supplychainplanningoperations part 5.pptx

supplychainplanningoperations part 5.pptx

1. Supply Chain Planning & Operations Part 5 Supply Chain Distribution

2. Distribution Issues in Supply Chain Management

3. What is Supply Chain Distribution? Supply chain distribution refers to your methodology for getting products to consumers. With a formal distribution plan that’s implemented rigorously, you reduce cycle times for product deliveries.

4. What is Supply Chain Distribution? Supply chain distribution refers to the processes and activities involved in delivering a product from the manufacturer or producer to the end consumer. It encompasses the entire flow of goods, information, and finances as products move through various stages of the supply chain. Effective distribution is crucial for ensuring products reach the right place at the right time, in the right quantities, and at an optimal cost.

5. What is Supply Chain Distribution? Objectives of Supply Chain Distribution Cost Efficiency: Minimize the costs associated with storage, transportation, and handling while maximizing value. Speed and Reliability: Ensure timely delivery of products to meet customer expectations and improve satisfaction. Flexibility: Adapt to changes in demand, supply disruptions, or market conditions with minimal impact on operations. Product Availability: Maintain the right inventory levels to prevent stockouts or overstock situations. Sustainability: Implement environmentally friendly practices in distribution activities, such as optimizing routes to reduce fuel consumption and emissions.

6. What is Supply Chain Distribution? Challenges in Supply Chain Distribution Demand Variability: Fluctuations in customer demand can lead to stockouts or excess inventory. Transportation Costs: Rising fuel prices and other costs can impact distribution budgets. Globalization: Managing distribution across international borders involves navigating different regulations, tariffs, and logistics complexities. Technology Integration: Implementing and maintaining advanced systems for tracking and managing distribution can be challenging.

7. What is Supply Chain Distribution? Importance of Effective Distribution Competitive Advantage: Efficient distribution can differentiate a company by providing superior service and faster delivery times. Customer Satisfaction: Timely and accurate delivery builds trust and loyalty among customers. Profitability: Optimized distribution reduces operational costs, leading to improved margins and financial performance. By focusing on efficient distribution practices, companies can enhance their overall supply chain performance, meeting customer needs while managing costs effectively.

8. Balancing Supply and Demand ▶ There are four main distribution channels that a company can choose when looking for ways to best market their products. ▶ Options include direct sales, wholesale, brokerage, and dual distribution. ▶ For best practices, carefully choose your supply chain distribution partners.

9. Balancing Supply and Demand Balancing supply and demand is a critical aspect of supply chain management that involves aligning the production and distribution of goods with customer demand to optimize efficiency, minimize costs, and enhance customer satisfaction. Achieving this balance ensures that inventory levels are neither too high (leading to excess costs) nor too low (causing stockouts and missed sales opportunities).

10. Balancing Supply and Demand Challenges in Balancing Supply and Demand Demand Variability: Unpredictable changes in customer preferences and external factors can lead to demand fluctuations. Supply Chain Disruptions: Natural disasters, geopolitical events, or supplier issues can impact supply reliability. Complexity of Global Operations: Managing a global supply chain with diverse markets, regulations, and customer preferences adds complexity to balancing efforts.

11. Balancing Supply and Demand Benefits of Balancing Supply and Demand Cost Efficiency: Optimizing inventory levels and reducing waste leads to lower operational costs. Customer Satisfaction: Meeting customer expectations consistently enhances loyalty and brand reputation. Profitability: Efficiently managing supply and demand results in better resource utilization and improved financial performance.

12. Balancing Supply and Demand Best Practices for Maintaining Balance Continuous Monitoring: Regularly review and update forecasts, inventory levels, and supply chain strategies to adapt to changing conditions. Supplier Collaboration: Foster strong relationships with suppliers to improve communication and coordination, enhancing supply chain resilience. Technology Investment: Continuously invest in technology solutions that provide greater visibility and control over supply chain processes. By implementing these strategies, organizations can effectively balance supply and demand, ensuring they meet customer needs while optimizing operational efficiency and profitability.

13. Direct Sales ▶ Products go directly to the buyer with no intermediaries or intervening partners between them. ▶ An athletic apparel company who manufactures sports shoes and sells them through an e-commerce website or at their own retail store is employing a direct channel of distribution. ▶ Direct sales is best for products that have a mid-price point ▶ The products should be affordable enough to have broad appeal. Direct sales also require that products sold have an extended shelf-life. This Photo by Unknown Author is licensed under CC BY-SA

14. Wholesale ▶ In a wholesale distribution model, a wholesaler buys goods from a manufacturer and then sells them to retailers and other businesses. ▶ Wholesalers take on the responsibility of storing and distributing the goods to retailers or other businesses, so the manufacturer doesn’t have to do so. ▶ As a reseller, wholesale companies take on more of the risk if products don’t sell since buyers purchase directly from them. This Photo by Unknown Author is licensed under CC BY-SA

15. Brokerage ▶ A broker warehouse distribution is a type of distribution system in which a broker is used to facilitate the movement of goods from a warehouse to retail store locations. ▶ The broker typically works with several different warehouses and store locations and is responsible for ensuring that the merchandise is delivered to the stores in a timely and efficient manner.. ▶ Brokers work as a go-between for manufacturers and retailers. This Photo by Unknown Author is licensed under CC BY-SA

16. Dual Distribution ▶ It is a system of marketing channel organization in which a manufacturer uses two approaches simultaneously to get products to end-users ▶ For instance, the company may decide to offer both direct sales and wholesale. ▶ Franchises are one business model that frequently uses more than one type of distribution channel.

17. Supply Chain Distribution An organization may choose to sell products directly to their clients while others use third-parties for distribution purposes. In order to be successful, your supply chain distribution should be formalized through an organized plan. ▶ When creating the plan, the expectation is that companies will review the different distribution options open to them and choose the best option for their customer base and product line. ▶ Your distribution plan should be able to handle any type of market changes, including supply disruptions and demand increases.

18. Supply Chain Distribution Supply chain distribution is a crucial aspect of supply chain management, focusing on the movement of goods from manufacturers to the end consumers. It encompasses the entire process of delivering products, ensuring they reach the right place at the right time, in the right condition, and at an optimal cost. Effective distribution is essential for maintaining customer satisfaction, optimizing inventory levels, and minimizing operational costs.

19. Supply Chain Distribution Objectives of Supply Chain Distribution Cost Efficiency: Minimize the costs associated with storage, transportation, and handling while maximizing value. Speed and Reliability: Ensure timely delivery of products to meet customer expectations and improve satisfaction. Flexibility: Adapt to changes in demand, supply disruptions, or market conditions with minimal impact on operations. Product Availability: Maintain the right inventory levels to prevent stockouts or overstock situations. Sustainability: Implement environmentally friendly practices in distribution activities, such as optimizing routes to reduce fuel consumption and emissions.

20. Supply Chain Distribution Challenges in Supply Chain Distribution Demand Variability: Fluctuations in customer demand can lead to stockouts or excess inventory. Transportation Costs: Rising fuel prices and other costs can impact distribution budgets. Globalization: Managing distribution across international borders involves navigating different regulations, tariffs, and logistics complexities. Technology Integration: Implementing and maintaining advanced systems for tracking and managing distribution can be challenging.

21. Supply Chain Distribution Importance of Effective Distribution Competitive Advantage: Efficient distribution can differentiate a company by providing superior service and faster delivery times. Customer Satisfaction: Timely and accurate delivery builds trust and loyalty among customers. Profitability: Optimized distribution reduces operational costs, leading to improved margins and financial performance.

22. Supply Chain Distribution Best Practices for Effective Distribution Leverage Technology: Use advanced systems and analytics to improve visibility and control over distribution processes. Enhance Collaboration: Foster strong relationships with suppliers, logistics providers, and customers to improve coordination and efficiency. Focus on Flexibility: Develop the ability to adapt quickly to changes in demand and supply chain disruptions. Sustainability Initiatives: Implement eco-friendly practices, such as reducing packaging waste and optimizing transportation routes to lower carbon emissions. By focusing on efficient distribution practices, companies can enhance their overall supply chain performance, meet customer needs, and manage costs effectively.

23. What is the difference between supply chain distribution and logistics? ▶ In supply chain management, you’ll often see the terms distribution and logistics used interchangeably. The two terms aren’t quite the same (and neither one quite accounts for the increasing importance of transportation marketing).

24. Logistics ▶ Logistics describes how products get from their origin point to the location at which customers buy them. It prioritizes efficient paths from warehouses and inventories to points of sale. It involves the following processes: Materials handling Supply and demand planning Information flow Supply chain security Inbound transportation management Outbound transportation management Fleet management Production Network design Order fulfillment Third-party logistics (3PL) management, but only if you outsource your logistics processes

25. Distribution ▶ Supply chain distribution is logistics in practice. If logistics is the process of figuring out how products will get from the manufacturer to the point of sale, then distribution describes actually getting those products where they’re going. For example, let’s say your warehouse facility produces 100 units of the item you sell per day, and a nearby department store has placed an order of 300 units. Logistics is the process of determining how to get those 300 units to the department store in a timely, cost-efficient fashion. Distribution is the act of successfully getting the order to the department store. Distributing your product will involve inventory management, packaging and warehousing.

26. Four Channels of Distribution ▶ Although there are four distribution channels, emerging technologies are changing the way products are getting to consumers. ▶ Partners all along the “traditional” distribution and supply chain channel are being challenged by new entrants into supply and distribution markets across many industries. The waters have been muddied by the Internet and the introduction of consumers and end-users into supply chain distribution.

27. Four Channels of Distribution The “new” supply chain and distribution channel has several key components, which fall under the supply chain management “umbrella.” These components include: Distribution : The physical logistics of moving inventory along a chain of distribution. Inventory management : The entities that control how much is moved and where it is stored. Customers : identifying who the “real” customers are and keeping their loyalty despite all of the changes to the supply chain and  distribut i on channel .

28. Plan the chain of distribution carefully Manage your plan from within you chain, not from above. If you use statistics and historical data, you are not getting the whole picture. Talk to your partners and understand their needs using the traditional one-on-one approach.

29. Plan the chain of distribution carefully Careful planning of the distribution chain is essential for ensuring that products reach customers efficiently and cost-effectively. A well-planned distribution strategy can significantly impact customer satisfaction, operational efficiency, and overall business success.

30. Plan the chain of distribution carefully Challenges in Distribution Planning Demand Variability: Unpredictable changes in customer demand can complicate distribution planning. Supply Chain Disruptions: Natural disasters, geopolitical events, and other disruptions can impact the distribution network. Global Complexity: Managing international distribution involves navigating diverse regulations, tariffs, and cultural differences.

31. Plan the chain of distribution carefully Benefits of Effective Distribution Planning Cost Efficiency: Optimized distribution reduces operational costs and improves profitability. Customer Satisfaction: Timely and accurate delivery enhances customer experience and loyalty. Competitive Advantage: A well-executed distribution strategy can differentiate a company by providing superior service and market reach.

32. Plan the chain of distribution carefully Best Practices for Distribution Planning Align with Business Goals: Ensure that distribution planning aligns with overall business objectives and strategies. Engage Stakeholders: Involve key stakeholders, including suppliers, logistics providers, and customers, in the planning process. Focus on Flexibility: Build flexibility into the distribution network to adapt quickly to changes in demand and market conditions. By carefully planning the chain of distribution, companies can enhance their supply chain performance, reduce costs, and deliver exceptional value to their customers.

33. Choose your distribution chain players Whom do you trust to make you successful? The answer should be your distributor partner. Not only is that partner a known commodity, but they can also provide business in the growing global market. Your newest partner could be half a world away, thanks to globalization and the new global economy.

34. Choose your distribution chain players Choosing the right players for your distribution chain is a critical decision that can significantly impact the efficiency, cost-effectiveness, and success of your supply chain operations. The selection of distribution partners, such as suppliers, logistics providers, and intermediaries, should align with your business objectives and customer expectations.

35. Choose your distribution chain players Challenges in Choosing Distribution Players Alignment of Goals: Ensuring all partners share and support your business goals and objectives can be challenging. Cultural Differences: Navigating cultural differences and communication barriers, especially in international partnerships, requires careful management. Changing Market Dynamics: Adapting to evolving market conditions and customer expectations may require adjustments in your partner network.

36. Choose your distribution chain players Benefits of Choosing the Right Distribution Players Operational Efficiency: Working with the right partners streamlines operations and improves efficiency across the supply chain. Cost Savings: Effective partnerships can lead to cost savings through optimized processes and economies of scale. Enhanced Customer Satisfaction: Reliable and efficient distribution ensures timely delivery and improves customer satisfaction and loyalty.

37. Choose your distribution chain players Best Practices for Partner Selection Conduct Due Diligence: Perform thorough research and evaluation before selecting partners to ensure alignment with your business needs. Foster Collaboration: Encourage collaboration and open communication with partners to build strong, lasting relationships. Focus on Continuous Improvement: Regularly assess and refine partnerships to address any gaps and adapt to changing needs. By carefully selecting and managing distribution chain players, companies can enhance their supply chain performance, reduce costs, and deliver superior value to customers.

38. Use supporting distribution chain management software Technology has made supply chain management for distributors manageable and reliable. Supply chain management software helps in planning, projecting and implementing the chain of distribution.

39. Use supporting distribution chain management software Using supporting distribution chain management software is essential for optimizing and streamlining distribution processes within the supply chain. Such software solutions enhance visibility, improve efficiency, and enable better decision-making across various distribution activities.

40. Use supporting distribution chain management software Challenges and Considerations Integration Complexity: Integrating new software with existing systems can be complex and requires careful planning. Data Security: Ensure the software provides robust security measures to protect sensitive data. Change Management: Prepare for potential resistance to change by involving stakeholders and providing necessary training and support.

41. Use supporting distribution chain management software Examples of Distribution Chain Management Software SAP SCM: A comprehensive supply chain management suite that offers advanced planning, logistics, and analytics capabilities. Oracle SCM Cloud: A cloud-based solution that provides integrated logistics, procurement, and inventory management features. Manhattan Associates: Offers solutions for warehouse management, transportation management, and inventory optimization. Blue Yonder (formerly JDA Software): Provides solutions for supply chain planning, execution, and optimization with AI-driven insights.

42. Distribution issues ▶ Distribution issues in supply chain management refer to challenges and problems that arise during the movement of goods and services from the point of origin to the point of consumption. ▶ These issues can disrupt the efficiency and effectiveness of the distribution process, leading to delays, increased costs, and customer dissatisfaction. ▶ Addressing these distribution issues requires proactive management, improved visibility, streamlined processes, effective use of technology, collaboration among stakeholders, and a continuous focus on optimizing the distribution network. This Photo by Unknown Author is licensed under CC BY

43. Distribution issues ▶ Common distribution includes: Inventory Management Transportation and Logistics Warehousing and Storage: Order Fulfillment Reverse Logistics Information and Communication Regulatory and Compliance

44. Distribution issues Distribution issues can significantly impact the efficiency and effectiveness of a supply chain, leading to increased costs, delayed deliveries, and reduced customer satisfaction. Understanding common distribution challenges and how to address them is crucial for maintaining a smooth and reliable supply chain.

45. Distribution issues Best Practices for Overcoming Distribution Issues Leverage Technology: Use technology solutions such as Transportation Management Systems (TMS) and Warehouse Management Systems (WMS) to improve efficiency and visibility. Engage in Continuous Improvement: Regularly assess distribution processes and implement improvements to address inefficiencies and emerging challenges. Build Strong Relationships: Foster strong relationships with suppliers, logistics providers, and customers to improve collaboration and problem-solving. By understanding and addressing these distribution issues, companies can improve their supply chain performance, enhance customer satisfaction, and achieve greater operational efficiency.

46. Inventory Management ▶ Maintaining an optimal level of inventory is crucial for smooth distribution. Issues such as inaccurate demand forecasting, stockouts, overstocking, and inadequate inventory visibility can lead to inefficiencies and disruptions in the distribution process.

47. Transportation and Logistics ▶ Managing transportation logistics involves coordinating multiple modes of transportation, routes, carriers, and warehouses. Issues like delays in transit, damaged goods, inefficient routing, capacity constraints, and poor coordination among stakeholders can impact timely delivery and increase costs.

48. Warehousing and Storage ▶ Problems in warehousing and storage facilities can lead to inefficiencies in the distribution process. Issues such as inadequate space, improper layout, inefficient material handling, suboptimal inventory placement, and lack of technology integration can result in delays, errors, and increased handling costs.

49. Order Fulfillment ▶ Accurate and timely order fulfillment is essential for customer satisfaction. Challenges like order processing errors, picking and packing mistakes, inadequate order tracking, and poor communication can lead to delayed or incorrect deliveries, customer complaints, and loss of business .

50. Reverse Logistics ▶ Managing product returns, repairs, and recycling processes, collectively known as reverse logistics, can be complex. Issues like inadequate return policies, improper handling of returned goods, ineffective product disposition, and lack of visibility can lead to increased costs, customer dissatisfaction, and environmental concerns.

51. Reverse Logistics Distribution issues can significantly impact the efficiency and effectiveness of a supply chain, leading to increased costs, delayed deliveries, and reduced customer satisfaction. Understanding common distribution challenges and how to address them is crucial for maintaining a smooth and reliable supply chain.

52. Reverse Logistics Reverse logistics is an essential component of supply chain management that deals with the process of moving goods from the customer back to the manufacturer or seller. It encompasses a wide range of activities related to the return of products, recycling, refurbishing, and disposal. Effective reverse logistics can enhance customer satisfaction, reduce costs, and contribute to sustainability efforts.

53. Reverse Logistics Challenges in Reverse Logistics Complex Processes: Managing the reverse flow of goods can be more complex than forward logistics due to variability in product conditions and return reasons. High Costs: Returns can incur significant costs related to transportation, inspection, and processing. Inventory Management: Accurately tracking and managing returned inventory can be challenging. Product Quality Issues: Frequent returns due to quality issues can indicate problems with product design or manufacturing processes.

54. Reverse Logistics By effectively managing reverse logistics, companies can enhance customer satisfaction, reduce costs, and contribute to sustainability efforts, ultimately strengthening their overall supply chain performance.

55. Information and Communication ▶ Effective communication and information sharing among supply chain partners are vital for smooth distribution. Issues such as data inaccuracies, poor visibility across the supply chain, limited collaboration, and outdated technology platforms can hamper coordination, decision-making, and responsiveness.

56. Regulatory and Compliance ▶ Effective communication and information sharing among supply chain partners are vital for smooth distribution. Issues such as data inaccuracies, poor visibility across the supply chain, limited collaboration, and outdated technology platforms can hamper coordination, decision-making, and responsiveness.

57. Why Global Supply Chains May Never Be the Same