Premium Essay

Direct Sales to Multichannel Supply Chain

In: Business and Management

Submitted By btramontina
Words 2853
Pages 12
Research Paper: Direct Sales to Multichannel Supply Chain
Activity 7.4
By
Brian K. Tramontina
Submitted to
Dr. Xavier Bruce
In Partial Fulfillment of the Course Requirements for
LGMT 682 Integrated Logistics

Embry-Riddle Aeronautical University
College of Business - Worldwide

May Term 2015 July 17th, 2015

Table of Contents I. Introduction…………………………… Page 3 II. Early Beginnings……………………….. Page 3 III. Common Ground………………………. Page 4 IV. Rabbit Ears to Multi-Channels………… Page 5 V. Benefits………………………………… Page 5 VI. Drawbacks…..…………………………. Page 6 VII. Effects on the Supply Chain…………… Page 7 a. Distribution Centers……………. Page 7 b. Inventory………………………. Page 8 c. Demand Forecasting…………… Page 9 VIII. Customer Interaction…………………… Page 10 IX. Conclusion…………………………………. Page 11 X. References………………………………… Page 12

Introduction
Many of the larger current retail stores in the outdoor goods industry got their start by practicing direct sales – that is they sold door-to-door and person-to-person. Sometimes they placed advertisements in newspapers and when they got a response or an “order”, they would pack it up and mail it out from their own house. Logistics probably was not a very important topic in the minds of those entrepreneurs back then and the supply chain was simply whatever they had that they could sell. The more they sold, the more successful they became and the more they had a need for larger facilities, more and a larger variety of stock and finally, they had to learn how to manage their supply chain.
Early Beginnings
Cabela’s is one of the leaders in the hunting, fishing, and outdoor gear industry and it dates back to the early 1960’s in Chappell, Nebraska where Dick Cabela and his wife started selling handmade flies out of their kitchen (Reference for…...

Similar Documents

Premium Essay

Case Study

...DELL SUPPLY CHAIN Green: Typical working of Dell's supply chain The role of SCM is becoming more and more important in today's business wold. SCM is today considrered as a source of competence and innovation. Supply chain management has the objective to have the right products in the right quantities at the right time at minimal cost Dell SC have moved to a more integrated and strategic approach. The key element of his successful business model of the company is its supply chain management. The core elements of Dell’s business model are its direct sales model, usually referred as “direct model”, and the build-to-order strategy. From its very first steps, the direct sales model was adopted: At the beginning computers were sold over the phone and they were built according to the customers specifications. After a short break of using the retail channel from 1990 to 1994, Dell returned to its direct model and grew rapidly. The direct model refers to the fact that Dell does not use the retails channel,wholesaler or distributor but sells its PCs directly to customers through its website. Dell’s Direct Distribution Channel This way it creates a direct relationship with each individual customer.This direct relationship “creates valuable information” about the customer, thus Dell knows who the end users are, what they have bought from Dell and what their preferences are. This “provides Dell with a wealth of marketing and product development......

Words: 499 - Pages: 2

Premium Essay

Marketing and Distribution

...There will also be a team of sales people who will be going round retailer shops for women clothes and marketing these clothes to them. This will help in acquiring new customers apart from the existing ones. The sales people will also be visiting individuals for example, in workplaces and marketing the product to them. This will help end user to access the product without physically coming to the shop. The end users will also have the clothes delivered to them upon order. Overview of distribution channels Distribution channels empowers a firm to market its items and deliver them to the client in diverse ways. Picking the right circulation channel gives a firm favorable element and a chance to extend its business at a rate that is quicker than natural development. A direct channel of dissemination depicts a circumstance in which the producer offers an item straightforwardly to a customer without the assistance of intermediaries (Rolnicki, 1998). A direct chain of circulation may include face to face deals, computer deals or mail request however does not include any type of distributor other than the producer. Chains of dissemination that include nonaffiliated retailers or wholesalers cannot be portrayed as immediate channels of appropriation and are rather classified as backhanded chains of conveyance. One way of distributing directly is to open a retail outlet. As opposed to utilizing sales reps to get into autonomous retailers or chain stores, one opens their......

Words: 1823 - Pages: 8

Premium Essay

Retail Industry

...automation are the “point of service,” “supply chain management,” and “multichannel integration” priority solution scenarios. These scenarios, or strategic areas of focus, are examined in more detail on the following pages. For more information, please visit www.microsoft.com/biztalk SCENARIO: SUPPLY CHAIN MANAGEMENT Overview The majority of retail systems (67 percent) are home-grown legacy systems that are not equipped to enable efficient collaboration with business partners. Increasingly, retailers with a closely connected supply chain (such as Wal-Mart) have a strategic competitive advantage against those that don’t. Supply chain management solutions from Microsoft deliver an integrated approach to merchandise management that allows retailers to deploy state-of-the-art technologies at a low total cost of ownership (TCO) to meet the increasingly demanding business needs of merchandise management and demand planning (using standards like UCCnet Global Data Synchronization and EDI/AS2). Benefits “BizTalk Server is definitely a technology that will provide a lot of value as we integrate more functionality into the system.” —Ole Andersen, Manager, Strategic Innovation, London Drugs Effective, demand-driven replenishment; integration with legacy environments; full integration for multiple channels; agility to implement and integrate emerging technologies like RFID and GDS/UCCnet Case Study London Drugs, a leading Canadian retail chain serving customers across......

Words: 1899 - Pages: 8

Premium Essay

Unit 29 P2

...delivering goods, the types of transport is going to be Rail, Road, Air, Water for example rivers, ocean cargo and canals and People. Storing is about where the goods are going to come from and where they are going to be stored. Selling is going to be where you are going to sell the goods Distribution Channel Distribution channel is the chain of individuals and organisations involved in getting a product or service from the producer to the consumer. Distribution channels are also known as marketing channels or marketing distribution channels in this context, the individuals and organizations are known as intermediaries; channels are categorised according to the number of intermediaries between the producer and the end user. A direct marketing channel, for example, which has no intermediaries between the producer and the consumer, is known as a level zero channels. http://searchitchannel.techtarget.com/definition/distribution-channel Distribution Process Supply Chain A supply chain is the path leading from the raw materials a company uses, through manufacturing, distribution and selling until they reach the customer. So for a hotel, a supply chain would be the stages that you the organisation go through to deliver catering or other amenities to the guests, for example Advantages: The benefit of channel 1 is that it has two intermediary levels in it which are wholesalers and retailers. The products that are manufactured or produced are sold to wholesalers in large......

Words: 1414 - Pages: 6

Premium Essay

Marketing Channels

...it partly or wholly owns. ADMINISTERED VMS: An administered VMS coordinates successive stages of production and distribution through the size and power of one of the members. The most advanced supply-distributor arrangement for administered VMSs involve distribution programming, which can be defined as building a planed, professionally managed, vertical marketing system that meets the needs of both the manufacture and distributors. The manufacturer establishes a department within the company called distributor-relations planning. Its job is to identify distributor needs and build up merchandising programs to help each distributor operate as efficiently as possible. Kraft and Procter are two companies with excellent distributor-relations planning. CONTRACTUAL VMS: A contractual VMS consists of independent firms at different levels of production and distribution integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone. Contractual VMS now constitute one of the most significant developments in the economy. They are of three types: Wholesaler-sponsored voluntary chains: Wholesalers organize voluntary chains of independent retailers to help them compete with large chain organizations. Retailer cooperatives: Retailers take the initiative and organize a new business entity to carry on wholesaling and possibly some production. Franchise organizations: ......

Words: 2012 - Pages: 9

Premium Essay

Supply Chain Dell

...1. Examine and analysis Dell’s Direct Model and its basic working and success and future challenges. Dell’s Direct Model Dell has been following it’s unique direct build-to-order sales model for more than 20 years. Customers can plan their own configuration and place orders directly with company via the phone or a web site. Over the years Dell supply chain efficiencies and direct sales gave it a competitive advantage. Dell has also leveraged JIT principle to make its manufacturing process success. Dell’s approach to JIT is different in that they leverage their suppliers to achieve the JIT goal. They are also unique in that Dell is able to provide exceptionally short lead times to their customers by forcing their suppliers to carry inventory instead of carrying it themselves and then demanding (and receiving) short lead time on components so that products can be simply assembled by Dell quickly and then shipped to the customers. Characteristics of direct model * Eliminate costs and risks of carrying large finished goods inventories * High velocity * Low-cost distribution * Direct customer relationship * Build-to-order * Just-in-time manufacturing * Products and Services aimed at specific market segments * Reduced channel costs: from 13.5%-15.5% to 2% of product revenue * Latest Technology was introduced faster than indirect channels * Dell can use IT to directly control its value chain, set quality measures and monitor in...

Words: 1626 - Pages: 7

Premium Essay

Principles of Marketing

... Abstract This paper gives an overview of distribution channels; Channel Levels such as: Direct vs. Indirect Channel Organizations such as Conventional Vertical, Horizontal and Multichannel Marketing Systems. It also, explains my target market needs at the here is also a brief description of how many channel members the company needs and why they need them. Overview of Distribution Channels The success of any business depends upon channel levels for getting products to market. First there is a direct channel and second there is an in-direct channel, both needs to exist for this to happen. The majority of companies can maintain their own using wholesalers and dealers. Which is a three channel system any more than three moves the company to in-direct marketers. This small Mexican food restaurant only requires the three channel system to operate with a positive cash flow. The distribution channels are for larger scale restaurants that distribute a Large amount of product. Products or services that are sold directly to the customers are direct channels which eliminate the middle man so to speak because there are no other companies that cut into the profit margin. When the business does not sell products directly to the consumer this is referred to as an in-direct channel. These methods of distribution have improved over the years due to technology and computers. Analyze Target......

Words: 641 - Pages: 3

Premium Essay

Control Tower

...OMNICHANNEL SUPPLY CHAIN UK RETAILER JOHN LEWIS Case study based on CSCMP’s Supply Chain Quarterly Quarter 2, 2104 And Drapersonline.com October 2013 To maintain its lead in omnichannel retailing, UK retailer John Lewis has adopted a very modern strategy: converting to "hybrid" DCs that fill orders for both retail stores and online sales. London-based retailer The John Lewis Partnership fared exceptionally well during last year's Christmas selling season. For the five weeks leading up to Christmas its total sales, in stores and online, amounted to £734 million—a 7.2-percent increase from the same period the previous year. Although in   1   store sales rose only slightly, online sales jumped by 22.6 percent compared to the same period the year before. As the December sales results show, John Lewis has been very successful with its omnichannel strategy. To maintain its leadership in omnichannel retailing—which allows consumers to buy, take delivery, and make returns when and where they choose—the company has been redesigning its supply chain. As part of that initiative, John Lewis has begun restructuring its distribution center (DC) network to support a shift to an in-store replenishment strategy that will require major changes in the way it picks, delivers, and stores the products it sells. Customer interactions According to Head of supply chain development Berangere Michel, omnichannel is about allowing customers to interact with them anyway they choose at......

Words: 3138 - Pages: 13

Premium Essay

Retail

...| Issue 6 Omni-Channel Supply Chain: From Backend to Forefront Foreword Pratik Pal President & Global Head Retail, CPG, Travel, Transportation & Hospitality Welcome to the sixth edition of Forum, the TCS Retail Thought Leadership journal. In this issue, we present our perspective on the changes shaping the supply chain of tomorrow. Retailers all over the world are making the transition from multichannel to omni-channel. The key to delivering the ‘order anywhere, fulfill anywhere’ promise is the supply chain. Supply chain is poised to become the key influencer of the interconnected customer experience. Based on my interactions with leading retailers across the world, it is my view that the battle for omni-channel supremacy will be fought and won on the grounds of supply chain. Retailers across the world are focused on re-architecting and recalibrating their supply chains while maintaining the delicate balance between customer experience and profitability. While earlier, significant investments were directed toward digital customer engagement, in the times ahead, investments will predominantly focus on supply chain re-imagination. In this edition, we discuss the prominent challenges and the response needed across key areas spanning the entire value chain as well as the building blocks for enabling omni-channel supply chain. The ‘plan-buy-make–move–sell’ value chain is no more linear. While the ’sell’ component of the value chain can now be executed by......

Words: 7645 - Pages: 31

Premium Essay

Marketing

...Individual Project MKTG 205 – Principles of Marketing 11/26/2012 Abstract Throughout this paper terms like indirect and direct distribution channel levels will be discussed and defined as well as horizontal, vertical, multichannel, and conventional marketing systems. Then the market needs to market One-A-Day multivitamin will be broken down to help understand what needs to take place to sell this product. In the end the type of channel used and an explanation will follow to show how and why this route was chosen. One-A-Day Multivitamins Introduction Deciding on how to market a product is much harder than one thinks. Normally people think it is easy and all there is to it is to just advertise the product and make sales. There is way more to it than just that and most of which will be discussed throughout this paper. Hopefully after reading this someone can understand more about what it takes to actually market a product and have success in doing so. Overview of Distribution Channels There are two main types of channel levels of distribution and they are direct and indirect. Direct distribution is when products are being sold straight to consumers and eliminate the middle man. (Spencer and Schendel, 1964) One of the great advantages of this is that it cuts out any extra charges that may apply when intermediaries are used. Also, with direct distribution one is able to stay in contact directly with the consumer and build relationships. There is also a......

Words: 1198 - Pages: 5

Premium Essay

Mkt250

...American Intercontinental University Unit 3 Individual Project MKTG 205 – Principles of Marketing 09/14/2015 Abstract This paper highlights on the distribution and techniques of children’s clothes. This paper will highlight and give examples to show the distribution of the product in order to be placed in the customer’s hands. Children clothes are a great want and with excellent distribution techniques. The product can reach the consumer with no problems. Children’s Clothing Introduction In the field of children’s clothing, knowing your product is essential for productive sales. In having a wide variety of items, designers, clothing, and choices in a retail store guarantees the customer of the distributor's ability to help. By obtaining information about other marketer’s helps in answering questions, by giving guides to the customer in the right direction of which clothing to buy for their children. There are requirements in order to get to know what the customers are looking for when shopping for kids clothing. Buyers can come in numerous forms of buying profiles, for example, pay level, age, ethnicity, training, social status, geographic area and other life situations. In order to know what an ordinary buyer likes or would want for their children, would take some time and energy to inquire what the average buyer is like, what they purchase, the type of clothing they deem purchasable for children and the geographic area in which they live. For......

Words: 805 - Pages: 4

Premium Essay

Marketing 319 Syllabus - Devry University

...Marketing | Course Project—Draft Marketing Plan Graded Discussion Topics Quiz | Week 5 TCOs 2, 3, 5, 6, 7 Satisfying Marketing Opportunities: Pricing | Chapter 13: Building the Price Foundation Chapter 14: Arriving at the Final PriceAppendix B Financial Aspects of Marketing | Course Project—Price Strategy/Breakeven Analysis Graded Discussion Topics | Week 6 TCOs 1, 2, 4, 6 Satisfying Marketing Opportunities: Integrated Communications | Chapter 17: Integrated Marketing Communications and Direct Marketing Chapter 18: Advertising, Sales Promotion, and Public Relations Chapter 19: Using Social Media to Connect with Consumers Chapter 20: Personal Selling and Sales Management | Graded Discussion Topics | Week 7 TCOs 1, 2, 3, 4, 8 Satisfying Marketing Opportunities: Place | Chapter 15: Managing Marketing Channels and Supply Chains Chapter 16: Retailing and Wholesaling Chapter 21: Implementing Interactive and Multichannel Marketing Chapter 22: Pulling It All Together: The Strategic Marketing Process | Course Project—Final Marketing Plan Graded Discussion Topics | Week 8 All TCOs | Final Exam |...

Words: 312 - Pages: 2

Premium Essay

Marketing Channels

...Ch10 Marketing Channels Supply Chinas and the Value Delivery Network Upstream: Supply raw materials, components, parts, information, finances, and expertise Downstream: Marketing channels towards customers, including wholesales and retailers, * Supply chain: make-and-sell view, which suggest productive inputs as starting point * Demand chain: Sense-and-respond view But sometimes it takes a step-by-step, linear view of purchase-production-consumption activities Value Delivery network: A network composed of company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system in delivering customer value The Nature and Importance of Marketing Channels Marketing Channel (Distribution channel): A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user * Affect every other marketing decision * Use imaginative distribution systems * Involve long-term commitment to other firms How Channel Members Add Value * Give up some control over how and to whom to sell products * But they create greater efficiency in making goods available to target markets by better contacts, experience, specialization and scale of operation * Intermediaries reduce the amount of work by both producers and consumers * Transform assortments of products made by producers...

Words: 1295 - Pages: 6

Premium Essay

Marketing

...Marketing Channels and Supply Chain Management Chapter Objectives •  Explain why companies use distribution channels and discuss the functions these channels perform. •  Discuss how channel members interact and how they organize to perform the work of the channel. •  Identify the major channel alternatives open to a company. •  Explain how companies select, motivate, and evaluate channel members. •  Discuss the nature and importance of marketing logistics and integrated supply chain management. Chapter Overview This chapter covers the important topics of supply chain management. Supply chains consist of both upstream and downstream partners, including suppliers, intermediaries, and even intermediary customers. The term value delivery network expands on the limited nature of "supply chain." It consists of the company, suppliers, distributors, and ultimately customers who "partner" with each other to improve the performance of the entire system. The chapter focuses on marketing channels--the downstream side of the value delivery network. A company's channel decisions directly affect every other marketing decision. And because distribution channel decisions often involve long-term commitments to other firms, management must define its channels carefully, with an eye on tomorrow's likely selling environment as well as today's. Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would......

Words: 6245 - Pages: 25

Premium Essay

Marketing Approach

...Marketing Channels and Supply Chain Management Chapter Objectives •  Explain why companies use distribution channels and discuss the functions these channels perform. •  Discuss how channel members interact and how they organize to perform the work of the channel. •  Identify the major channel alternatives open to a company. •  Explain how companies select, motivate, and evaluate channel members. •  Discuss the nature and importance of marketing logistics and integrated supply chain management. Chapter Overview This chapter covers the important topics of supply chain management. Supply chains consist of both upstream and downstream partners, including suppliers, intermediaries, and even intermediary customers. The term value delivery network expands on the limited nature of "supply chain." It consists of the company, suppliers, distributors, and ultimately customers who "partner" with each other to improve the performance of the entire system. The chapter focuses on marketing channels--the downstream side of the value delivery network. A company's channel decisions directly affect every other marketing decision. And because distribution channel decisions often involve long-term commitments to other firms, management must define its channels carefully, with an eye on tomorrow's likely selling environment as well as today's. Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would......

Words: 6246 - Pages: 25