Case Examples of channel net work for some products

Channel Management

Distribution channels options & design pattern for B2B &B2C

Supply Chain Management: Objectives

Process of supply chain & logistics management

Seventh Lectureon

CHANNELS & SCM

Case Examples of channel net work for some products

INDUSTRY PRODUCT CHANNELS FOR CUSTOMER

Textile industry Fabrics Mills to dealers/ wholesalers/ to retailers/garment units

Steel Iron ore

coal

Direct from mine owners to steel mills

Steel Steel products Stockist, dealer, retailer and customer (small)

Stockist, dealer and customer( big builders)

Direct to OEM

Capital goods Industrial machines Direct to the customers(industries) and/or through agents

Automobiles Commercial vehicles/ passenger cars

Dealers & company show rooms

Electronics Consumer durables company show rooms/ & through dealers to retail outlets

Banking Banks Branches

Channel Management

Channel management

Managingconflict

MotivationSelection EvaluationTraining

Conventional vs. Vertical Marketing System

A A distribution channel structure in whichdistribution channel structure in which

producers,producers,

wholesalers,wholesalers,

and retailersand retailers

act as a act as a unified systemunified system

..

Distribution channels options & design pattern for B2B &B2C

MNUFACTURER

CUSTOMERS

STOCKISTSAGENTS

DEALERS/DISTRIBUTORS

RETAILERS

DIRECT MARKETING ( OEM)

channel selection is depended

product type, regional coverage & customer type

Performance evaluation parameters for channel members(Minimize cost & Maximize profits )

New customers serviced

Market feed back

Average inventory

levels

Customer satisfaction

vs. complaints

Customer Delivery

performance

Sales quotaV /s

achieved

Channel Member

Evaluation

MARKETING

TEAM

MARKET&

CUSTOMER

FEED BACK

Supply Chain Management

Supply Chain Management: Objectives

Main Objectives

• Smooth flow of goods from factory to customers

• Cost reduction in supply chain system

• Production planning

• Minimum inventory

• Timely delivery

• Packaging should ensure safe delivery/ no loses

13-9

The Supply Chain of a Manufacturing Company

Process of supply chain & logistics management

Purchase of Raw materials

CompSpares, etc

Production planning

Inventory controlProcessing, customer

Orders,Packing,

Dispatches, etc

Transportation,Warehousing,

Distribution to channel Members,Dispatches

to customers.

Customer service,Performance evaluation,

Market feed backFollow up by sales force

Raw material sourcing, Production planning

Transportation, Distribution&

Customer servicing

What is the extent of outsourcing of supply chain activities?

0 10 20 30 40 50 60 70 80 90 100

Transportation

Warehousing

Manufacturing

Information Systems

Import/Export Mgmt

Procurement

Customer Service

Order Processing

Inventory Management

Percentage Number of Respondents

YesNo

Supply Chains Supply Chains ImplementationImplementation

What are the benefits achieved by supply chain implementation?

Measurable Indicators Extent of Improvement

1. Sales Revenue Increased 20.2%

2. Profits Increased 15.5%

3. Order to Delivery Cycle time Reduced 32.8%

4. Inventory Reduction

a. Raw Material 25.1%

b. WIP 38.7%

c. Finished Goods 32.1%

5. On Time Delivery Improved 33.4%

6. Customer Base Increased 27.7%

Supply Chain: Components of Cost Of Sales & Distribution Margins

Direct Cost : Cost Of Raw Material +Conversion Cost Into Finished Product +PackagingDistribution & marketing +Transportation +Cost Of Distribution (Margins) + Inventory Cost/Warehouse Cost +Cost Of ServicingOther fixed costs + marketing/ selling Costs + other fixed costs( depreciation, interest, etc) +Taxes/duties Profit Margins

Selling Price To The Customers

THANK YOU