An inventory management system that uses an EDI through which a retailer sends sales information to a manufacturer. The manufacturer then can create a computer generated sales forecast and delivery schedule
Also known as quick-response (QR) systems in retailing, are inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems.
- Reduced Lead Time (allows better forecasting)
- Increased Product Availability
- Lower Inventory Investment
JIT systems require not only financial support from top management but also a psychological support by members
4. Designing the Supply Chains
Supply Chain Struckture
Customer Expectations: Manufacturers, need to know where their target market customers expect to find their products and those of their competitors
Supply Chain Member Characteristics: The larger and more sophisticated the channel member, the less likely that it will use supply chain intermediaries. Larger firms often perform the supply chain functions themselves, to gain more control, be more efficient, and save money.
Intensive Distribution: Designed to get products into as many outlets as possible (Consumer packaged goods)
Exclusive Distribution: exclusive geographic territories to few retailers, no other retailers in the territory can sell a particular brand (selected customers represent their products)
Selective Distribution: few selected retailers in a territory, elps maintain a particular image, controls the flow of merchandise into an area
5. Managing Relationships
Through Vertical Marketing Systems (VMS)
Is a supply chain in which the members act as a unified system.
- Administered VMS
- Contractual VMS
- Corporate VMS
Through Strategic Relationships
- Mutual Trust
- Open Communication
- Common Goals
- Credible Commitments
The dominant channel member controls the channel relationship.
- no common ownership
- no contractual relationships
Independent firms at different levels of the supply chain join together through contracts
- economies of scale
- better coordination
- reduces conflict.
Nearly all aspects of the supply chain is controlled by the corporate company.