36 terms

14 Supply Chain Management

supply chain management
refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize systemwide costs while satisfying the service levels their customers require.
those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial business users.
marketing channel
the set of institutions that transfer the ownership of and move goods from the point of consumption; consists of all the institutions and marketing activities in the marketing process.
logistics management
the integration of two or more activities for the purpose of planning, implementing, and controlling the efficient flow of raw materials, in-process inventory, and finished goods from the point of origin to the point of consumption.
distribution center
a facility for the receipt, storage, and redistribution of goods to company stores or customers; may be operated by retailers, manufacturers, or distribution specialists.
universal product code (upc)
the black and white bar code found on most merchandise.
advanced shipping notice
an electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment.
electronic data interchange (edi)
the computer-to-computer exchange of business documents from a retailer to a vendor and back.
a secure communication system contained within one company, such as between the firm's buyers and distribution centers.
a collaborative network that uses internet technology to link businesses with their suppliers, customers, or other businesses.
cycle time
the time between the decision to place an order and the receipt of merchandise.
vendor-managed inventory (vmi)
an approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer's inventory levels in each of its stores.
reorder point
the stock level at which a new order is placed.
collaborative planning, forecasting, and replenishment (cpfr)
an inventory management system that uses an electronic data interchange (edi) through which a retailer sends sales information to a manufacturer.
pull supply chain
strategy in which orders for merchandise are generated at the store level on the basis of demand data captured by point-of-sales terminals.
push supply chain
strategy in which merchandise is allocated to stores in the basis of historical demand, the inventory position at the distribution center, and the stores' needs.
the person who coordinates deliveries to distribution centers.
the process of recording the receipt of merchandise as it arrives at a distribution center or store.
the process of going through the goods upon receipt to ensure they arrived undamaged and that the merchandise ordered was the merchandise received.
radio frequency identification tags (rfid)
tiny computer chips that automatically transmit to a special scanner all the information about a container's contents or individual products.
a distribution method whereby merchandise is unloaded from the shipper's truck and within a few hours reloaded onto trucks going to stores. these items are prepackaged by the vendors for a specific store.
merchandise that is ready to be placed on the selling floor immediately.
ticketing and marking
creating price and identification labels and placing them on the merchandise.
pick ticket
a document or display on a screen in a forklift truck indicating how much of each item to get from specific storage areas.
just-in-time inventory systems (jit)
inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems; the firm gets the merchandise "just in time" for it to be used. if the manufacturer of another product, in the case of parts or components, or for sale when the customer wants it, in the case of consumer goods; also known as quick response (QR) systems in retailing.
quick response
an inventory management system used in retailing; merchandise is received just in time for sale when the customer wants it.
lead time
the amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller's store, ready for sale.
supply chain
the group of firms that make and deliver a given set of goods and services.
channel conflict
this conflict occurs when supply chain members are not in agreement about their goals, roles, or rewards.
independent (conventional) supply chain
a loose coalition of several independently owned and operated supply chain members- a manufacturer, a wholesaler, and a retailer- all attempting to satisfy their own objectives and maximize their own profits, often at the expense of the other members.
vertical marketing system
a supply chain in which the members act as a unified system. there are three types: administrated, contractual, and corporate.
administered vertical marketing
a supply chain system in which there is no common ownership and no contractual relationships, but the dominant channel member controls the channel relationship.
contractual vertical marketing
a system in which independent firms at different levels of the supply chain join together through levels of the supply chain join together through contracts to obtain economies of scale and coordination and to reduce conflict.
a contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor.
corporate vertical marketing
a system in which the parent company has complete control and can dictate the priorities and objectives of the supply chain; it may own facilities such as: manufacturing plants, warehouses, retail outlets, and design studios.
strategic (partnering) relationship
a supply chain relationship that the members are committed to maintaing long-term, investing in opportunities that are mutually beneficial; requires mutual trust, open communication, common goals, and credible commitments.