wholesalers and retailers, and by creating fast, reliable means of moving the goods, small business owners can help assure continued success in a rapidly changing, competitive global market. 5 An earlier resource pack described the decisions that must be taken when a company organises a channel or network of intermediaries who take responsibility for the management of goods as they move from the producer to the consumer. Each channel member must be carefully selected and the company must decide what type of relationship it seeks with each of its intermediate partners. Having established such a network, the organisation must next consider how these goods can be efficiently transferred, in the physical sense, from the place of manufacture to the place of consumption. Evolution of Supply Chain Management Physical distribution management (PDM) is concerned with ensuring the product is in the right place at the right time. ‘Place’ has always been thought of as being the least dynamic of the ‘4Ps’. Marketing practitioners and academics have tended to concentrate on the more conspicuous aspects of marketing. It is now recognised that PDM is a critical area of overall marketing management. Much of its expertise is ‘borrowed’ from military practice. 6