Supply Chain Management

1
Supply Chain Management

• The Product from Source to the Ultimate Customer

2
Supply Chain Management (SCM)

• Seamless integration of business processes from
  end user through original suppliers that provides
  products, services, and information that add
  value for the customers.
• Focus is on managing relationships, information
  and materials flow across organizational borders
  based on actual user demand to cut costs and
  enhance flow

3
Functions Executed Throughout Supply Chain

• Sourcing
• procurement
• product design
• product scheduling

• manufacturing
• order processing
• inventory management
• materials handling
• warehousing
• customer service

4
SCM Partnership

• Required to achieve the benefit of SCM
• may require sharing of sensitive/proprietary
  information/materials
• joint planning and communications
• cross functional teams (internal/external
  partners)
• must tear down functional silos to integrate
  marketing, production, procurement, sales and
  logistics

5
SCM Goals

• Waste reduction
• minimize duplication
• harmonize operating systems
• enhance quality
• Time compression
• order-to-delivery cycle
• enhanced cash flow

• Flexible response
• meeting unique customer needs in a profitable
  manner
• Unit cost reduction
• driving costs to the lowest possible level for
  the service requested

6
Logistics

• Design and management of all activities necessary
  to make materials available for manufacturing and
  to offer finished products to customers in a
  timely manner.
• Effective business marketing DEMANDS efficient,
  systematic delivery of finished goods to
  intermediaries and industrial users

7
Logistics can...

• Become the next way to create value
• be an immediate source of savings

• Become an important marketing discipline
• be seen as a critical extension of production
  flexibility
• be seen as a customer service relationship builder

8
Remember

• Logistical service is critical to the buyers
  evaluation of business marketing firms
• Logistical service generally ranks second only to
  product quality as a desired supplier
  characteristic
• Business marketer must monitor the impact of
  logistics on all supply chain members and on the
  overall supply chain performance potential for
  competitive advantage

9
Assessing Market Opportunities

• Segmenting the Business Market

10
The Art of Business Market Segmentation

• Identify groups of consumers that are
• sufficiently large
• sufficiently unique
• to justify a separate marketing strategy

11
Survey of B2B Firms

• 20 customers 80 sales
• large portion of current customers contribute
  little to profitability

12
B2B Marketers Criteria For Market Segment
Potential

• Measurability
• evaluate info on buyer characteristics
• accessibility
• degree to which the firm can focus its marketing
  efforts on chosen segments
• substantiality
• size/profitability of segment warrants separate
  attention

• Compatibility
• match between the firms marketing and business
  strengths and competitive and/or technological
  state of the market
• responsiveness
• segment response to marketing mix elements

13
Competitive Analysis

• Firm attempts to define
• industry boundaries
• competitors
• determine strengths and weaknesses of rivals
• anticipate their actions
• core competencies of competitors

14
Benefits of B2B Segmentation

• Organizational marketer forced to become more
  attuned to the unique needs of customer segments
• Creates guidelines to allocate marketing resources

• This leads to
• new product development
• develop profitable pricing
• select appropriate channels of distribution
• develop and target ad messages
• train and develop sales force

15
Activity

• Using your knowledge of industrial segmentation,
  outline a strategic approach to analysing the
  segmentation of markets for the company you have
  selected for the case analysis.