What are the 4 benefits of a bill of distribution (BOD)?
- 1. Provides planners with visibility to supply/demand relationships in the dist channel.
- 2. Clearly establishes the r'ship btw stockrooms at different levels eg. 2A, 2Y, 3A etc
- 3. Redefines the resupply path per sku per stockroom
- 4. Allows DRP to replenish stock in all stockrooms
How do channels of distribution differ?
- Differs in terms of market exposure (distribution density) a manufacturer needs in order to meet sales objectives.
- Complex - max distribution points to attain exposure to customers
- Selective - exclusive product distribution
- Exclusive - even more selective
- Internal/Direct - ETO
Name 3 types of channel dependency and examples.
- 1. Single transaction - short lived. Eg. tractor, motorbike.
- 2. Conventional - No lasting commitment. Eg. Clothes, CDs.
- 3. Networked Supply - commitment to SC efficiency. Eg. Newpaper, bread, milk
Influences on Network Configuration.
- 1. Customer service objectives - LT/availability
- 2. Distribution Intensity - product exposure
- 3. Channel dependency
- 4. Transaction complexity
- 5. Logistics strategy - FTL, LTL
Safety Stock increases as the number of DCs increases. Why?
- Demand is more volatile at extremities of a network so forecasts are less accurate.
- To maintain a high service level, safety stock needs to be higher.