Marketing Notes – Logistics Management and Marketing

Logistics Management

• Design & management of a system that controls the flow of materials into, through, and out of the organization
• Covers entire range of operations concerned with product movement, including relationships with suppliers and customers – hence marketing
• Also called Supply Chain Management
• Goal: Efficient use of resources in achieving the supply chain’s customer service goals

Systems Approach

• Explicitly recognize & coordinate linkages among traditionally separate logistics functions
• Recognizes interaction with outside organizations and individuals
• Creates mutual purpose for all partners in performance, quality, & timing

Strategic Tools

• JIT – Just-in-time delivery for lower inventory cost
• EDI – Electronic data interchange for more efficient order processing
• ESI – Early supplier involvement for better planning of product movement

Logistics Effort

• Materials Management
  • Controls movement through production processes
• Physical Distribution Management
  • Inflow of products from suppliers
  • Outflow of finished goods to customers
• Goal: Effective coordination for maximum cost-effectiveness while maintaining service goals & requirements

Five Decision Areas for Logistics Management

1. Production
2. Transportation
3. Facilities
4. Inventory
5. Communications

Logistics and the Environment

• Changes to its strategic orientation
• Systematically account for environmental laws, expectations & self-imposed goals
• Reverse distribution systems retrieval for subsequent use, recycling, or disposal

Example Laws

• Germany: regulates packaging
• U.S: taxes on certain chemicals destined for toxic-waste dumps
• Denmark: refillable bottles for drinks
• Canada: deposits on beer bottles

Necessary & appropriate response to environmental concerns?
  or
Partially motivated by protectionist reasons?

Other Environmental Issues

• Retrieval of long-term capital goods
• Transportation
• Packaging
• Firm-specific performance and the environmental burden

Customer Service and Satisfaction

• Service-sector decisions
• Sustainable competitive advantage
• Service levels
• Customer complaints
• Customer satisfaction
• Organizing for customer service