1. SUPPLY CHAIN
MANAGEMENT
14
Mmarketing
GREWAL /
LEVY
McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Learning Objectives
LEARNING OBJECTIVES
 What is supply chain management?
 How do supply chains add value?
 How does a supply chain work?
 How is a supply chain managed?
14-2

3. Supply Chain Management
14-3

4. Supply Chain, Marketing Channels,
and Logistics are Related
14-4

5. Supply Chains Add Value
14-5

6. Supply Chains Streamline
Distribution
FedEx Commercial
14-6

7. Supply Chain Management
Affects Marketing
14-7

8. Information Flows
14-8

9. Data Warehouse
14-9

10. Electronic Data Interchange
14-10

11. Pull and Push Supply Chain
14-11

12. The Distribution Center
ABC News Segment on a Walgreens Warehouse
14-12

13. Inventory Management Through
Just-In-Time Systems
Just-in-time (JIT) Quick response (QR)
Zappos Website
14-13

14. Benefits of JIT Systems
14-14

15. Managing Supply Chains Through
Strategic Relationships
14-15

16. Nicole Miller
Nicole Miller Website
14-16

17. Which of the following is a common activity
associated with logistics management?
A. demand forecasting.
B. inventory control.
C. return goods handling.
D. order processing.
E. all of the above.
14-17

18. Marketing managers often focus on ____________, while logistics
managers focus on _____________, causing conflict when trying to
provide value to customers.
A. maximizing sales; minimizing costs
B. presentation; packaging
C. cross-tracking; double accounting
D. minimizing costs; maximizing sales
E. decentralization; centralization
14-18

19. Check Yourself
1. How does supply chain management add
value?
14-19

20. Check Yourself
1. What are the various supply chain links
associated with each information flow
step?
2. What is the difference between push and
pull supply chains?
14-20

21. Making Merchandise Flow
14-21

22. How does Dell’s Merchandise Flow
14-22

23. Distribution Center
vs. Direct Store Delivery
14-23

24. Inbound Transportation
 Dispatcher coordinates
deliveries
 Manufacturer may pay
transportation
expenses or retailers
may negotiate directly
with trucking
companies and pay
expenses
14-24

25. Receiving and Checking
14-25

26. Storing and Cross-Docking
14-26

27. Getting Merchandise Floor-Ready
14-27

28. Shipping Merchandise to Stores
 Shipping merchandise
to stores is complex
for multi-store chains
 Distribution centers
use sophisticated
routing and scheduling
systems
14-28

29. RFID tags have dramatically reduced the
time and labor associated with:
A. the Four Ps.
B. promotion and advertising.
C. checking and receiving merchandise.
D. franchising.
E. demand forecasting.
14-29

30. For a JIT system to be successful, the firm and its
vendors need to do all of the following EXCEPT:
A. cooperate.
B. compete.
C. develop EDI systems.
D. develop CPFR systems.
E. share data.
14-30

31. Check Yourself
1. What happens at each step of the
merchandise flow in a typical supply chain?
2. Why are just-in-time supply chain systems
becoming so popular?
14-31

32. Managing the Supply Chain
Supply chain or channel conflict
14-32

33. Managing Supply Chains Through
Vertical Integration
Independent or conventional supply chain
14-33

34. Types of Vertical Marketing Systems
14-34

35. Relationship of
supply chain members
14-35

36. Check Yourself
1. What are the different types of vertical
marketing systems?
2. How do firms develop strong strategic
partnerships with their supply chain
partners?
14-36

37. Glossary
Merchandise cartons that are cross-docked are
prepackaged by the vendor for a specific store.
Return to slide
14-37

38. Glossary
Manufacturers can ship merchandise either directly
to a store or to a distribution center, where it is
then shipped to the store.
Return to slide
14-38

39. Glossary
Electronic data interchange (EDI) is the computer-
to-computer exchange of business documents
from a retailer to a vendor and back.
Return to slide
14-39

40. Glossary
Just-in-time inventory systems are inventory
management systems designed to deliver less
merchandise on a more frequent basis than
traditional inventory systems.
Return to slide
14-40

41. Glossary
Radio frequency identification (RFID) tags are tiny
computer chips that automatically transmit to a
special scanner all the information about a
container’s contents or individual products.
Return to slide
14-41

42. Glossary
A strategic relationship or partnering relationship
involves the supply chain members being
committed to maintaining the relationship over
the long term and investing in opportunities that
are mutually beneficial.
Return to slide
14-42

43. Glossary
Supply chain management is a set of approaches and
techniques firms employ to integrate their suppliers,
manufacturers, warehouses, stores, and transportation
intermediaries into a seamless operation in which
merchandise is produced and distributed in the right
quantities, to the right locations, and at the right time, as
well as to minimize system wide costs while satisfying the
service levels that their customers require.
Return to slide
14-43

44. Glossary
Vendor-managed inventory (VMI) is an approach
for improving supply chain efficiency in which the
manufacturer is responsible for maintaining the
retailer’s inventory levels in each of its stores.
Return to slide
14-44