Exam 1 Review
Engineering Technology And Industrial Distribution 240 with Vestal at Texas A&M University
About this deck
By: Ryan Miller
Created: 2011-02-22
Size: 60 flashcards
Views: 80
Created: 2011-02-22
Size: 60 flashcards
Views: 80
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Consumer Channel Design
Manufacturer -> Consumer
Manufacturer -> Wholesaler -> Consumer
Manufacturer -> Wholesaler -> Retailer -> Customer
Industrial Channel Design
Physical Ownership in supply chain
Manufacturer -> End User
Manufacturer -> Distributor -> End User
Manufacturer -> Master Distributor -> Distributor -> End User
If you were manufacturer of retail goods, why not sell directly to end user?
Get more coverage from going through wholesaler or retailer.
Intermediaries
Wholesalers and distributors.
Breaking Bulk
The act of buying and breaking down quantities into smaller lots. Distributor buys in large quantities, selling in smaller quantities or broken packages.
Packaging
This is different from consumer to industrial channel. Sometimes difficult to prevent shoplifting, other times easy to provide easier access.
Assortment
Based on the customer being serviced. Variety of products kept in inventory.
Possession
When, were, and how to take ownership of item delivered or picked up.
Information
Research and conversing with sales associates.
Purchase Time
Setting services up for a customer at certain times.
ex. Pharmacy purchases medicine at 2 am.
Wait Time
How long can the customer wait on the product.
Delivery Time
ex. 2-3pm because can/need to handle product at a specific time.
Ownership Change
Who is the product owned by and when does this change in the supply chain process.
Consignment
Have the product, but do not own it until it is used.
Payment
Extending credit.
ex-bill/have 30 days to pay for product.
OEM - Original Equipment Manufacturer
John Deere, Caterpillar, cell phone builders
MRO - Maintenence Repair and Operations
Replacing flourescent lamps, etc.
Contractors
Responsible for the day-to-day oversight of the construction site, and management of vendors and trades. Includes plumbing, electrical, Texas A&M. General contractors -> sub contractors.
Important Service Outputs for MRO
Breaking bulk, packaging, assortment.
Important Service Outputs of Contractors
Payment/extending credit
More likely intermediaries are used
The greater the differnence between the service outputs of the manufacturer and the requirements of the customer...
Levels of Distribution
- Exclusive- Manufacturer only allows 1 distributor to sell products in area.
- Selective- Authorize selected few distributors to sell product.
- Intensive- Sell to just about anybody (ex. 3M).
Supply Chain Management
A management system that soorodinates and integrates all the activities performed by supply chain memebers into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value.
Distributors
Created fromthe time that manufacturers recognized their inability to effectively distribute products outside their own geographic areas.
Elimination of Distributors
Results as lon as there are dsitributors bridging the gap between suppliers and customers, companies want way to take away that link.
Reasons Supply Chain is Needed
- Inadequate finances for necessary functions
- Customers' desire for product assortment
- Better rate of return on core business (outsourcing)
- Contact "efficiency"
Distributors Economic Role
- Manufacturer
- inventory
- order handling
- product knowledge
- credit
- Customer
- inventory
- freight
- storage
- order handling
Functions of Distributor
- Selling
- Credit
- Inventory
- Transportation
- Servicing
Selling
Providing technical and market information to those who specify, purchase, manufacture, or install industrial products. Understanding the customer's business to be able to solve problems.
Inventory
Maintaining these products locally on the shelf for immediate delivery or pickup.
Credit
Extended to industrial customers.
Transportation
Provided to user's end location.
Servicing
Provided after products have been sold and sometimes even after they have been installed.
Distributors own Customer Relationships
Distributors understand customer needs, know the reality of the business environment, and are in a better position to anticipate trends and future changes.
Distributors provide value-added services
Product customization, providing marketing, and selling support.
Major trends benefiting Distributors
- Increasing value of information
- Move towards mass customization
- Increase use of the Just in Time inventory
- Reduction in number of vendors
Manufacturer - Distributor Relations
Evolving customer expectations create new demands on both:
- new business models, ex-integrated supply
- alignment between the two for mutual benefit
- key performance matrices which distributors have of their suppliers
- distributor feels new policies
Future Role of Distributor
- Continued channel consolidation and acquisition
- Impementation and benefits of strategic alliances
- Key channel performnace metrics
- End user purchasing strategies
- Implementation and use of technology
Successful Distributors
Evolve from traditional role of component/product supplier to true business partner, using in-depth knowledge of customer's business to reduce customer's overall operating costs.
Product Based Purchasing
- Buy what can be sold at profit
- 'Distributor decides what to buy, sales team figures out to whom it can be sold at a profit
- A little "Old School" but still exists in many channels
Customer Based Purchasing
- Distributor decided to buy based on the requirements of the customers they are serving
- Tries to provide products at desired service level and most economical cost
Recieving
Accountability for materials recieved in a timely and accurate manner. Errors here will lead to errors later in distributor operations showing wrong levels of inventory.
Sales
Counter, inside telephone, and outside.
Counter Sales
- Consists of product display and counter seperating customer/storage area
- Provide info/answer technical Q's
- Promote company/product
- Good interpersonal/selling skills required
- SHOW SOME HUSTLE!!!
Inside Telephone Sales
- No face to face interaction makes it difficult
- customer can't view product
- rep can't see visual cues
- Must analyze/respond quickly
- Need good problem solving skills
Outside Sales
- Specialist in the customer's business area
- Meet customer in person at place of business
- Need sufficinet product knowledge, be able to advise customers and recommend product/services that will reduce their operating costs, saving $ and solving problems
Order Filling
- Known as picking
- picker should know exact mathcing item/location
- should use efficient picking method/route
- should pick exact quantity in timely manner
- accuracy is key
Error=lower customer satisfaction, cost to reship item, & RMA activities
Buy-Outs
Required when merchandise ordered by customer not available in inventory. Normally done from local competitor to satsy customer orders. Better forecasting=less.
Packing
- After order picked, done to be shipped to customer
- Should be done with care to avoid damage to merchandise
- Shiiping labels atteched indicating the packing list, name of customer, and destination address.
Shipping
- Dispatched to:
- freight lines for out of town customers
- Delivery department for local customers
- "will call" locations where customer can pick them up
RFID - Radio Frequency Identification
Detected as it passes through recieving dock and receipt processed.
End User
Person that DOESNT resell the product in its current state.
Manufacturer
- Motivations
- Product Design
- research-materials/market
- engineering-design,safety,longevity
- Production
- market size
- market share
- large volume runs
Manufacturer's Responsibility
- Produce quality products
- Maintain consistent lead times
- Create markets
- end user and specifier calls
- advertising
- printed/electronic catalogs
- Provide technical info/training
- Protect channel(design wins=commision)
- Compensate channel partners
Manufacturer's Representative
- Employed by manufacturer
- Responsible for sales in given territory
- May call on end users, distributors, specifiers, or agents
- Skills needed:
- product/market knowledge
- negotiation/teaching skills
- understanding of partnerships/relationships
Factory Owned Distributorship
- Started because lack of other channels
- nobody has capability of selling/housing products
- Best to get representation required
- To be full service, must sell other manufacturer;s products
- ex-GESCO
Non-factory Owned Distributor
- Full service with all functions of a distributor
- More independent than manufacturer
- better tailoring of product mix
- even if exclusive
- can give good representation to new products
- less biased
Manufacturer's Agent
- Usually rep companies whose sales in given territory don't support full time employee
- May call on distributors, end users, specifiers, and manufacturers
- Usually complimentary products
- electric, plumbing
- DONT stock/NEVER own inventory
3PLs - Third Party Logistics
- Transportation
- Long Haul
- Short deliveries
- "Hot Shots"
- Warehousing
- recieving, storing, picking, and packing
- Provide info like track and POD(proof of delivery)
- Complete logistic function
- +deciding level/location of inventory
LTL
Less than Truck Loading
About this deck
By: Ryan Miller
Created: 2011-02-22
Size: 60 flashcards
Views: 80
Created: 2011-02-22
Size: 60 flashcards
Views: 80
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
Kathy