The Distribution Management Environment
In Chapter 1, the supply chain is described as a network consisting of suppliers, producers, channel intermediaries, and customers. Classically, each supply chain entity performs a detailed set of channel functions. The mission of suppliers is to provide materials to producers who make finished goods that in turn are warehoused and distributed by channel intermediaries to the end-customer. This compartmentalized view of the supply chain, while providing recognizable silos into which channel businesses are easily grouped, does not correspond to how channel processes actually work. Many manufacturers bypass the use of intermediaries and perform distribution functions such as finished goods storage, channel management, and delivery to customers. In turn, many channel intermediaries pursue light manufacturing and postponement strategies. Instead of rigid boundaries, the performance of channel functions are not the preserve of anyone channel entity but depend on the way a company responds to the challenges driven by business objectives and strategies, marketplace requirements, the nature of the product and the production process, and the expectations of the customer.
- 1.All reference to the APICS Dictionary in this chapter are from the 14th edition (2013).Google Scholar
- 2.This definition can be found at www.cscmp.org/resources-research/glossary-terms.
- 3.Bowersox, Donald J., Patricia J. Daugherty, Cornelia L. Droge, Dale S. Rogers, and Daniel L. Wardlow. 1989. Leading edge logistics: Competitive positioning for the 1990s, 34–35. Oak Brook: Council of Logistics Management.Google Scholar
- 4.Ibid., 41.Google Scholar
- 5.Ibid., 83–84.Google Scholar
- 6.These alternative channel formats have been attained from the North American Industry Classification System located at www.census.gov/eos/www/naics/; Kotler, Philip, and Kevin Lane. 2006. Marketing management, 12th ed, 520–522. Englewood Cliffs: Prentice Hall; Bowersox and Cooper, Strategic marketing channel management, 40–44; and Coughlan, Anne T., Erin Anderson, Louis W. Stern, and Adel I. El-Ansary. 2001. Marketing channels, 6th ed, 19–27. Upper Saddle River: Prentice Hall.
- 7.Tompkins International. 2013. Industrial distribution at a crossroads. Tompkins International White Paper, January 2013.Google Scholar
- 8.Bucklin, Louis P. 1978. Productivity in marketing, 90–94. Chicago: American Marketing Association.Google Scholar
- 9.For further discussion on these points see Kotler, Marketing management, 570; Bowersox and Cooper, Strategic marketing channel management, 74–79; and Coughlan, Marketing channels, 88–92.Google Scholar
- 10.These divisions of channel transactions are further discussed in Bowersox and Cooper, Strategic marketing channel management, 15–16.Google Scholar
- 11.The three-part division of demand was introduced by Mentzer, John T., and Mark A. Moon. 2004. Understanding demand. Supply Chain Management Review 8(4): 38–45.Google Scholar
- 12.These figures are detailed in Rogers, Dale S., Ron Lembke, and John Benardino. 2013. Reverse logistics: A new core competency. Supply Chain Management Review 13(3): 42.Google Scholar
- 13.Elkington, John. 1997. Cannibals with forks: Triple bottom line of 21st century business. New York: John Wiley & Sons.Google Scholar