Supply Chain Management

1. Definition of Supply Chain Management

The Management of upstream and downstream relationships with suppliers and costumers to deliver superior customer value at less cost to the supply chain as a whole.
[Christopher, 2005]

Figure 1 – Supply Chain Management

Factors influencing channel structure:
Outsourcing.
Postponement and speculation.
Speed.
Technological, cultural, physical, social, and political factors.
Physical factors – geography, size of market area, location of production centers, and concentration of population.
Local, state, and federal laws.
Social and behavioral variables.

5. Flows in the Channel of Distribution
Figure 2 – Distribution’s Channels of a manufacturer of grocery products

6. Channel Design
The design process consists of the following steps:
Establish objectives.
Formulate a strategy.
Determine structure alternatives.
Evaluate structure alternatives.
Select structure.
Determine alternatives for individual channel members.
Evaluate and select individual members.
Measure and evaluate channel performance.
Evaluate alternatives when performance objectives are not met, or attractive new options become available.

8. Product characteristics
Product value.
Technicality of the product.
Degree of market acceptance.
Degree of substitutability.
Product bulk.
Product perishability.
Degree of market concentration.
Seasonality.
Width and depth of the product line.