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 |  Marketing A McGraw Hill and QUT Custom Publication
Integrating Supply Chain and Logistics Management
Learning ObjectivesChapter 9 - Outline
AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO:
- Explain what supply chain and logistics management are and how they relate to marketing strategy.
- Understand the distinction between supply chain responsiveness and efficiency.
- Explain how managers trade off different "logistics costs" relative to customer service in order to make a supply chain decision.
- Recognize how customer service in logistics decisions contributes to customer value and successful marketing programs.
- Describe the key logistics functions of transportation, warehousing and materials handling, order processing, and inventory management and the role of third-party logistics providers.
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Chapter 9 - Summary
- Logistics involves those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost. Logistics management includes the coordination of the flows of both inbound and outbound goods, an emphasis on making these flows cost-effective, and customer service.
- A supply chain is a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users. Supply chain management is the integration and organization of information and logistics across firms for the purpose of creating value for consumers.
- The goals to be achieved by a firm's marketing strategy determines whether its supply chain needs to be more responsive or efficient in meeting customer requirements. Marketers today recognize that the choice of a supply chain involves three steps: (a) understand the customer, (b) understand the supply chain, and (c) harmonize the supply chain with the marketing strategy.
- The objective of information and logistics management in a supply chain is to minimize logistics costs while delivering maximum customer service. Information can leverage logistics activities, reduce total logistics costs, and improve customer service.
- Minimizing total logistics cost is irrelevant without specifying an acceptable customer service level that must be maintained. Although key customer service factors depend on the situation, important elements of the customer service program are likely to be time-related dependability, communications, and convenience.
- Four key logistics functions in a supply chain include (a) transportation, (b) warehousing and material handling, (c) order processing, and (d) inventory management. Third-party logistics perform most or all of the logistics functions that manufacturers, suppliers, and distributors would normally perform themselves.
- The modes of transportation (e.g., railroads, motor carriers, air carriers, and trucks) offer shippers different service benefits. Better service often costs more, although it should result in savings in other areas of the logistics system.
- The function of warehousing and material handling in a supply chain is to facilitate storage and movement of goods. Distribution centers provide flexibility and facilitate sorting and consolidating products from different plants or different suppliers.
- Inventory management and order processing go hand in hand in a supply chain. Both functions have benefited from information technology. Two popular supply chain inventory management practices are just-in-time and vendor-managed inventory management systems.
- Reverse logistics closes the loop in a supply chain. Reverse logistics is the process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal.
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2003 McGraw-Hill Higher Education