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1、McGraw-Hill/IrwinCopyright 2008 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter 7Distribution Strategies7-2Outlines 7.1 Introduction7.2 Direct Shipment Distribution Strategies (直接装运配送战略)7.3 Intermediate Inventory Storage Point Strategies (转运战略)7.3.1 Traditional Warehousing (传统仓库)7.3.2
2、 Cross-Docking (直接运转)7.3.3 Inventory Pooling (联合库存)7.4 Transshipment (调运)7.5 Selecting an appropriate strategy7-37.1 IntroductionlFocus on the distribution function. lVarious possible distribution strategies, and the opportunities and challenges associated with these strategies.lTwo fundamental dist
3、ribution strategies:lItems can be directly shipped from the supplier or manufacturer to the retail stores or end customerlUse intermediate inventory storage points (typically warehouses and/or distribution centers). lIssues with warehouses lManufacturing strategy (make-to-stock vs. make-to-order)lNu
4、mber of warehouseslInventory policylInventory turn over ratiolInternal warehouses vs. outside distributorlOwned by a single firm or by a variety of firms7-47.2 Direct Shipment Distribution Strategies (直接装运配送战略) lAdvantages:lThe retailer avoids the expenses of operating a distribution centerlLead tim
5、es are reduced.lDisadvantages:lRisk-pooling effects are negatedlManufacturer and distributor transportation costs increaselCommonly used scenarios: lRetail store requires fully loaded truckslOften mandated by powerful retailers lLead time is critical. lManufacturer may be reluctant but may have no c
6、hoice lPrevalent in the grocery industryllead times are critical because of perishable goods.7-57.3. Intermediate Inventory Storage Point Strategies (转运战略) lVariety of characteristics distinguish different strategies. lLength of time inventory is stored at warehouses and distribution centers. lStrat
7、egies:lTraditional warehousing strategy(传统仓储)ldistribution centers and warehouses hold stock inventorylprovide their downstream customers with inventory as needed. lCross-docking strategy(直接转运)lwarehouses and distribution centers serve as transfer points for inventorylno inventory is held at these t
8、ransfer points.lCentralized pooling and transshipment strategies (联合库存和调运)lmay be useful when there is a large variety of different products7-6Traditional WarehousinglInventory management and risk pooling key factorslOther factors also play a significant rolelCentralized vs Decentralized Managementl
9、Central vs Local Facilities7-7Centralized vs Decentralized ManagementlDecentralized systemlEach facility identifies its most effective strategy without considering the impact on the other facilities in the supply chain.lLeads to local optimization(局部优化).lCentralized systemldecisions are made at a ce
10、ntral location for the entire supply network. lTypical objective: minimize the total cost of the system subject to satisfying some service-level requirements. lCentralized control leads to global optimization.(全局优化)lAt least as effective as the decentralized system. lAllow use of coordinated strateg
11、ieslIf system cannot be centralized loften helpful to form partnerships to approach the advantages of a centralized system. 7-8Central vs. Local Facilities (中心和地方设施)lCentralized facilities lEmploy both fewer warehouses and distribution centerslFacilities are located further from customers. lOther fa
12、ctors:lSafety stock. Lower safety stock levels with centralized facilitieslOverhead. Lower total overhead cost with centralized facilitieslEconomies of scale. Greater economies of scale with centralized facilitieslLead time. Lead time to market reduced with local facilitieslService. lUtilization of
13、risk pooling better with centralizedlShipping times better with locallTransportation costs. lCosts between production facilities and warehouses higher with locallCosts from warehouses to retailers lesser with local7-9A Hybrid DecisionlSome products use centralized strategy while others use local str
14、ategylNot an either or decisionlVarying degrees of centralization and localization due to the varying levels of advantages and disadvantagesDiscussion centralized or decentralized?Very expensive products with low customer demand and high demand uncertaintyLow-cost products facing high customer deman
15、d and low demand uncertainty7-107.3.2 Cross-Docking (直接运转)1. Basic factslPopularized by Wal-MartlWarehouses function as inventory coordination points rather than as inventory storage points. lGoods arriving at warehouses from the manufacturer:lare transferred to vehicles serving the retailerslare de
16、livered to the retailers as rapidly as possible. lGoods spend very little time in storage at the warehouselOften less than 12 hourslLimits inventory costs and decreases lead times7-117.3.2 Cross-Docking (直接运转)2. Implementing issueslRequire a significant start-up investment and are very difficult to
17、managelSupply chain partners must be linked with advanced information systems for coordinationlA fast and responsive transportation system is necessary lForecasts are critical, necessitating the sharing of information.lEffective only for large distribution systems lSufficient volume every day to all
18、ow shipments of fully loaded trucks from the suppliers to the warehouses. lSufficient demand at retail outlets to receive full truckload quantities 7-127.3.2 Issues with Cross-Docking 3. Case studyWal-Mart (with video)l85% of its goods utilizing cross-docking techniqueslOperates a private satellite
19、communications system for sharing informationlHas a dedicated fleet of 2,000 trucks and on average, stores are replenished twice a weeklAchieves economies of scale by purchasing full truckloads and cut cost by 3% compared to the industry average 7-13Wal-Mart Supply Chain7-147.3.2 Issues with Cross-D
20、ocking 3. Case study Zara supply chain (with video)lOne of Zaras keys to success is very short lead time(20-15 days from design to retail stores)lShort lead time is achieved by cross-docking(cloth will be transferred in 72 hours after arriving at DC ) 7-15Inventory Pooling (联合库存) GM Examplel1,500 Ca
21、dillacs parked at a regional distribution center in Orlando lAwait delivery to dealers statewide within 24 hoursl10% to 11% sales loss because a car is not availablelTest program expected to: limprove customer service lboost sales of Cadillacs by 10%7-16Centralized Pooled Systems Perform BetterlFor
22、the same inventory level, a centralized system provides:lhigher service levellhigher sales lPush-pull supply chainlMoving from a push supply chain lDealers have to order before demand is realizedlTo a push-pull supply chain lDealers pull from regional distribution centers. lImplications:lEnd consume
23、rs will see better customer service lMore cars are available to them. 7-17Other FactorslWill GM sell more cars to GM dealers? lTotal number of cars ordered by dealers will not necessarily increase, even as customer service increases. lWhat about the dealers? lDealers have access to more inventorylPo
24、tentially can sell more. lLevels out the playing field between dealers. lSmall dealers would favor such a system Competitive advantage of large dealers wiped out7-18Example of Inventory PoolinglTwo retailers face random demand for a single product. lNo differences between the retailerslCompare two s
25、ystemslcentralized pooled system, lretailers together operate a joint inventory facility ltake items out of the pooled inventory to meet demand.ldecentralized systemleach retailer individually orders from the manufacturer to meet demandlIn both systems, inventory is owned by the retailers 7-19The Tw
26、o SystemsFIGURE 7-9: The centralized and decentralized systemsFIGURE 7-10: Probabilistic demand faced by each retailer7-20Other DatalWholesale price = $80 per unitlSelling price = $125 per unitlSalvage value = $20 per unitlProduction cost = $35 per unit7-21Costs and Profits in the Two SystemslDecent
27、ralized system lEach dealer orders 12,000 units lExpected profit per dealer = $470,000, Total = $940,000 lExpected sales = 11,340 units, Total = 22,680 units lManufacturer profit = $1,080,000 lCentralized system lTwo dealers together will order 26,000 unitslTotal expected profit = $1,009,392lJoint e
28、xpected sales = 24,470 unitslManufacturer profit = $1,170,0007-22Customer SearchlIf the customer arrives at a dealer and does not find the item lSwitches to another dealerlHelps the manufacturer sell more productslWhich system is better under customer search?lNo impact on the centralized system7-23I
29、mpact on Decentralized SystemlIf a dealer knows that its competitors do not keep enough inventorylthis dealer should raise the inventory level to satisfy: lits own demand ldemand of customers who initially approach other dealers with limited inventory. lIf a dealer knows that its competitors has sig
30、nificant inventorylthis dealer will reduce the inventory level lIt is not likely to see customers who switch lDealers strategy depends on its competitors strategy. lDealers may/may not know their competitor strategy lnot clear how they decide on their inventory level. lnot clear about the impact of
31、search on the manufacturer7-24Nash Equilibrium (Game Theory)纳什均衡 (博弈论)lIf two competitors are making decisions, they have reached Nash equilibrium if they have both made a decisionlBoth have decided on an amount to orderlneither can improve their expected profit by changing the order amount if the o
32、ther dealer doesnt change his order amount. 7-25Examplel = percentage of customers that search the system lEach retailer can determine what their effective demand will be if the other retailer orders a specific amount. lBased on this information, they can calculate how much they should order given a
33、ny order by their competitors. lBest response7-26Best Response with =90%FIGURE 7-11: Retailers best response7-27Nash Equilibrium of the SystemlRetailer one orders about 20,000 units, retailer two will respond by ordering about 12,000 units lIf this is the case, then retailer one should modify its st
34、rategy and reduce the order quantity lNo retailer has an incentive to modify its strategy lThey order amounts associated with the intersection of the two curves. lOptimal order quantity for each retailer = 13,900 unitslTotal expected profit for each retailer = $489,460 lTotal expected profit = $978,
35、920 lTotal expected sales = 25,208lTotal amount ordered from the manufacturer = 27,800 lManufacturers profit = $1,251,000. 7-28Decentralized and Centralized Systems for Search Level of 90%StrategyRetailersManufacturerTotalDecentralized978,9201,251,0002,229,920Centralized1,009,3921,170,0002,179,392lC
36、entralized system does not dominate the decentralized system.lRetailers prefer the centralized system lManufacturers profit is higher in the decentralized system7-29As IncreaseslEach retailers order quantity and profit increases lRetailers total expected profit will be higher in the centralized pool
37、ing system than in the decentralized system. 7-30As IncreaseslWith larger lretailers will order more in a decentralized system lmanufacturer will prefer a decentralized systemlretailers will prefer a centralized systemlWith smaller lmanufacturer will order less in a decentralized system lboth the re
38、tailers and the manufacturer will prefer a centralized pooling system. 7-31Effect of on Amounts Ordered FIGURE 7-12: Amount ordered by dealers as a function of the search level7-32Critical Search LevellPresence of a critical search levellmanufacturer prefers the centralized system below the levellot
39、herwise, manufacturer prefers the decentralized system. lManufacturer always prefers a higher search level7-33How Can the Search Level Be Increased?lIncrease brand loyaltylcustomers will more likely search for a particular brand at another retailer if their first choice does not have the product in
40、inventory. lInformation technology initiatives to increase communication between retailerslincreases the ease with which customers can search in the systemlhigher likelihood that customers will search in the system7-34lQuestions:What companies or supply chains can you think of that use an inventory
41、pooling strategy?Answer: Inventory pooling is the capability of the companies to serve several marketplaces each with their own uncertain demand-from a single stock of inventory (centralized warehouse, common components, delayed differentiation, product/ component substitution, e-tailing, etc.). Com
42、panies that serve multiple products to multiple markets can use inventory pooling strategy such as fashion apparel companies.7-35TransshipmentlShipment of items between different facilities at the same level in the supply chain to meet some immediate needlOccurs mostly at the retail levellCan be ach
43、ieved: lwith advanced information systemslShipping costs are reasonablelRetailers have same owner7-36Retailers with Different OwnerslMay not want to do transshipmentslDistributor Integration strategies may be adoptedlNot clear regarding inventory levelslA retailers strategy depends on competitors strategies7-37lQuestions:What companies or supply
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