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Reminders#
! Next Case: Lenovo
! LinkedIn Group: Presentation Grades for ! (1) McDonalds and Bhopal ! (2) Nike and Zara ! (3) Article 1 and Lenovo
Internal#Supply#Chain#
Procurement! Produc,on! Storage! Distribu,on! Sales!and!Marke,ng!
GOODS!
RETURNS!
Closed-Loop Supply Chain (CLSC)#
! Incorporates!tradi,onal!forward!supply!chain!and!reverse!supply!chain!
! due!to!environmental!regula,ons,!product!returns!and!residual!value!of!endFofFlife!products!
Philippine#Legislation#
! Republic!Act!(RA)!9003!or!the!Ecological!Solid!Waste!Management!Act!of!2000!! Incen,ve!scheme!for!private!organiza,ons!to!
develop!projects!or!ac,vi,es!in!reFuse,!recycling!and!reduc,on!
! 10Fyear!tax!and!duty!exemp,on!on!imported!capital!equipment,!vehicles,!legacies,!giTs!and!dona,ons!used!for!collec,on!of!solid!waste!
! Tax!credit!equivalent!to!50%!of!the!na,onal!internal!revenue!taxes!and!custom!du,es!
Philippine#Legislation#
! Consumer!Act!of!the!Philippines!(Republic!Act!No.!7394)!! Enforcement!of!warranty!or!guarantee!! Purchaser!needs!only!to!present!either!the!warranty!
card!or!the!official!receipt!along!with!the!product!to!be!serviced!or!returned!to!the!immediate!seller;!No!other!documentary!requirement!shall!be!demanded!from!the!purchaser!
Mode of Transport#
! Road!Transport!! Advantages:!
! Compe,,veness!(there!are!many!third!party!operators)!
! WellFdeveloped!road!systems!with!pricing!not!related!to!usage!(flat!rate)!
! Disadvantages:!! Environmental!–!traffic!conges,on,!air!pollu,on!! Subject!to!unforeseen!delays!and!adverse!weather!! Subject!to!pilfering!
Mode of Transport#
! Sea!Transport!! Refrigerated!(reefer)!ships!! RollFon!RollFoff!(RO/RO)!ferry!ships!for!short!sea!
routes!(Road)!! Container!ships!
! 2,000F6,000!20FT!containers!per!vessel!! Interna,onal!Organiza,on!for!Standardiza,on!(ISO)!
container!standard!design!
Mode of Transport#
! Sea!Transport!! Advantages:!
! Cost!advantage!over!air!freight!!! Ability!to!move!large!volumes!of!bulky!or!heavy!freight!!! More!environmentally!friendly!than!air!freight!!! Good!road!transport!link!from!ports!!
! Disadvantages:!! Speed!!! Mul,!handling!at!ports!!! Can!be!affected!by!adverse!weather!condi,ons!!! Increased!documenta,on!!! Greater!Packaging!requirements!!! May!have!affect!on!inventory!requirements!
Mode of Transport#
! Airfreight!! Alterna,ve!mode!for!lowFvolume,!highFvalue,!urgent!
freight!!! Advantages:!
! Speed!of!delivery!–!this!reduces!inventory!cost!and!investment!and!is!suitable!for!seasonable!or!perishable!items!!
! Reliability!of!delivery!–!again!reduces!the!necessary!inventory!investment!in!safety!and!buffer!stock!
! Environmental!condi,ons!–!there!is!less!requirement!for!packaging!and!cover!as!the!probability!of!damage!and!pilfering!is!less!
! Comprehensive!scheduled!network!! Close!to!good!road!networks!!
Mode of Transport#
! Airfreight!! Disadvantages:!
! High!Cost!!! Limited!Capacity!(mainly!suitable!for!goods!with!a!high!
value!to!weight!ra,o!i.e.!Small,!higherFvalue!goods)!!! Subject!to!delays/suscep,ble!to!adverse!weather!
condi,ons!!! Cannot!be!used!for!dangerous!substances/good!!! There!may!be!no!airport!nearby!
Third#Party#Logistics#
! Outsource!your!transport!issues!to!a!Logis,cs!Company!or!Forwarding!Agent!
! Sa,sfactory!solu,on!albeit!at!a!cost!premium!
How#to#Manage#3PL#Performance#
! OnF,me!delivery!(OTD)!
! Delivery!accuracy!
! Loss!or!damage!
! Failure!to!deliver!
! Delivery!delays!
Future#Trends#
! Longer!trucks!with!extra!trailers!will!become!more!common!in!order!to!reduce!costs.!Use!of!road!trains!(‘biFtrens’)!is!increasing!in!Brazil!!
! The!growth!of!internet!purchases!by!consumers!with!direct!delivery!to!homes!will!have!an!impact!on!companies'!logis,cs!strategies!!
Philippine Distribution Channels#Supplier!
Distributors! Key!Accounts!
Wholesalers!/!Supermarkets!/!Groceries!
Retailers!
Consumers!
Distributor!Specialists!
Key!Account!Specialists!
Supermarkets#
! Large!retails!stores!selling!various!products!such!as!food,!household!wares!and!personal!items,!arranges!in!sec,ons!
! Must:!! Have!at!least!3!permanent!and!func,onal!check!out!
counters!(COC)!with!cash!registers!! Be!selfFservice!(push!carts!/!baskets!are!provided)!! Have!at!least!50%!of!display!area!devote!to!grocery!
items!! Have!gondolas!and!mass!displays!
Grocery#Stores#
! Smaller!than!supermarkets!but!generally!sells!the!same!line!of!products!
! Sells!more!food!than!nonFfood!items!
! Presence!of!1!or!2!cash!registers!
Convenience Store Chains#
! Similar!to!Grocery!Store!in!terms!of:!! Number!of!COC!! Selling!area!of!Grocery!Store!(GSA)!! Product!lines!being!carried!
! Difference:!! Must!be!opera,onal!at!least!21!hours!per!day!! Usually!airFcondi,oned!! Usually!under!franchise!! Sells!goods!at!rela,vely!higher!prices!–!Why?!! Has!uniformed!sales!staff!! Has!limited!parking!space!for!customers!
Sari-Sari Stores#
! Small!neighborhood!store!selling!a!wide!variety!of!food!and!nonFfood!by!piece!and!oTen!by!the!lowest!possible!quan,ty!(“,ngi”)!
! Does!not!issue!receipts!
! Does!not!allow!customers!to!pick!things!they!want!to!buy:!goods!in!display!are!beyond!customer’s!reach!
! Usually!sells!reFpacked!items!
Department#Stores#
! NonFfood!products!
! Features!include:!! Products!are!separated!by!sec,ons!/!departments!! At!least!3!cash!registers!
Drug#Store#Chain#
! Primarily!engaged!in!the!retail!sales!of!drugs!and!medicines,!toiletries,!and!novelty!items!
! With!3!or!more!outlets!! Mercury!outlet!! NonFMercury!outlet!
Wholesalers#
! Displays!include!loose!and!boxed!items!intended!for!wholesale!and!retail!
! Prices!are!generally!lower!than!most!supermarkets!
! Usually!have!large!number!of!regular!buyers!to!whom!he!extends!credit!terms!for!short!periods!
Distributors#
! Strategic!business!partner!that!delivers!sales!fundamentals!for!the!Principal’s!products!within!a!specific!geography!and!channel!
! Provides!a!costFefficient!and!costFeffec,ve!means!of!reaching!the!consumers!
! Ensure!market!coverage!and!product!availability!
! Essen,al!link!between!Principal!and!its!consumers!
Merchandising#
! Conducted!at!the!point!of!purchase!to!influence!the!shoppers!to!buy!the!product!
! Moving!stocks!away!from!the!shelves!towards!the!shoppers’!bags!
! Cri,cal!link!in!the!SC!–!func,on!between!distribu,on!and!marke,ng!
Merchandising#
! Types!of!Purchases!! Planned!Purchase!
! Take!careful!planning!! Normally!listed!down!
! Impulse!Purchase!! The!more!displays!you!have,!the!beoer!for!your!
product!! e.g.!cashier!display!items!
Internal#Supply#Chain#
Procurement! Produc,on! Storage! Distribu,on! Sales!and!Marke,ng!
GOODS!
RETURNS!