Marketing bán hàng - Chapter 10: Information systems and supply chain management

Chapter 10Information Systems and Supply Chain ManagementRetailing StrategyRetail Market StrategyFinancial StrategySite LocationInformation SystemsRetail LocationsCustomer Relationship ManagementOrganizational Structure and HR Management2Supply Chain Management Supply chain management is the delivery of economic value to customers through management of the flow of physical goods and associated info from vendors to customersRyan McVay/Getty Images3Strategic Importance of Supply Chain ManagementOpportunity to Reduce CostsTransportation CostsInventory Holding CostsProvide Value to Customers by Making the Right Merchandise is in the Right Place at the Right TimeFewer StockoutsGreater Assortment with Less InventoryImproved ROI4Return on assets = Net profit margin x Asset turnover Net profit = Net profit x Net sales Total assets Net sales Total assetsImprove Return on InvestmentEfficient Supply Chain Management  Higher Asset TurnoverSame Sales Using Less Inventory5Illustration of Supply Chain6Benefits of Efficient Supply Chain Management Fewer stockouts – merchandise will be available when the customer wants them Tailoring assortments – the right merchandise is available at the right store Customers respond to the convenience as evidenced by increased salesRyan McVay/Getty Images7High Return on InvestmentAn efficient supply chain can improve a retailer’s ROIIncreases sales – customers are offered more attractive assortmentsNet profit is improved by increasing gross margin and lowering expensesInventory levels are lower, lower investment and total assets are lower with asset turnover higherPhotoLink/Getty Images8Wal-Mart’s Sustainable Advantage Wal-Mart’s success is its information and supply chain management systems. Why are competitor’s lagging behind?Ryan McVay/Getty ImagesThe software is unavailable elsewhere and is constantly updated and improvedWal-Mart made a substantial investment in developing its systems and has the scale economies to justify it.9Minimizing StockoutsRoyalty-Free/CORBISForecast demand accuratelyMake sure merchandise in stockrooms is on the shelvesBuyers place orders at the right time with vendorsStores need to place orders with distribution centers in a timely fashionDistribution Centers need to send right quantitiesManagers need to provide enough lead time for deliveries10Information and Merchandise Flow11Information Flow12Flow of Merchandise Efficient supply chain would know the customer Store would advertise to these customers Buyers would purchase more of this wine Distribution center would be prepared to distribute the winePhotoLink/Getty Images13Information Flow 2. Information about purchase is transmitted from POS terminal to the buyer/planner 3. Information about purchases are aggregated by buyer/planner and sent to distribution center and vendor to ship merchandise 1. When customer makes apurchase, sales associatescans UPC code or RFID chip on merchandise and customer credit card/loyalty card Steve Cole/Getty ImagesStockTrek/Getty Images14Information Flow 6. Store managers inform distribution center about receipt of merchandise and coordinate deliveries 4. Buyer/planner communicates withvendor and places a purchase orderto re-supply stores. 5. Buyer/planner notifies distributioncenter about incoming orders andhow they are to be distributed to storesDavid Buffington/Getty ImagesPhotoLink/Getty Images15Data Warehousing Data warehousing is the coordinated and periodic copying of data from various sources, both inside and outside the enterprise, into an environment ready for analytical and informational processing Wal-Mart makes good use of its data warehouse. It should. Experts estimate that it is second in size only to that of the U.S. government16Royalty-Free/CORBISElectronic Data InterchangeEDI is the computer-to-computer exchange of business documents between retailers and vendors Merchandise salesInventory On HandOrdersAdvanced shipping noticesReceipt of merchandiseInvoices for payment17EDI Security There are implications of security failures (loss of data, loss of public confidence), but retailers have security policy objectives:Ryan McVay/Getty ImagesAuthentication – system assures person on other end of session is who it claims to beAuthorization - that person has permission to carry out requestIntegrity – info arriving is the same that was sent18Benefits of EDIReduces cycle time – inventory turnover is higherImproves overall quality of communications through better record-keepingInformation can be easily analyzedStockbyte/Punchstock Images19Advantages of Using a Distribution CenterEffects of forecast error for individual stores are minimizedEnables retailers to carry less merchandise in the storeEasier to avoid running out of stockRetail store space is more expensive than space at the distribution centerRyan McVay/Getty Images20Logistics Strategy Pull Supply ChainMerchandise shipped to stores based on sales and inventory levels in the stores Push Supply ChainMerchandise shipped to the stores based on forecasted sales rate (c) Brand X Pictures/PunchStock21Merchandise Flow22Activities Performed by Distribution CenterManaging inbound transportationReceiving and checking merchandiseStoring or cross docking merchandisePreparing merchandise for the sales floorTicketing and markingPutting on hangersShipping merchandise to storesManaging outbound transportationRyan McVay/Getty Images23Who Can Use DC’s?Retailers selling non-perishable merchandiseRetailers offering merchandise that has highly uncertain demand like apparelRetailers selling merchandise that needs to be replenished frequentlyRetailers that carry a large number of items shipped in broken case quantities like drug storesRetailers with many outletsRyan McVay/Getty Images24CrossdockingMerchandise flows directly from the vendor’s trucks through the retailer’s distribution center and is loaded on the trucks going to the retailer’s stores without being stored in the distribution centerRyan McVay/Getty Images25Reverse LogisticsRetailers recover loss through on-line auctions© image100 LtdThe McGraw-Hill Companies, Inc./Andrew Resek, photographerSteve Cole/Getty ImagesRoyalty-Free/CORBIS Customer Store Distribution Center Vendor 26Bull-Whip Effect An uncoordinated channel of built up inventory when retailers and vendors do not coordinate their supply chain activities27What Causes a Bull-Whip Effect?Delays in transmitting orders and receiving merchandiseOver-reacting to shortageOrdering in batches rather than generating a number of small ordersChad Baker / Ryan McVay/Getty Images28Retailers and Vendors Work TogetherUse EDIExchange information to reduce need for backup inventory, improve sales forecasts and production efficiencyVendor manage inventoryCollaborative planning, forecasting and replacementPhotoDisc/Getty ImagesBy working together they can reduce the level of inventory in the chain and reduce the number of stockouts.29Initial Efforts at Coordinating Vendor and Retailer Supply ChainEfficient Consumer Response (ECR) – Food RetailingQuick Response (QR) - Apparel30Packaged Goods ManufacturersPromotions > Advertisingconsumer promotions - couponstrade dealsWhy?Short-Term OrientationCompetitive ReactionPower of Supermarkets31Efficient Consumer ResponseTrade Promotions ==> Forward Buying ==> Extremely Uneven ProductionMotivation for Packaged Goods MfrgStop Price Promotion, Forward BuyingLevel Out DemandMotivation for SupermarketsRise of Warehouse Clubs/Discount StoreUse of EDLP PricingNeed to Become More EfficientExcessive Inventory - $30 Billion32Response by ManufacturersP&G - Reduce Consumer Promotion Increase AdvertisingBuild Brand Image, LoyaltyReduce Price SensitivityEvery Day Whole Price - No Trade Promotions33Mfg-Distributor/Retailer Fashion, Clothing – Quick Response ConsumerInherently Unpredictable DemandOld Solution - Over Buyer and MarkdownQuick ResponseProvide Initial AssortmentForecast Sales for Intermediate FormMonitor Early SalesMake Final Assortment34Vendors and Retailers Working TogetherInherent ConflictMotivating Collaborative SolutionsMutual Idiosyncratic Investment – Credible Commitments – Schilling (NATO Troop)Need Safe GuardsTrust vs. Contracts35Vendor Managed Inventory36Radio Frequency Identification Radio Frequency Identification (RFID) allows an object or a person to be identified at a distance using radio waves.Reduces warehouse and distribution labor costsReduces point of sale labor costsInventory savings by reducing inventory errorsReduces theft – products can be trackedReduces out of stock conditions(c) Digital Vision/PunchStock37Why the Hesitation with RFID?RFID is expensive – the return on investment is lowIt still only makes sense to put tags on pallets, cartons, expensive merchandise or high theft itemsRFID generates more data than what can be currently processedJeff Maloney/Getty Images38