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供应链物流管理SupplyChainLogisticsManagementChapter1:Twenty-firstCenturySupplyChainsSUPPLIERNETWORKINTEGRATEDENTERPRISEDISTRIBUTIVENETWORKInformation,Product,Service,FinancialandKnowledgeFlowsMATERIALSCapacity,Information,CoreCompetencies,CapitalandHumanResourcesRelationshipManagementProcurementManufacturingDistributionENDCONSUMERSGeneralizedSupplyChainModel
1-3McGraw-Hill/IrwinSupplyChainLogisticsManagement,FirstEdition.Bowersox,Closs,andCooper.Copyright©2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.Whatisasupplychain?CustomerwantsdetergentandgoestoJewelJewelSupermarketJewelorthirdpartyDCP&GorothermanufacturerPlasticProducerChemicalmanufacturer(e.g.OilCompany)TennecoPackagingPaperManufacturerTimberIndustryChemicalmanufacturer(e.g.OilCompany)SuccessfulSupplyChainStrategies(1)Thefirstsetofsupplychainstrategiesdirectlysupportbusinessstrategiesfocusedonproductleadershipandbrand-building:MarketSaturationDriven:
Focusesongeneratinghighprofitmarginsthroughstrongbrandsandforcefulmarketinganddistribution.ThisisthestrategyofthesuccessfulA-brandsupplierslikeCoca-Cola,SaraLee,Procter&Gamble,NestleandUnilever.EspeciallyUnileverhasdrawnattentionbyeliminatingmanyminorandlocalbrandsinordertofocusallattentiontostronginternationalbrands.OperationallyAgile:
Configuresassetsandoperationstoreactfasttoemergingconsumertrendsalonglinesofproductcategoryorgeographicregion.TescoUKandtheglobalAholdCompanyarebothretailersthathavebuildsystemsgivingstorestheopportunitytorespondtothelocalcustomers.Bothassortmentandshelvepresentationaresystematicallyadaptedtoactuallocalsales,andreplenishmentisexecutedusingcomputerassistedordering.SuccessfulSupplyChainStrategies(1)Thefirstsetofsupplychainstrategiesdirectlysupportbusinessstrategiesfocusedonproductleadershipandbrand-building:FreshnessOriented:
Concentratesonearningapremiumbyprovidingtheconsumerwithproductthatisfresherthancompetitor'soffering.Forinstance,aleadingfreshfoodsupplierconsidersthecoldchaincriticaltosuccesssincetemperatureisthedominantfactorinshelflife.ItscoldchainstartsfromthedaytheproduceispickedandlastsuntilconsumersbringithometotheirrefrigeratorsSuccessfulSupplyChainStrategies(2)Thesecondsetofstrategiesdealmorewithtightercollaborationwiththechannel,thecustomer,and/ortheendconsumer:ConsumerCustomizer:
Usesmasscustomizationtobuildandmaintaincloserelationshipswithendconsumersthroughdirectsales.AperfectexampleoutsidethefoodsectorisPCcompanyDell.WithinthefoodsectorwealreadydescribedtheexampleoftheUnileverCompanyinvestinginthenewbrick-and-clickcompanyRituals.ValueforMoneyFocused:
Thisstrategyputsapriorityon"lowprice,best-value"forthecustomer,butitfocuseslessonbrandthanondedicatedservice.Thishasbeentheprioritystrategyofprivatelabelmanufacturersand"EveryDayLowPrices"(EDLP)retailers.Someofthemostsuccessfulretailersintheworldusethisstrategy:Wal-MartintheUSAandAldiinmostcountriesofEurope.SuccessfulSupplyChainStrategies(2)Thesecondsetofstrategiesdealmorewithtightercollaborationwiththechannel,thecustomer,and/ortheendconsumer:LogisticsOptimizer:
Emphasizesabalanceofsupplychainefficiencyandeffectiveness.Thislaststrategyhasbeenusedbymanyofthemiddleoftheroadretailers.ItappearsthattheValueforMoneyfocusissuperiortologisticsoptimization,becauseitstartswithcustomervalueandsupplychainservice,andthenoptimizestheoperation.Eachofthesesixsupplychainstrategiescanbepowerfulwhenalignedtoabusinessunit'soverallstrategy.However,onlycollaborationbetweenmultipletradingpartnerswillyieldasynchronizedsupplychain.Thisoftenmaximizestheendconsumervaluepropositionandultimatelythevaluetoeachtradingpartner.AnticipatoryBusinessModelFORECASTBUY
COMPONENTS
AND
MATERIALSMANUFACTURERWAREHOUSESELLDELIVERBUY
COMPONENTS
AND
MATERIALSMANUFACTURERSELLDELIVERResponse-basedBusinessModelThe21stCenturySupplyChainManagingthemodernsupplychainisajobthatinvolvesspecialistsinmanufacturing,purchasing,anddistribution,ofcourse.ButtodayitisalsovitaltotheworkofCFOs,CIOs,operationsandcustomerserviceexecutives,andcertainlychiefexecutives.Changesinsupplychainmanagementhavebeentrulyrevolutionary,andthepaceofprogressshowsnosignofmoderating.Inourincreasinglyinterconnectedandinterdependentglobaleconomy,theprocessofdeliveringsuppliesandfinishedgoods(andinformationandotherbusinessservices)fromoneplacetoanotherisaccomplishedbymeansofmind-bogglingtechnologicalinnovations,clevernewapplicationsofoldideas,seeminglymagicalmathematics,powerfulsoftware,andold-fashionedconcrete,steel,andmuscle.TheTriple-ASupplyChainThebestsupplychainsaren’tjustfastandcost-effective.Theyarealsoagileandadaptable,andtheyensurethatalltheircompanies’interestsstayaligned.TheTriple-ASupplyChainClockspeed:TheDimensionofTimeonOperationsManagementStudytheIndustryFruitfliesSupplyChainLogisticsManagementChapter2:LeanLogisticsSource:RobertV.Delaney,11thAnnual“StateOfLogisticsReport”©June5,20001980GDP$2.88trillionLogisticsCost$451billion15.7%ofGDPTrans.Cost$214billion47.5%ofLogisticsCost1999GDP$9.26trillionLogisticsCost$921billion9.9%ofGDPTrans.Cost$554billion60.2%ofLogisticsCostLogisticsTransportation$billion0100200300400500600700800900198019991000YearUnitedStatesLogisticsCostsUnderstandingtheSCASC
consistsofallstagesinvolved,directlyorindirectly,infulfillingacustomerrequest.Includesthemanufacturer,suppliers,transporters,warehouses,retailers,andcutomersthemselves.Includesfunctions:newproductdevelopment,marketing,operations,distribution,finance,andcutomerserviceWhatisaSC?CustomerwantsdetergentandgoestoJewelJewelSupermarketJewelorthirdpartyDCP&GorothermanufacturerPlasticProducerChemicalmanufacturer(e.g.OilCompany)TennecoPackagingPaperManufacturerTimberIndustryChemicalmanufacturer(e.g.OilCompany)WhatisaSC?ThetermSCconjuresupimagesofproduct,orsupply,movingfromsupplierstomanufacturerstodistributorstoretailerstocustomersalongachain.SupplynetworkorsupplywebAmanufacturermayreceivematerialformseveralsuppliersandthensupplyseveraldistributors.FlowsinaSCCustomerInformationProductFundsSupplyChainTheObjectiveofaSCTomaximizetheoverallvalueThevalueis
Thedifferencebetweenwhatthefinalproductisworthtothecustomerandtheeffortthesupplychainexpendsinfillingthecustomer’srequest.Value—SCprofitabilityThedifferencebetweentherevenuegeneratedfromthecustomerandtheoverallcostacrosstheSC.TheSCprofitabilityisThetotalprofittobesharedacrossallSCstagesTheObjectiveofaSCMTheSCMinvolvesthemanagementofflowsbetweenandamongstagesinaSCtomaximizetotalprofitabilitySourcesofrevenueandcostOnlyonesourceofrevenue—customer,whichistheonlyrealpointofpositivecashflowinaSC.AllothercashflowsaresimplyfundexchangeswithintheSC.DecisionPhasesinaSupplyChain1.Strategy
decision(strategyordesign)howtostructuretheSCLocation,capacityofproduction,warehousingfacilities,productstobemadeandstored,modesoftransportation,typeofinformationsystemSCstrategydecisionsaremadetypicallyforthelongterm(amatterofyears).SCstrategydecisionsareveryexpensivetoalteronshortnotice.Musttakeintoaccountuncertaintyinanticipatedmarketconditionsoverthenextfewyears.DecisionPhasesinaSupplyChain2.SCPlanningDefineasetofoperatingpoliciesthatgovernshort-termoperationsTheSC’sconfigurationestablishesconstraintsShortertimehorizonandbetterforecastofdemand.Whichmarketssuppliedfromwhichlocations,Buildupofinventories,subcontractingofmanufacturing,replenishmentandinventorypoliciesIncorporateflexibilityintoSCOptimizeperformanceintheshortertermDecisionPhasesinaSupplyChain3.SCOperationWeeklyordailytimehorizonDecisionsregardingindividualcustomerordersTheSC’sconfigurationfixedPlanningpoliciesdefinedImplementtheoperatingpoliciesinthebestpossiblemannerAllocateindividualorders,shippingmodesetaduedate,deliveryschedulesReduceuncertaintyandoptimizeperformanceDecisionPhasesinaSupplyChainKeypointSCdecisionphasesmaybecategorizedasdesign,planning,oroperational,dependingonthetimeframeoverwhichthedecisionmadeapply.Thedesign,planningandoperationofaSChaveastrongimpactonoverallprofitabilityandsuccess.Dell,in1993,performedpoorly,itsstockpricedroppedsharplyImprovingthedesign,planning,operationofSCBothprofitabilityandstockpricesubsequentlyhavesoared.ProcessViewofaSCASCisasequenceofprocessesandflowsthattakeplacewithinandbetweendifferentSCstagesandcombinetofillacustomerneedforaproduct.1.CycleviewTheprocessesaredividedintoaseriesofcycles,eachperformedattheinterfacebetweentwosuccessivestagesofSC2.Push/pullviewPullprocessesareinitiatedbyacustomerorder.Pushprocessesareinitiatedandperformedinanticipationofcustomerorders.IntegratedLogisticsOrderProcessingInventoryTransportationFacilityNetworkWarehousingMaterialHandlingPackagingLogisticalIntegrationCustomersEnterpriseMarketDistributionManufacturingSupportProcurementSuppliersInformationFlowInventoryFlowMarketDistribution
OperatingConcernsMarketDistribution:Activitiesrelatedtoprovidingcustomerservice.Requiresperformingorderreceiptandprocessing,deployinginventories,storageandhandling,andoutboundtransportationwithinasupplychain.Includestheresponsibilitytocoordinatewithmarketingplanninginsuchareasaspricing,promotionalsupport,customerservicelevels,deliverystandards,handlingreturnmerchandise,andlife-cyclesupport.Theprimarymarketdistributionobjectiveistoassistinrevenuegenerationbyprovidingstrategicallydesiredcustomerservicelevelsatthelowesttotalcost.ManufacturingSupport
OperatingConcernsManufacturingSupport:Activitiesrelatedtoplanning,scheduling,andsupportingmanufacturingoperations.Requiresmasterscheduleplanningandperformingwork-in-processstorage,handling,transportation,andtimephasingofcomponents.Includestheresponsibilityforstorageofinventoryatmanufacturingsitesandmaximumflexibilityinthecoordinationofgeographicandfinalassembliespostponementbetweenmanufacturingandmarketdistributionoperations.Procurement
OperatingConcernsProcurement:Activitiesrelatedtoobtainingproductsandmaterialsfromoutsidesuppliers.Requiresperformingresourceplanning,supplysourcing,negotiation,orderplacement,inboundtransportation,receivingandinspection,storageandhandling,andqualityassurance.Includestheresponsibilitytocoordinatewithsuppliersinsuchareasasscheduling,supplycontinuity,hedging,andspeculation,aswellasresearchleadingtonewsourcesorprograms.Theprimaryprocurementobjectiveistosupportmanufacturingorresaleorganizationsbyprovidingtimelypurchasingatthelowesttotalcost.LogisticsInformationRequirementsStrategicObjectivesCapacityConstraintsLogisticsRequirementsManufacturingRequirementsProcurementRequirementsOrderProcessingOrderAssignmentDistributionOperationsTransportationandShippingProcurementInventoryDeploymentInventoryManagementPLANNING-COORDINATIONOPERATIONSForecastingEchelonedStructuredLogisticsSupplierIndustrialDistributionorConsolidationWarehouseManufacturerWholesalerorDistributionCenterRetailerCustomerINFORMATIONFLOWSEchelonedStructuredLogisticsSupplierIndustrialDistributionorConsolidationWarehouseManufacturerWholesalerorDistributionCenterRetailerCustomerSupportforDirectDeliveryINFORMATIONFLOWSFlexibleEchelonedStructuredLogisticsSupplierIndustrialDistributionorConsolidationWarehouseManufacturerWholesalerorDistributionCenterRetailerCustomerSupportforDirectDeliveryFlowThroughServiceSupplierArrangementsFlowThroughServiceSupplierArrangementsINFORMATIONFLOWSProcessView:CycleViewofSCsCustomerOrderCycleReplenishmentCycleManufacturingCycleProcurementCycleCustomerRetailerDistributorManufacturerSupplierinterfaceinterfaceinterfaceinterfaceLogisticalPerformanceCyclesNodeTransportationLinksCommunicationLinksMaterialSourceLeadSupplier(Tier1)ManufacturingPlantDistributorsCustomerPurchasingCycleManufacturingSupportCyclePhysicalDistributionCycleMaterialSourceMaterialSourceMaterialSourceManufacturingPlantPlantWarehouseDistributionWarehouseCustomerManufacturingPlantPlantWarehouseDistributionWarehouseCustomerManufacturingPlantPlantWarehouseDistributionWarehouseCustomer123Multi-EchelonedFlexibleNetworkCustomerOrderCycleAtthecustomer/retailerinterfaceIncludesallprocessesdirectlyinvolvedinreceivingandfillingthecustomer’sorder:CustomerarrivalCustomerorderentryCustomerorderfulfillmentCustomerorderreceivingBasicMarketDistributionPerformance-CycleActivitiesOrderProcessingOrderTransmissionCustomerOrderOrderSelectionOrderTransportationCustomerDeliveryReplenishmentCycleAttheretailer/distributorinterfaceIncludesallprocessesinvolvedinreplenishingretailerinventory:RetailerordertriggerRetailerorderentryRetailerorderfulfillmentRetailerorderreceivingManufacturingCycleAtthedistributor/manufacturerinterfaceIncludesallprocessesinvolvedinreplenishingdistributor(orretailer)inventory:Orderarrivalfromdistributor,retailer,orcustomerProductionschedulingManufacturingandshippingReceivingatthedistributor,retailer,orcustomerProcurementCycleAtthemanufacturer/supplierinterfaceIncludesallprocessesnecessarytoensurethatmaterialareavailableformanufacturingaccordingtoschedule.Keypoint:AcycleviewoftheSCClearlydefinestheprocessesinvolvedandtheownersofeachprocess.Usefulinoperationaldecisions,specifiestherolesandresponsibilitiesofeachmemberoftheSCandthedesiredoutcomeforeachprocess.Procurement-CycleActivitiesSourcingOrderPlacementandExpeditingReceivingTransportationSupplierPerformance-CycleUncertaintyOrderTransmissionTimeRange-Days1/231CustomerDeliveryTimeRange-Days1/231OrderTransportationTimeRange-Days2104OrderSelectionTimeRange-Days1202OrderProcessingTimeRange-Days142TotalPerformanceCycleTimeRange-Days54010CustomerDeliveryCycleProcessView:Push/PullViewofSCsProcurement,ManufacturingandReplenishmentcyclesCustomerOrderCycleCustomerOrderArrivesPUSHPROCESSESPULLPROCESSESTheImportanceofSCFlowsSCdecisionsplayasignificantroleinthesuccessorfailureofafirm.Dell:1984—1998($12billion)1993—earninggrowth>65%BasicSCmodel:directlysalestocustomerscustomer—manufacturer—supplierClosetocustomers,InformationchangeBetterforecasts,10day’sinventory(80-100day’s)Lowinventory:pricedecreasing,fewdefectsOutsourcing,cashflowmanagement,fivedayspaymentTheImportanceofSCFlowsQuakerOats:purchaseSnapple($1.7billion)Gatorade—sportsdrink,stronginthesouthandthesouthwest,manufacturingbyitself,sellthroughsupermarketandgrocerystoresSnapple—all-naturaldrinks,stronginnortheastandonthewestcoast,subcontract,sellthroughrestaurantandindependentretailers,UnabletogainmuchsynergybetweentwodistributionsystemsSoldforabout$300millionjust28mothslaterExamplesofSCsDell/CompaqToyota/GM/FordAmazon/Borders/BarnesandNobleWebvan/Peapod/JewelWhataresomekeyissuesintheseSCs?SupplyChainLogisticsManagementChapter3:CustomerAccommodationServiceOutputs:TheValueAddedDifferentsupplychainsprovidedifferentlevelsofserviceoutputtoconsumers/endusers: 1.SpatialConvenience 2.Lotsize 3.Waitingtime 4.Productvariety(assortmentwidthanddepth)StrategicPerspectivesHighlevelofBasicService-ThePlatformTargetedValue-Added
SatisfactionGrowththroughCustomer
SuccessSuccessSatisfactionBasicService3LevelsofCustomerFocusAchieveinternalstandards(e.g.,specifiedperformancecycleoffillrate)Meetcustomerexpectations(e.g.,arriveontimewithrightproductasmeasuredbythecustomer)Customersofchoiceachievetheirobjectives(e.g.,logisticsoperationcanprovideproductandserviceinamannerthatensureslongtermcustomerviability)3-70McGraw-Hill/IrwinSupplyChainLogisticsManagement,FirstEdition.Bowersox,Closs,andCooper.Copyright©2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.BasicServiceElementsAvailabilityFillratesStockoutsOrdersshippedcompleteOperationalPerformanceSpeedConsistencyFlexibilityRecoveryServiceReliability*damage*mis-shipments*etc.LogisticsCustomerServiceMix“PerfectOrder”Achievement
The“PerfectOrder”DefinedCompleteOrdersDeliveredToCustomersRequestedDateAndTimeInPerfectCondition,IncludingAllDocumentation..97x.97x.97x.97x.97x.97x.97x.97x.97x.97=.733-72McGraw-Hill/IrwinSupplyChainLogisticsManagement,FirstEdition.Bowersox,Closs,andCooper.Copyright©2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.WHATISCUSTOMERSATISFACTION?
SAT=F(Expectations,perceivedperformance)PerceivedPerformance-Expectations<0,DissatisfactionPerceivedPerformance-Expectations>=0,Satisfaction“MeetorExceedCustomerExpectations”AGENERICPROFILEOFEXPECTATIONS1.RELIABILITY
2.RESPONSIVENESS
3.COMPETENCE
4.ACCESS
5.COURTESY
6.COMMUNICATION
7.CREDIBILITY
8.SECURITY
9.TANGIBLES
10.KNOWINGTHECUSTOMERSATISFACTIONANDQUALITYMODELWordofMouth
CommunicationsRequirementsActual
PerformanceManagement
Perceptionsof
ExpectationsPerformance
StandardsPastExperienceExpectationsPerceived
PerformanceExternal
CommunicationsSELLERCUSTOMERGAP6GAP5GAP4GAP3GAP2GAP13-75McGraw-Hill/IrwinSupplyChainLogisticsManagement,FirstEdition.Bowersox,Closs,andCooper.Copyright©2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.CustomerSatisfactionVerySatisfiedVerySatisfiedSatisfiedVerySatisfiedSatisfiedSatisfiedDissatisfiedDissatisfiedDissatisfiedLOHIMEDHILOMEDExpectationPerformanceWHYCUSTOMERSATISFACTIONISNOTSUFFICIENTItfocusesoncustomer’sexpectations-nottheirrealrequirementsConsiderableresearchsuggeststhat“satisfied”customersstillarelikelytodefectThereisatendencybycompaniestotreatallcustomersasbeingequalandidentical3-77McGraw-Hill/IrwinSupplyChainLogisticsManagement,FirstEdition.Bowersox,Closs,andCooper.Copyright©2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.EvolutionofManagementThought
Philosophy
FocusCustomerService MeetInternalStandardsCustomerSatisfaction MeetExpectationsCustomerSuccess MeetCustomerRequirements
Noticethatthesatisfaction modeldoesnotfocuson requirementsMovingtoCustomerSuccessOurCustomer’sCustomerOurCustomerUsHowcanwehelpourcustomerswin?Thisisnotourproblem(WRONG)We’lldowhatever theytellus theywantDevelopmentofLogisticalCompetency0510GainingCost-effectivenessMarketAccessMarketExtensionMarketCreationStage1Stage2Stage3Stage4ACHIEVINGCUSTOMERSUCCESSNOTALLCUSTOMERSHAVETHESAMEREQUIREMENTSUNDERSTANDYOURCUSTOMERS'REQUIREMENTSKNOWYOURCUSTOMERS'PROCESSESHOWCANYOURCAPABILITIESENHANCECUSTOMERS'PERFORMANCE?NEWPERFORMANCEMETRICSSupplyChainLogisticsManagementChapter4:MarketDistributionStrategyMarketingFunctionsPerformedbyChannelArrangementsGroup
FunctionExchange Selling BuyingLogistics Transportation StorageFacilitation Financing
Standardization Risk
Market InformationPrincipleofMinimumTransactionsManufacturerManufacturerManufacturerRetailerRetailerRetailerRetailerRetailerRetailerNoIntermediariesPrincipleofMinimumTransactionsManufacturerManufacturerManufacturerRetailerRetailerRetailerRetailerRetailerRetailerOneIntermediaryWholesalerLogisticalAndMarketingSeparationLogisticalChannelMarketingChannelFactorywarehouseRegionalwarehouseCompanytruckRetailerDistributorDirectsalesofficeGeneralsalesofficeLocaldeliveryPublicwarehouseCommoncarrierConsumer(1)(6)(5)(4)(3)(2)(4)(3)(2)(1)(7)(5)GenericChannelsOfDistributionFarmsandRawMaterialsManufacturersWholesalersRetailersConsumers,Government,andIndustrialUsersTypicalChannelStructureManufacturerConsumer/EnduserRetailer/DealerWholesaler/DistributorAgents/BrokersDirectIndirectThreeDimensionsofChannelStructureNumberoflevelspresentinthechannelChannellength“Directvsindirect”NumberofintermediariesateachlevelintensiveexclusiveselectiveTypesofintermediariesateachlevelagents/merchantsspecialized/generalwholesalers/retailersChannelMappingAchannelmapisapictureofcurrentchannelsusedtoreachallendusersegments.Completingachannelmaprequires: 1.identificationofallendusersegmentsserved. 2.isolatingthepathsusedtoreacheachsegment. 3.specifyingthefunctions/processesperformedineachpath. 4.specifyinghowthefunctions/processesare performedbythefirmandexternalorganizations. 5.specifyingtheeconomicsateachstageineach path(volumes,revenues,margins,discounts, costs) 4-90McGraw-Hill/IrwinSupplyChainLogisticsManagement,FirstEdition.Bowersox,Closs,andCooper.Copyright©2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.ChannelMap:FoodProcessorManufacturerBrokers/agentsNatl...Accts.SalesCompanysalesforceFoodserviceDistributorsHospitalsRestaurantsSchoolsFull-servicewholesalersCash&CarrywholesalersRetailchainsandstoresConsumersMilitarydistributorsMilitaryInstallationsLessonsLearnedNotalltasksneedtobeperformedbyagivenchannelAgivenchanneldoesn’tnecessarilybestservealltheneedsofagivensegment.Taskstobeperformeddriveappropriatestructure,nottheotherwayaround.ChannelMap-FoodProcessorManufacturerBrokers/AgentsNationalAccountSalesCompanySalesForceMilitaryDistributorsMilitaryInstallationsFoodserviceDistributorsFull-serviceWholesalersCash&CarryWholesalersHospitalsSupermarkets,massmerchants,etc.ConsumersSchoolsRestaurantsMatrixApproachDemandGenerationTasksLeadGenerationDirectSalesDirectMailTelemarketingDistributorsPresalesQualifyingSalesClosingPost-SalesServiceSourcesLargeLot-SizeLargeLot-SizeLargeLot-SizeAllCustomersAllCustomersAllCustomersSmallLot-SizeSmallLot-SizeSmallLot-SizeClassificationofChannelRelationshipsBasedOnAcknowledgedDependencyTransactionalStructureSingleTransactionConventionalRelationalVoluntaryArrangementsAdministeredPartnershipsandAlliancesContractualJointVentureDependencyIncreasedFormalization,information-sharingandconnectivityEmpoweredConsumersLookAtManufacturersasRetailers“Wheninthepurchaseprocessareyoulikelytovisitamanufacturer'swebsite?”WhennotbuyingtheirproductsWhenresearchingaproductAfterdecidingwhattobuyandwheretobuyitTomakeapurchaseAfterdecidingwhattobuy,butnotwheretobuyitAfterbuying,tofindoutaboutrepairandserviceoptionsAfterbuying,forhelpinstallingandconfiguringaproductAfterbuying,toregisterawarrantyAwarenessConsiderationPreferencePurchasePost-sale45%75%16%42%27%25%31%40%EmpoweredConsumersLookAtManufacturersasRetailers“Whatkindofinformationhaveyoulookedforonthemanufacturer’ssitewithinthelast6months?”Productinformation 79%Productprices 79%Wheretobuyspecificproducts 49%Customersupport 44%AccessoryinformationaboutaproductIalreadyown 42%Newproductdevelopments 37%Warrantyandguaranteeinformation 35%Installationandconfigurationinfo. 31%Generalcompanyinformation 31%Howtoconnectwithpeople withsimilarinterests 4%Basedonsurveysfrom8,842onlineconsumers.DatafromForrester’sTechnographicsOnlineRetail&Media2000Fieldstudy(ForresterResearch,Inc.,Report:ChannelConflictCrumbles,March2000,p.2)SupplyChainLogisticsManagementChapter5:ProcurementandManufacturingStrategiesPurchasingvs.ProcurementPurchasingisnormallyassociatedwithafunctionalactivityProcurement/Sourcingshouldbeviewedasastrategicactivityforthebusiness.Purchasingvs.Sourcing(cont’d)PurchasingMentalityOnecontractatatimeWin-loseImmediatereturnsSecretiveCurrentneedscanbemetLowestpurchasepriceMultiplesuppliersInfrequentinteractionCriticismBuyer-salesrelationshipSafetyinnumbersQualityinspectedInventoryassafeguardSourcingMentalityContinualImprovementWin-winLong-termperspectiveTrustingStrategicfitexistsTotalcostofownershipSupply-basereductionFrequentinteractionConstructiveevaluationsCross-functionalrelationshipSafetyinknowledgeQualityatsourceInformationassafeguardSupplierDevelopmentThroughProcurementTheProcurementViewpointSupplierPurchaserProcurementInitiativeMarketingResponseSupplierPurchaserMarketingInitiativePurchasingResponseTheMarketingViewpointImportanceofSourcingIntheaveragemanufacturingfirmpurchasedgoodsandservicesaccountfor55%ofeverysalesDollarDirectlaborcostsaccountforonlyabout10%ofthesalesdollarProcurement’sPotentialPayoffBeginningPositionSales $100,000,000Purchases(55%) 55,000,000Labor(15%) 15,000,000Other(22%) 22,000,000Pre-taxprofit(8%) 8,000,000Procurement’sPotentialPayoffCompetingthroughSourcingQua
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