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IDIS > ID Exam 1 Review > Flashcards

ID Exam 1 Review Flashcards

(50 cards)

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1
Q

Consumer Channel Design

A

Manufacturer -> Wholesaler -> retailer -> consumer

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2
Q

Industrial Channel Design

A

Manufacturer -> Master distributor -> Distributor -> End user

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3
Q

Manufacturers of Industrial channels don’t sell directly to end user because:

A
  • They’re Set up in EVERY market area to sell
    – Very expensive to establish and maintain
    – Large volume must be sold in this method to be profitable
    – Efficiency is essential to reach a profit
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4
Q

Types of End users

A

-OEM
-MRO/ Facilities
-Contractors

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5
Q

Required Services have three components of Customer Value:

A

-Form
-Place
-Time

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6
Q

Distribution consists of three components:

A

-Knowledge
-Logistics
-Financing

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7
Q

Types of Knowledge

A
  • Product Knowledge
    – Specifications
  • Product Application
  • Vendor Knowledge
  • Customer Knowledge
  • Financing Knowledge
  • Logistical Knowledge
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8
Q

Types of Financing

A
  • Traditional Lending
  • Consignment
  • Extending Credit
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9
Q

Components of Logistics

A

*Wait time
* Delivery time
* Local delivery
* Reverse Logistics
* Breaking bulk
* Packaging
* Assortment
* Local Access
* Purchase time

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10
Q

Customer Value

A

The greater the difference between the service outputs of the manufacturer and the requirements of the consumer, the more likely intermediaries will be used

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11
Q

Levels of Distribution

A

Exclusive -> Selective -> Intensive

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12
Q

Supple Chain Management

A

A management system that coordinates and integrates all the activities performed by supply chain members into a seamless
process, from the source to the point of
consumption, resulting in enhanced
customer and economic value.

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13
Q

Why is a supply chain needed?

A

– Inadequate finances for necessary functions
– Customers’ desire for product assortment
– Better rate of return on core business (Outsourcing)
– Contact “efficiency

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14
Q

Five Basic Functions Involved in Moving a Product from Manufacturer
to the Final End User:

A

– Selling - Providing technical and market information to those who
specify, purchase, manufacture, or install industrial products.
Understanding the customer’s business to be able to solve problems.
– Maintaining a local inventory of products on the shelf for immediate
delivery or pickup.
– Extending credit to industrial customers
– Providing transportation to the user’s location
– Servicing products after they have been sold and sometimes even
after they have been installed.

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15
Q

Why Distributors Have Channel Power

A
  • Economics of providing distribution functions
  • Distributors leverage customer and manufacturer relationships:
  • Distributors provide value-added services
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16
Q

Major trends benefiting distributors

A

*Increasing value of information: Distributors have
information about demand, usage trends, production
capacities, etc.
* Move towards mass customization: Product
personalization is the key to winning business & the
distributor plays a very important role in this.
* Increase use of Just In Time inventory: Products must
be stored close to customers using JIT
* Reductions in number of vendors: Product must be
sold in correct assortments

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17
Q

Manufacturer-Distributor Relations

A
  • Evolving customer expectations are creating new
    demands on the distributor, which affect the role of the
    manufacturer
    – New business models, such as integrated supply
    – Alignment of activities for mutual benefit
    – Understanding changes in manufacturer’s policies & their impact on the distributor
    – Key performance matrices which distributors have of their suppliers and suppliers of their distributors
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18
Q

Future role of Distribution

A
  • Continued channel consolidation and acquisition
  • Implementation and benefits of strategic alliances
  • Key channel performance metrics
  • End-user purchasing strategies
  • Implementation and use of technology
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19
Q

Product Based Purchasing

A

– Buy what can be sold at profit
– Distributor decides what to buy, sales team figures out
to whom it can be sold at a profit
– A little “Old School” but still exists in many channels

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20
Q

Customer Based Purchasing

A

– Distributor decides to buy based on the requirements of
the customers they are serving
– Tries to provide products at desired service level and
most economical cost

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21
Q

Cost Reduction through

Study These Flashcards
A

– Buying large quantities
– Purchasing before price increase
– Buying sufficient quantities to get a freight allowance
– Cash discounts
– Special promotional items, carrying larger discounts
– Sufficient volume of business over extended period of time to
earn a factory rebate
– National buying groups

22
Q

Purchasing and Profitability: Areas of Concern:

Study These Flashcards
A

– Reward System
– Invariability
– Product Line Acceptability

23
Q

Purchasing and Profitability: Replenishment

Study These Flashcards
A

– Order-Point-Order Quantity Formula
– Electronic Data Interchange

24
Q

Receiving

Study These Flashcards
A

-Best place to learn the products, paper flow and general business operations
– Never start new employees or trainees here (they should start in picking, packing, and shipping)
* Bill of Lading
* Purchase Orders
– Verify with Manufacturers Packing Slip and checked against items actually received

25
Blind Check
- most complete and thorough check – Made without an invoice, and then sent to purchasing to be verified with the invoice
26
Invoice Check
- less expensive and time consuming but more satisfactory check – Check with the packing slip
27
Bar Code Scanning
-fastest, most reliable and most accurate method of receiving – Automatically cross-checked with purchase order
28
Professional Selling Positions (Problem-Solving Sales)
-concerned with quality, product performance, availability, maintenance requirements, accessibility of repair parts, product recycling, post-sale service. – Counter Sales – Inside Telephone Sales – Outside Sales
29
Counter Sales
*Consists of product display and counter separating customer from the storage area * Provide information and answer technical questions – Waits on customer – Fills order – Writes invoice * Promote product and company * Good interpersonal and selling skills required
30
Inside telephone/email sales
* No face to face interaction with customer makes it more difficult as the representative cannot see the product or the facial responses or cues of the customer * Must be able to analyze and respond quickly * Should have good problem solving skills
31
Outside Sales
* Representative should be a specialist in the customer’s business area * Meets the customer in person at the customers’ business place * Should have sufficient product knowledge, should be able to advise customers and recommend product and services that will help the customer by reducing their operating costs, saving money and solving problems
32
Sales Manager
* Training, coordination, evaluation, technical expertise of inside and outside sales force. * Set goals and quotas for salespeople * Identify important accounts and primary products to those accounts * Evaluate results and reward those who meet objectives * Major role in determining product lines to purchase and inventory
33
Order Filling
* Also known as “picking” * One of the important operations * Picker should know the exact matching item and location * Should use most efficient picking method and route * Should pick the exact quantity in a timely manner * Accuracy is the key * Wrong picking will lead to lower customer satisfaction and cost to reship the right items and costs involved with other RMA activities
34
Buy-Outs
* Required when merchandise ordered by customer not available in inventory * Normally buy-outs are done from the local competitor to satisfy customer orders * Better forecasting will lead to less instances of buy-outs
35
Packing
* After the sales order is picked, merchandise is packed in boxes or cartons so that it can be shipped to the customer * Packing should be done with care to avoid damage to the merchandise * After packing the boxes, shipping labels are attached indicating the packing list, the name of the customer, and destination address
36
Shipping
* Dispatched to – Freight lines for out of town customers – Delivery department for local customers – “Will call” locations where customer can pick them up
37
RFID tag
- Common when shipping & receiving - uses electromagnetic fields to automatically identify and track tags attached to objects.
38
Manufacturer Motivations:
–Product Design *Research *Engineering –Production *Market size *Market share *Large volume runs
39
Manufacturer’s Responsibility
* Producing quality products * Maintaining consistent lead-times * Creating markets –End user and specifier calls –Advertising in magazines, trade journals, internet,trade shows, etc. * Printed or electronic catalogs * Provide technical information and training * Protect the channel (Design Wins) * Understand value and compensate channel partners
40
Manufacturer Sales Representative (Factory Rep)
* Responsible for sales in a given territory * May call on end users, distributors, specifiers, or agents * Titles include –Manufacturer Representative –Outside Sales Representative –Sales Representative –Account Manager –Sales Engineer –Field Application Engineer
41
Manufacturer Sales Representative (Factory Rep): Skills required
–Product knowledge –Market knowledge –Negotiation skills –Teaching skills –Understanding of relationships and partnerships *Position Development
42
The Manufacturer’s Agent
*Similar responsibilities, customer base, duties, and required skills as Manufacture Sales Representative previously discussed (may even refer to themselves as ‘Manufacturer Rep’). * Usually represents multiple companies each of which whose sales in a given territory do not support a full salaried employee * May call on distributors, end users, specifiers, and manufacturers * Usually complimentary products * Do not stock inventory; typically
43
Factory-Owned Distributorship
*Started because of lack of other channels *Best to get representation required *To be full service, must sell other manufacturer’s products *The case of GESCO
44
Non-factory Owned Distributor
*Full service with all functions of a distributor *More independent than manufacturer –Better tailoring of product mix –Even if exclusive –Can give good representation to new products/mfgs
45
Third party logistics (3PLs)
*Transportation –Long haul –Short deliveries –“Hot shots” *Warehousing –Receiving, storing, picking, and packing *Providing information such as tracking and PODs Is a Complete logistic function Above, plus deciding level and location of inventory Global Shipping Customs Ports Carriers
46
Selling price
= list price - trade discounts
47
Net price
= selling price - allowable discounts (cash discounts)
48
Net Sale
Actual money received after discounts and adjusments
49
Cost of Goods Sold (COGS)
= Cost of Merchandise + Freight from Manufacturer
50
list price
price of an article as shown in a list issued by the manufacturer or by the general body

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