University:
Missouri State University
Course:
MGT 340 | Principles of Management
Academic year:

2024
Views:

354

Pages:

4
Author:

Trevon Bernard

Chapter 11 Notes DISTRIBUTION CUSTOMER SERVICE AND LOGISTICS LOGISTICS--the transporting, storing, and handling of goods to match target customers' needs with a firm's marketing mix--both within individual firms and along a channel of distribution. PHYSICAL DISTRIBUTION (PD)--another common name for logistics. PHYSICAL DISTRIBUTION CUSTOMER SERVICE CUSTOMER SERVICE LEVEL--how rapidly and dependably a firm can deliver what customers want. • Physical distribution is invisible to most consumers • Trade-offs of costs, service, and sales PHYSICAL DISTRIBUTION CONCEPT FOCUSES ON THE WHOLE DISTRIBUTION SYSTEM PHYSICAL DISTRIBUTION (PD) CONCEPT--all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system which seeks to minimize the cost of distribution for a given customer service level. • Finding the lowest total cost for the right service level TOTAL COST APPROACH--evaluating each possible PD system-and identifying all of the costs of each alternative. COORDINATING LOGISTICS ACTIVITIES AMONG FIRMS • Functions can be shifted and shared in the channel • How PD is shared affects the rest of a strategy • A coordinated effort reduces conflict • JIT requires a close, cooperative relationship • Chain of supply may involve even more firms CHAIN OF SUPPLY--the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. • Better information helps coordinate PD ELECTRONIC DATA INTERCHANGE--an approach that puts information in a standardized format easily shared between different computer systems. THE TRANSPORTING FUNCTION ADDS VALUE TO A MARKETING STRATEGY TRANSPORTING--the marketing function of moving goods. WHICH TRANSPORTING ALTERNATIVE IS BEST? • Transporting function must fit the whole strategy • Railroads--large loads moved at low cost • Trucks are more expensive, but flexible and essential • Ship it overseas, but slowly • Inland waterways are important too • Pipelines move oil and gas • Airfreight is expensive, but fast and growing CONTAINERIZATION--grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination. • Piggyback--a ride on two or more modes PIGGYBACK SERVICE--loading truck trailers--or flat-bed trailers carrying containers--on railcars to provide both speed and flexibility. THE STORING FUNCTION AND MARKETING STRATEGY • Store it and smooth out sales, increase profits and consumer satisfaction STORING--the marketing function of holding goods. INVENTORY--the amount of goods being stored. SPECIALIZED STORING FACILITIES MAY BE REQUIRED PRIVATE WAREHOUSES--storing facilities owned or leased by companies for their own use. PUBLIC WAREHOUSES--independent storing facilities. • Warehousing facilities cut handling costs too THE DISTRIBUTION CENTER--A DIFFERENT KIND OF WAREHOUSE • Don't store it, distribute it DISTRIBUTION CENTER--a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs.