Supply Chain Management Quiz

Supply Chain Management (SCM)

• SCM is the coordination of all activities involved in the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer.
• SCM should start with a focus on the customer and their satisfaction.
• Buyers, sellers, marketing intermediaries, and facilitating agencies must work together to create a cooperative relationship.

Technology in SCM

• Technology such as blockchain and AI have improved SCM capabilities, allowing for more efficient data collection and analytics.
• This helps organizations within the supply chain to track and record product and component movements from sourcing, processing, and storage, to the expiration date and ultimate purchase by the consumer.

Marketing Channels

• Marketing channels are key to the supply chain, connecting producers and customers.
• Their goal is to make products available at the right time, in the right place, and in the right quantities to ensure customer satisfaction.
• Marketing intermediaries serve as middlemen, connecting producers to other intermediaries or to the ultimate customers.
• Marketing channels are an important component of the marketing mix, determining a product's market presence and accessibility, as well as entailing long-term commitments among a variety of firms.

Types of Marketing Channels

• There are two types of marketing channels: long and short.
• Long channels involve several intermediaries that specialize in certain elements of the production and distribution process, resulting in added value to customers and cost savings.
• Short channels involve direct selling from manufacturer to retailer or consumer, and are common for products with low cost per unit and little or no selling effort.

Distribution Options

• Businesses have two main options for distributing their products: industrial distributors and manufacturers' agents.
• Industrial distributors carry standardized items and are most effective when a product has broad market appeal, is easily stocked and serviced, and is sold in small quantities.
• Manufacturers' agents are independent businesspeople who sell complementary products of several producers in assigned territories and are compensated through commissions.

Channel Selection

• Firms must consider customer characteristics and product attributes when selecting an appropriate marketing channel.
• Business customers prefer to deal directly with producers and buy in large quantities, while consumers generally buy from retailers in small quantities and do not mind limited customer service.
• Environmental factors such as economic conditions, technology, and government regulations can affect channel selection, while characteristics of intermediaries can also be taken into consideration.

Distribution Strategies

• Intensive distribution is used for products with high replacement rates, while selective distribution is used when customer service is important.
• Exclusive distribution is used for products that are purchased infrequently, consumed over a long period of time, or require a high level of customer service.

Supply Chain Management Goals

• Supply chains can be a source of competitive advantage and a strong market orientation to achieve desired objectives.
• Successful supply chains focus on competitive priorities such as speed, quality, cost, and flexibility.
• Channel members hold certain expectations of each other, so partnerships and cooperation are key for effective supply chain management.

Channel Integration

• Channel integration, either vertically or horizontally, can be achieved by combining two or more stages of the marketing chain under one management.
• This can help reduce costs and increase coordination.