Marketing Logistics and Supply Chain Management

Marketing Logistics and
Supply Chain
Management
 The tasks involved in planning, implementing and controlling
the physical flow of materials, final goods and related
information from points of origin to points of consumption to
meet customer requirements at a profit.
 It involves the following:
 Outbound distribution
 Inbound distribution
 Reverse distribution
 Involves the entire supply chain management system
Outbound Distribution : moving products from factory
to resellers and ultimately to customer.
Inbound Distribution: moving products and materials
from suppliers to factory.
Reverse Distribution: moving broken, unwanted, or
excess products returned by consumers or resellers.
Involves entire supply chain management : managing
upstream and downstream value added flows of materials,
final goods, and related information among suppliers, the co.,
resellers and final consumers
 Offers firms a competitive advantage
 Can yield cost savings
 Greater product variety requires improved
logistics
 Improvements in distribution efficiency are
possible due to information technology
Most cos. State their logistics objective as providing max.
customer service at least cost.
However, No system can both maximize customer service
and minimize costs.
Firms must first weigh the benefits of higher service
against the costs.
State goals in terms of a targeted level of customer service
at the least cost.
 Warehousing:
o Production & consumption cycles rarely match, this arises

need of warehouses.
o overcomes differences in quantities & timing, ensuring products
are available when customers ready to buy.
o Co. has to decide on how many & what type of warehouses it
needs where they are to be located.
o Co. may use storage warehouse or distribution centers
o Storage warehouse store goods for moderate to long periods.
:Distribution centers A large highly automated
warehouse designed to receive goods from various plants and
suppliers, take orders, fill them efficiently and deliver goods to
customers as quickly as possible.
Warehouse: It is a commercial building for storage of

goods. Used by manufacturers, importers, exporters,
wholesalers, transport businesses, etc. They usually have
loading docks to load and unload goods from trucks.
Central warehousing corporation :
 A premier Warehousing Agency in India, established during

1957 providing logistics support to the agricultural sector,
It is one of the biggest public warehouse operators in the
country offering logistics services to a diverse group of
clients.
CWC is operating 482 Warehouses across the country with
a storage capacity of 10.4 million tonnes providing
warehousing services for a wide range of products ranging
from agricultural produce to sophisticated industrial products.
Inventory management is primarily about specifying the size
and placement of stocked goods.
Inventory management is essential to
Meet variations in customer demand:
Meet unexpected demand
Smooth seasonal or cyclical demand
Pricing related:
Temporary price discounts
Hedge against price increases
Take advantage of quantity discounts
Process & supply surprises
Internal – upsets in parts of or our own processes
External – delays in incoming goods.
Reasons not to hold too much inventory
Carrying cost
Financially calculable
Takes up valuable factory space
Especially for in-process inventory
Inventory covers up “problems” …
That are best exposed and solved
Independent demand
Uncertain / forecasted
Continuous Review / Periodic Review
Dependent demand
“Requirements” / planned
Materials Requirements Planning / Just in Time
Functions of Inventory Management
Track inventory
How much to order
When to order
Prioritization
Inventory Management Approach
EOQ
Continuous / Periodic
Choice of transportation carrier affects pricing of products,
delivery performance and condition of goods when they
arrive.
In shipping goods to warehouses, dealers and customers the
co. choose among 5 modes of transportation: truck, rail, water,
pipeline, and air.
Internet for digital products.
Shippers also use intermodal transportation- combination of
2 or more modes: piggyback (rail + truck), fishyback(water
+truck ), trainship(water + rail), airtruck (air + truck).
In choosing transportation mode for a product,
shippers must balance various considerations:
Speed, dependability, availability, cost, etc.
Logistics information management
• Cos. Manage their supply chains through
information.
• Information flows such as customer orders, billing,
inventory levels and even customer data closely
affect the channel performance.
• Cos. Look for simple, fast, accessible, accurate
process for capturing, processing & sharing
customer information.
• Information may be shared through mail or phone,
salespeople, traditional or internet based EDI,
It emphasizes teamwork, both inside the company
and among all marketing channel organisations, to
max. the performance of entire distribution system.
Inside org. all departments must work closely
together to max. co’s own logistics performance.
Outside, co. must integrate its logistics system with
suppliers and customers to max. performance of
entire distribution system.
 logistics activities are handled by various departments
such as Mktg., sales, finance, operations, purchasing.
Each dept. tries to optimize its own logistics
performance without regard for activities of other
functions. This can lower logistics performance
Decisions of different depts. Must be coordinated to
achieve better overall logistics.
Close relationship among depts. can be achieved by
 creating permanent logistics committees, made of
managers responsible for different physical distribution
funcn.
Cos. Can have logistics V.P. with cross functional
authority.
Cos. Can implement system wide supply chain mgt.
software Ex-SAP
Buiding logistics partnerships
• It accounts for working with other channel
partners to improve whole channel distribution.
• Cos. Can build strong partnerships with
suppliers and customers to inc. customer service
& reduce channel costs.
• Many cos. Have created cross functional,
cross company teams. Ex- P&G
Third party Logistics
• Most cos. Love to manufacturer and sell products.
They outsource the logistics activities to a third
party.
• Third party performs various logistics activities
such as bundling, loading, unloading, sorting
storing, reloading, transporting, customs clearing
and tracking required to supply their factories and
products to customers.
• Third Party Logistics
• A 3PL provider is a company which supplies
/co-ordinates logistics functions across multiple
links in the supply chain.
• The company acts as a ‘third party’ facilitator
between seller/manufacturer (the ‘first party’)
and buyer/user (the ‘second party’).”
• A lot of multinational automobile makers, like
Suzuki, Honda, and Ford, have set up
manufacturing bases in India, and have been
major users of 3PL services.
Benefits of 3PL
• 3rd party can do it more efficiently and at lower
cost (with full focus on logistics)
• Frees a co. to focus more intensly on its core
business.
• Helpful in expanding global market coverage
( due to understanding of highly complex
logistics environment)
Activities outsourced
• Inventory management
• Order picking
• Fleet management & Consolidation
• Labelling & Packaging
• Inbound warehousing
• Outbound warehousing
• Import/ Export management
• Customer clearing & forwarding
• Inbound transportation
• Outbound transportation
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Marketing Logistics and

o Production & consumption cycles rarely match, this arises

Warehouse: It is a commercial building for storage of

 A premier Warehousing Agency in India, established during

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