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Unique Strategies for Supply Chain Channel Mixes

Unique Strategies for Supply Chain Channel Mixes. Tract Topic 3: Channel Structure and Strategies Peter Crosby, Principal, CGR Management Consultants John D. Harpst, Director of Materials, OASIS CORPORATION Mark Smith, Vice President Operations, NATURE’S BEST

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Unique Strategies for Supply Chain Channel Mixes

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  1. Unique Strategies for Supply Chain Channel Mixes Tract Topic 3: Channel Structure and Strategies Peter Crosby, Principal, CGR Management Consultants John D. Harpst, Director of Materials, OASIS CORPORATION Mark Smith, Vice President Operations, NATURE’S BEST Tuesday, Oct 19, 1:30PM to 3:00PM (03E) Wednesday, Oct 20, 11:00AM to 12:30PM (03H) CGR/Oasis/Nature's Best

  2. Session Agenda • Introductions and Overview: Pete Crosby, Panel Moderator (0:00-0:15) • Oasis Corporation: John Harpst (0:15-0:35) • Nature’s Best: Mark Smith (0:35-0:55) • Open discussion with session attendees and participants (0:55-1:10) • Question and Answer session (1:10-1:30) • Adjourn to next session (1:30) CGR/Oasis/Nature's Best

  3. Overview • Unique channel mix challenges • E-commerce integration with customers, suppliers, and intermedieries • Competitive challenges • Explanation of E-commerce solution strategies CGR/Oasis/Nature's Best

  4. Goal: Speed and cost to market CGR/Oasis/Nature's Best

  5. Examples of Successful EC Strategies • Wal-Mart’s use of EDI/cross docks • McKesson’s use of pharmacy SOPS devices • AHS use of hospital stores SOPS devices • Toyota JIT inbound logistics with suppliers • Ford’s accounts payable paperless match • P&G’s Every Day Low Prices (EDLP) • Dell’s C2B mail order PCs • GE/GEISCO OEM&MRO parts reverse auctions CGR/Oasis/Nature's Best

  6. Benefits of Successful SC Integration • Inventories reduced 50% • 20% reduction in supply chain costs as a percentage of total revenues • 40% increase in on-time deliveries • Cumulative cycle time reduction of 27% • 17% increase in revenues • Out-of-stock incidents down 9 times • 50% reduction in FG inventory by postponing packaging/labeling until orders received Source: MIT Center for Logistics Survey of 50 successful Supply Chain Re-engineering projects CGR/Oasis/Nature's Best

  7. Unique Strategies for Supply Chain Channel Mixes John D. Harpst Director of Materials OASIS CORPORATION 265 North Hamilton Road Columbus, Ohio 43213-0150 JHARPST@infinet.com CGR/Oasis/Nature's Best

  8. OASIS - Company Overview • World Leader in Production and Distribution of Water Dispensers to two distinct channels • drinking fountains to construction companies • bottled water coolers to bottled water companies • Worldwide production and distribution facilities serving “unique channel mixes” CGR/Oasis/Nature's Best

  9. Evolving Markets • Early 80’s Market • Capital Decision Making Model • Late 90’s Market • Customer Awareness Model CGR/Oasis/Nature's Best

  10. Oasis’ Supply Chain Characteristics CGR/Oasis/Nature's Best

  11. Distribution Channels CGR/Oasis/Nature's Best

  12. Strategic Thrusts Options • E-commerce integration to fit all channels • EDI over the net • FAX • Web based Corroboration • Supply chain bolt-ons to ERP • WMS • VMI • Manufacturing initiatives (cells, Kanbans, MES, TQM, empowerment) • Other options, such as inventory consignment CGR/Oasis/Nature's Best

  13. Nature’s Best Unique Strategies for Supply Chain Channels Mark C. Smith Vice President, Distribution Nature’s Best 105 S.Puente St. Brea, California 92821 CGR/Oasis/Nature's Best

  14. Nature’s Best • Privately Owned. Established in 1969. • Largest Health Food Distributor on the West Coast. • 187,000 square foot facility. • 20,000 SKU’s. Full Case and Single Unit Shipping. • 2,000 deliveries per week. • Private Fleet operating over 2 million miles annually. • Delivery area of 7 western states, Hawaii, Alaska, New Zealand, Australia, Philippinesand Singapore. CGR/Oasis/Nature's Best

  15. NB’s Definition of EC • Telephone • Fax • Computer • MIS handheld order units • Any Electronic Business Transaction • Original E-Commerce was catalog sales CGR/Oasis/Nature's Best

  16. Present View of EC • Three Basic Types • Fulfillment to Consumer • Fulfillment to Retailer • independents (local SUO health food store) • regional retail chains (i.e., Walgreen’s, Safeway) • national specialty chains (GNC) • mass merchandisers (Wal-mart; Costco) • Manufacturer to Fulfillment CGR/Oasis/Nature's Best

  17. Wholesaler View Point • Web Sites are the same as a brick and mortar store front. • Direct selling to consumers is competing with your own retail customers. • E-Commerce or Web Site selling (e-tailing) will cause the continuing life of the wholesaler/fulfillment centers. • Fulfillment will be the life blood of e-commerce. The box must get moved in reality not virtual reality. CGR/Oasis/Nature's Best

  18. NB’s Future Look at EC • Fulfillment center. • Direct to retailers’ end user. • Direct to retailers (“unique channel mixes”) • Manufacturer to Fulfillment. • Automatic product replenishment orders created. • Vendor Managed Inventory (VMI) • Free Flowing Information (web corroborative) • Ability for manufacturer, brokers, fulfillment center, retailers, consumers to access vital information, stock status, ingredients, delivery schedules, order status. • Creates a true partnership between consumer/retailer/fulfillment center/broker/manufacturer. CGR/Oasis/Nature's Best

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