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Transcript of Production, Distribution
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Production, Distribution
Business 40Week 5Carole K. Meagher16 February, 2005
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Agenda
Video Chapter 9 Article Analysis Chapter 15 Week 6 Lead-in
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“Digital Domain”
Cluster into your project groups What are some lessons from DD that you
learned from watching the video?
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Principles of Operations
How to organize your business so that… You know where your costs are going Your employees know their roles and
responsibilities You can assure customer satisfaction
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The Production & Operations Process
InputsInputs Conversion Conversion ProcessProcess
OutpuOutputt
ManufacturiManufacturingng
ServiceService
UB’s Dry UB’s Dry CleanersCleaners
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Operations Management Functions Facility Location Facility Layout Quality Control
Baldridge Award ISO 9000/ISO
140000
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Manufacturing Sector Operations Management
Form Utility
Manufacturing Processes
Assembly Process
Continuous Process
Intermittent Process Materials Requirement Planning
Enterprise Resource Planning
IT/Customer-Relationship Marketing
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Modern Production Techniques
Just-In-Time (JIT) Inventory
Internet Purchasing Flexible
Manufacturing Lean Manufacturing
Mass Customization Competing in Time Technology Assisted
Computer-Aided Design (CAD)
Computer-Aided Manufacturing (CAM)
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Dimensions of Quality
Performance
Features
Reliability
Conformance
Durability
Serviceability
Aesthetics Perceived
Quality
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Quality Control Standards Six Sigma () Quality Statistical Quality Control (SQC) Statistical Process Control (SPC) Deming Cycle Quality Function Deployment (QFD) Baldridge Award ISO 9000/14000/19011:2002
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Control ProceduresPERT/CPM Charts
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Control ProceduresGantt Chart
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Principles of Productivity
Keep getting better, faster, cheaper Only way to improve profits
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What’s Had The Biggest Effect on Productivity?
0% 20% 40% 60% 80%
Computers & Technology
Quality & Customer Satisfaction
Empowering Workers
Hiring Part-Time Workers
Downsizing Percentage of WorkforcePercentage of Workforce
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Where did Productivity Rise?
-2%
0%
2%
4%
6%
8%
10%
NonstoreRetail
Telecom Dept.Stores
Comm.Banks
FoodStores
MovieTheaters
Cable/PayTV
Source: BusinessWeek, May 27, 2002
Growth Rate Of Output Per Hour Growth Rate Of Output Per Hour 1990 1990 -- 20002000
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Productivity Challenge in the Automobile Industry
PRODUCER LABOR HOURS PER CAR
Toyota 21 Hours
Honda 22 Hours
General Motors 26 Hours
Ford 27 Hours
Daimler/Chrysler 31 HoursSource: Harbour & Associates, Center for Automotive Research
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U.S. Productivity Champions 1999-2003
Industry Productivity Gain
Consumer Electronics 14.1%
Computers 12.6%
Software 5.3%
Insurance 5.0%
Metals & Machinery 4.5%
Banking & Finance 3.9%Source: Economy.com Inc.
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Article, Groups, Break…
1. What is “channel conflict”? Describe how channel conflict is occurring between Mattel and toy retailers such as Toys R Us.
2. How is Mattel attempting to resolve or diminish this channel conflict?
3. What are the potential benefits to Mattel’s online strategy, including both e-commerce and Internet marketing?
4. What are the potential costs or risks to this online strategy?
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The Supply Chain
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The Four Ps of Marketing
Distribution
Retailers are part of the
distribution channel Product
Price
Promotion
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Delivery Channels
Customer
Web & Email • 24x7 • Visual
Call Center • Convenient • Immediate
Kiosks • Visual • Convenient
Pervasive • Immediate • 24x7
Brick & Mortar • Touch/Feel • Experience driven
Consumers buy what they want, when they want, wherever they want
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The basic distribution channel
Channel conflict at many levels…
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Wal-Mart’s integrated strategy across the distribution channel:
Wal-Mart Stores Discount stores Supercenters Neighborhood Markets
SAM’s CLUB segment
Factory direct purchasing
Distribution centers MacLane subsidiary
Private label
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Utility Functions of Intermediaries
FormForm TimeTime
PlacePlace
PossessionPossession
InformationInformationServiceService
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Percent of B2B Commerce from Internet
Source:Source: Forrester Research Inc.
0.2% 0.4%1.0%
2.1%
4.0%
6.3%
9.4%
0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%
10.0%
1997 1998 1999 2000 2001 2002 2003
*Excludes Service Industries*Excludes Service Industries
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Retail Store DistributionAlso relates to product availability
Intensive
Selective
Exclusive
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Non-Store Distribution
E-tailing Telemarketing Vending Machines, Kiosks,
Carts Direct Selling Multilevel Marketing Direct Marketing
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Where Your Food $ Goes (fig 15.3)
Labor33%
Farmer24%
Building14%
Packaging8%
Misc8%
Trans5%
Profits4%
Advertising4%
What are some things, as a business, you can do to improve profits?
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Why People Don’t Shop OnlineSo what is good, not good, to sell online?
1. It isn’t secure
2. It will jeopardize my privacy
3. Usually must pay shipping charges
4. Not enough selection
5. Can’t touch/try things first
6. No satisfaction guarantee
7. Returns are a hassle
8. Won’t arrive on time
9. Hard to find things online
10. Enjoy getting out of house to shop
Source: blink, www.earthlink.net/blink
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Logistics
Physical Distribution
Inbound
Materials
Outbound
Reverse
Information
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Week 6 Lead-in
Production and Distribution Chapters 9, 15
Weekly assignment… the usual If you are not yet on a group, get into one!