978-1259709074 Chapter 16 Part 2

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Chapter 16 – Supply Chain and Channel Management Marketing 6th

McGraw-Hill Education.

Connect Activities

Activity

Type

Learning Objectives 16–

New Balance: Managing Supplies for U.S. and

Overseas

Video Case

Supply Chain Management

Video Case

Making Information Flow and Making Merchandise

Flow

Click & Drag

Walmart: Pioneer in Supply Chain Management

Case Analysis

Understanding the Distribution Center

Click & Drag

Fast Fashion: Efficient Supply Chain Management at

Zara

Case Analysis

Supply Chain: Icebreaker

Video Case

Supply Chain: How Domino’s Gets Its Pizza to Plate

Video Case

ISeeIt Video Case: Supply Chain

Video Case

New Balance: Managing Supplies for U.S. and Overseas

▪ Activity Type: Video Case

▪ Learning Objectives: 16-01, 16-03, 16-04

▪ Difficulty: Medium

▪ Activity Summary: The video case discusses the challenges of managing a global supply chain, as

conducted by New Balance. After the video ends, students are asked questions about the video and

related course concepts.

Activity

▪ Introduction: Most consumers recognize the New Balance brand as one associated with quality

athletic shoes and apparel. What consumers don’t know is that behind the scenes, New Balance is

able to provide excellent product and customer service because of its commitment to creating an

organized and efficient supply chain.

▪ Concept Review: Every marketing decision is affected by the supply chain. When products are

designed and manufactured, how and when the critical components reach the factory must be

coordinated with production. The sales department must coordinate its delivery promises with the

factory or distribution centers. Five interrelated processes emerge in supply chain management:

making information flow, making merchandise flow, managing inventory, designing the supply chain,

and managing the relationships among supply chain partners.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Chapter 16 – Supply Chain and Channel Management Marketing 6th

McGraw-Hill Education.

Follow-Up Activities

For a fascinating look at a global supply chain, show “Planet Money Makes a T–Shirt” in class and then

discuss it (you could also assign it to be watched outside class and ask students to write about it).

http://apps.npr.org/tshirt/#/title

This is a five-part video, but the videos are very short, with a total length of less than 15 minutes. They

follow the supply chain for a t-shirt from the start (growing the cotton) to the end (boxing them up and

sending them to consumers who ordered them). This includes short looks at garment factories in

Bangladesh and Colombia, where the shirts were sewn.

If you are interested in more details, you can listen to the original podcasts, which go beyond supply chain

basics to address questions of global outsourcing:

http://www.npr.org/series/248799434/planet-moneys-t-shirt-project

Supply Chain Management

▪ Activity Type: Video Case

▪ Learning Objectives: 16-01, 16-02, 16-04

▪ Difficulty: Medium

▪ Activity Summary: In this simulated meeting, a retailer and one of her suppliers discuss a problem

that has arisen with a large order. After the video ends, students are asked questions about the video

and related course concepts.

Activity

▪ Introduction: Beth Armstrong owns a sporting goods store for kids in a Northeastern town. When a

500-unit order Beth places online goes awry, she meets with a senior account representative, Bill

Schule, to resolve the issues. The interaction raises a wide range of issues pertaining to the retailer,

the supplier, and the consumer.

▪ Concept Review: Supply chain management refers to a set of approaches and techniques firms

employ to: (1) efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores,

and transportation intermediaries into a seamless value chain in which merchandise is produced and

distributed in the right quantities, to the right locations, and at the right time; and (2) minimize system–

wide costs while satisfying the service levels their customers require. Inefficiency in the supply chain

can lead to a variety of problems, including delayed shipments, higher prices, and dissatisfied

customers.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Follow-Up Activities

This video offers an opportunity to integrate current and past course material. Ask students to watch the

video again from the perspective of the three service recovery strategies: listen to the customer, find a fair

Chapter 16 – Supply Chain and Channel Management Marketing 6th

McGraw-Hill Education.

a result he is able to manage the retailer’s emotional state and work with her to solve her immediate

problem.

Making Information Flow and Making Merchandise Flow

▪ Activity Type: Click & Drag

▪ Learning Objectives: 16–04

▪ Difficulty: Medium

▪ Activity Summary: Students are asked to identify different types of information flows in the supply

chain.

Activity

▪ Introduction: When a customer decides to purchase a Sony DVD player at her local Best Buy store,

it triggers action throughout the entire supply chain. It is possible that by the time she leaves the

parking lot, the manufacturer has already ordered another player to be built, and this occurs with the

tens of thousands of these players being sold every day around the world. Read about this purchase,

and then assemble the information flow model as instructed.

▪ Concept Review: Supply chain management refers to a set of approaches and techniques firms

employ to: (1) efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores,

and transportation intermediaries into a seamless value chain in which merchandise is produced and

distributed in the right quantities, to the right locations, and at the right time; and (2) minimize system–

wide cost while satisfying the service levels their customers require. Five interrelated activities

emerge in supply chain management: making information flow, making merchandise flow, managing

inventory, designing the supply chain, and managing the relationships among supply chain partners.

Walmart: Pioneer in Supply Chain Management

▪ Activity Type: Case Analysis

▪ Learning Objectives: 16-01, 16-03, 16-04

▪ Difficulty: Hard

▪ Activity Summary: Discusses how Walmart manages its supply chain. Students are asked questions

relating chapter concepts to the case.

Activity

▪ Introduction: Walmart dominates the retailing industry in terms of its sales revenues, its tremendous

customer base, and its ability to drive down costs and deliver value to customers. Walmart takes

pride in having received numerous accolades for its ability to continuously improve efficiency in the

supply chain while meeting its corporate mandate of offering customers everyday low prices. Review

the following case and answer the corresponding questions regarding Walmart’s supply chain

strategy.

Chapter 16 – Supply Chain and Channel Management Marketing 6th

McGraw-Hill Education.

▪ Concept Review: Supply chain management refers to a set of approaches and techniques firms use

to streamline the flow of merchandise. Firms with a supply chain management focus strive to

efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and

transportation intermediaries into a seamless value chain in which merchandise is produced and

distributed in the right quantities, to the right locations, and at the right time. Supply chain

management also focuses on minimizing system-wide costs while satisfying the service levels

customers require.

Follow-Up Activity

Assign the following article: http://time.com/money/4182681/walmarts-express-stores-close/

The article explains that Walmart has given up on its “Express Stores” format, which was a smaller store

along the lines of a convenience store.

Discussion question or writing prompt: The article notes that Walmart’s supply chain is optimized for the

superstore format. What supply chain changes would be needed to support smaller stores?

Understand the Distribution Center

▪ Activity Type: Click & Drag

▪ Learning Objectives: 16–03

▪ Difficulty: Medium

▪ Activity Summary: The student is asked to match distribution center activities to the four major

distribution center functions.

Activity

▪ Introduction: Supply chain management allows firms to recognize and solve distribution problems

that many firms face today. Many retailers use distribution centers to streamline merchandise flow.

The distribution center acts as the mediator between the supplier and the store location, preparing the

merchandise to be floor-ready. There are several activities the distribution center performs. The

following exercise examines the different distribution center activities.

▪ Concept Review: Distribution centers are often more advantageous for retailers because of multiple

factors. Distribution centers enable the retailer to carry less merchandise in the individual stores. This

in turn lowers inventory investments system-wide for retailers. The distribution center performs the

following activities: coordinating inbound transportation; receiving, checking, storing, and cross–

docking; getting merchandise floor-ready; and coordinating outbound transportation.

Follow-Up Activity

Discuss: Distribution centers are discussed in the chapter primarily from the perspective of a center that

provides merchandise to retailers. How would the distribution center for a company like Amazon.com—

that ships products to consumers—differ from one designed to ship merchandise to retailers?

Some possible answers:

▪ Cross-docking will occur less often, since often the cartons that arrive at the distribution center will

contain multiple quantities of an item.

Chapter 16 – Supply Chain and Channel Management Marketing 6th

McGraw-Hill Education.

▪ There is no need to get merchandise floor-ready.

▪ There are likely to be more, smaller shipments.

▪ Distribution centers for consumer goods are more likely to handle outbound shipping via shipping

companies (UPS, FedEx, USPS) and less likely to use a company’s own fleet of trucks. Although

Amazon is experimenting with its own delivery trucks for the “last mile” part of delivery:

http://online.wsj.com/news/articles/SB10001424052702304788404579521522792859890

Fast Fashion: Efficient Supply Chain Management at Zara

▪ Activity Type: Case Analysis

▪ Learning Objectives: 16-03, 16-04

▪ Difficulty: Hard

▪ Activity Summary: This case describes Zara’s “fast fashion” supply chain. Students answer

questions relating chapter concepts to the case.

Activity

▪ Introduction: In the fast fashion retail business strategy, supply chain management processes serve

to introduce fashionable merchandise rapidly, such that stores can respond immediately to customer

demand for merchandise. This was pioneered by Zara, a global specialty apparel chain located in La

Coruna, Spain. The approach is particularly effective for specialty apparel retailers that target fashion–

conscious consumers who simply must have the latest looks—but want to do so on a very limited

budget. These shoppers load up on new fast fashions every few weeks, instead of purchasing a few

higher-priced basics every few months. This creates unique challenges for a firm’s supply chain

management.

▪ Concept Review: Supply chain management refers to a set of approaches and techniques firms

employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and

transportation intermediaries into a seamless operation in which merchandise is produced and

distributed in the right quantities, to the right locations, and at the right time. Another goal is to

minimize system-wide costs while satisfying the service levels customers require. Supply chain

management adds value for customers because it gets the products to them efficiently, quickly, and

at low cost.

Follow-Up Activity

For the “dark side” of the Zara supply chain, these articles shed some light on concerns about the impact

of “fast fashion” on garment workers and the environment. This is related to the “Planet Money T–Shirt”

video recommended as a follow-up to the New Balance video case.

http://www.sustainablebrands.com/news_and_views/stakeholder_trends_insights/jennifer_elks/ethical_fa

st_fashion_hm_trying_prove_its_no

http://www.ethicalfashionforum.com/the-issues/fast-fashion-cheap-fashion

In addition, a 2015 film called The True Cost addresses issues related waste and exploitation in fast

fashion. Its approach is simplistic, so don’t expect any startling insights or creative solutions, but for

Chapter 16 – Supply Chain and Channel Management Marketing 6th

McGraw-Hill Education.

someone who hasn’t thought about these issues—and some students probably haven’t—it might be of

value. For more about the film, visit truecostmovie.com.

Supply Chain: Icebreaker

▪ Activity Type: Video Case

▪ Learning Objectives: 16-02, 16-03

▪ Difficulty: Medium

▪ Activity Summary: This case explains supply chain management for Icebreaker, a New Zealand

clothing company. After the video ends, students are asked questions about the video and related

course concepts.

Activity

▪ Introduction: In 1994, Jeremy Moon founded Icebreaker, a New Zealand–based company that

makes high-tech clothing from merino wool and other natural sources. Icebreaker is now a global

enterprise with manufacturing plants, distribution centers, and retail outlets on four continents. Getting

the right product to the right place at the right time requires successful marketing channel

management. Watch the following video to discover the variety of approaches and techniques

Icebreaker uses to efficiently and effectively manage the company’s supply chain.

▪ Concept Review: Marketing channel management refers to a set of approaches and techniques

firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses,

stores, and transportation intermediaries into a seamless operation. The goal of marketing channel

management is that merchandise is produced and distributed in the right quantities, to the right

locations, and at the right time while minimizing costs. There is no one best channel structure.

Channels can be direct, indirect, or some combination thereof. The majority of firms today use vertical

marketing systems (VMS) to manage their channels. In a VMS, channel members act as a unified

system. There are three types of vertical marketing systems: contractual, administered, and

corporate. More often than not, channel members also establish long-term strategic partnerships.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

Supply Chain: How Domino’s Gets Pizza to Plate

▪ Activity Type: Video Case

▪ Learning Objectives: 16-02, 16-03, 16-04

▪ Difficulty: Medium

▪ Activity Summary: The video explains the hub-and-spokes approach Domino’s uses to manage

delivery of ingredients to its retail outlets. After the video, students are asked questions applying

chapter concepts to the case material.

Chapter 16 – Supply Chain and Channel Management Marketing 6th

McGraw-Hill Education.

Activity

▪ Introduction: Domino’s needs an efficient supply chain in order to profitably serve pizza to its large

customer base. This video explains various aspects of the company’s supply chain operations and

relationships. This activity is important because marketers must be able to design and manage

efficient and effective supply chains. Problems in a supply chain can lead to reduced profits and lost

customers. The goal of this exercise is to check your understanding of key supply chain concepts by

applying them to Domino’s.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.

ISeeIt Video Case: Supply Chain

▪ Activity Type: Video Case

▪ Learning Objectives: 16-01, 16-02, 16-04

▪ Difficulty: Medium

▪ Activity Summary: This video case looks at supply chain issues for a bottled water company.

Activity

▪ Introduction: Marketing channels involve a series of intermediary organizations or individuals who

help move products and services from the manufacturer to the end user. Supply chain management

represents the management of diverse intermediaries and channels including middlemen, brokers,

wholesalers, retailers, distributors, and dealers—all of which add value, and cost, to the final

consumed product. Take for instance Hope Springs and the supply chain it uses to get its bottled

water from one of the company’s three manufacturing facilities into the hands of thirsty

customers. Hope Springs knows that while distribution may add cost to the final product, it also adds

significant value because of the complexity behind effectively managing this process. From delivery to

warehousing and restocking to inventory, Hope Springs knows it needs to focus on the core of its

business and let distributors take care of the logistics, facilitation, and transactional aspects of getting

bottled water to customers.

▪ Video: The video is presented to the student below the introductory information. The video plays

embedded on the page, after which questions are presented.