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The nature and role of distribution channels
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For AutoZone’s Supply chain to be Successful, the company must understand all the components of it. That will go long way when implanting the strategies and concept into the chain. Distribution is the most crucial factor in the supply chain. It determines how and when the product to get the customers. Flourishing Chain will utilize every factor that impact its distribution channel and exploit all the technology to make the distribution more active and proficient in allowing customers to acquire their parts in an opportune moment. Over the years role of supply chain has been altered. The distribution has switched from shipping from one focal point, now technology has shortened the process that will to ship directly from the manufacture to the …show more content…
If AutoZone was a wholesaler, direct form would apply. Arguably, indirect application will have several influences that may it, such as response time and product availability. Customers select certain repair shop based on three factors, cost, quality, and speed. So, in turn they select auto parts retailers that can them their part faster and a better price. Therefore, if AutoZone cannot meet the response time of they need the part they possible can lose a sale. Product availability is something Autosome can’t control, resulting from they are retailer and not supplier. They can only predict the demand, but if they miscalculate inaccurately they can have too much inventory or too less, either way its creating a …show more content…
Unrolling the new program in the retail stores will have a slow start. Regional orientation will be schedule, so all three store and district managers take what they learn from the meeting illustrate it in theirs stores. The inventory tracking software is self-operating, company will to update their online website. The turn around time on implementing the software is at couple days, worst case
...dustrial Distribution allows me to pursue my interests in both Business and Engineering, and therefore I chose that major. Also, it will help me to build my personal characteristics that will make me successful in this major. As my education continues, I look forward to learning how manufacturers and distributors maintain good communication and relations, so that the products can be distributed efficiently and avoid problems. If there are problems, I would also like to comprehend ways to solve those problems. In the future, I hope to work for a company such as Amazon, Dell, or Boeing in the field of logistics. These companies depend on logistics in planning and conducting their operations. Since logistics and relations between manufacturer and distributor are critical to the everyday operations of businesses, understanding this will help me in my future endeavors.
The Home Depot Supply Chain Management model is based on integrated inventory management through a centralized network of 20 distribution centers, called Rapid Deployment Centers (RDCs) and three Direct Fulfillment Centers (DFCs) aimed at the e-commerce market (Bond, 2015). Orders are processed and managed to meet current and forecasted demands, sent to the regional RDCs, which service approximately 100 stores each, and sent to retail outlets to meet stock requirements (Bond, 2015). Direct Fulfillment Centers are e-commerce distribution systems. Home Depot delivers within a two-day timeframe to 90% of US based customers, and the system also leverages in store stock for same day pick-up (Bond,
When analysing the actual distribution model, we find out several faults. Firstly, the inventory management is much decentralized and there are few formal replenishment methods. The regional warehouses managers just define the stock goals and call central warehouse daily with a list of restocking needs. This lack of control can lead to an excess of stock, creating a higher inventory cost, or to a situation of stock out. When the latter happens, regional warehouse manager must order the required product from central warehouse and in order to compensate costumers he offers a discount of 4.000lires per piece.
A supply chain is a system through which organizations deliver their products and services to their customers. The network begins with the basic ingredients to start the chain of supply, which are the suppliers that supply raw materials, ingredients, and so on. From there, it will transfer the supplies to the manufacturer who builds, assembles, converts, or furnishes a product. The chain now needs to get the product to the consumer by transporting the finished product from the manufacturer through a warehouse or distribution center. An example is that Wal-Mart has a nearby distribution center where products are delivered there and then split up to be delivered to a retail Wal-Mart. “Wal-Mart will take responsibility for breaking down larger loads and delivering the product to other Wal-Mart stores” (Ehring 1).
AutoZone industry is an insignificant market for the automotive industry, however, it is also an automotive aftermarket industry. The industry supply parts and services for customer automobiles to keep them operating for the roads. The business in the automotive aftermarket encompasses all products and services bought for light, medium, and enormous vehicles after the original sale in conjunction with collision repairs, tires, display products, lubricants, accessories, and replacement parts. This also includes the significant tools and equipment to make the repairs to the vehicles (Aftermarket.org, 2012). The automotive replacement parts and accessories in the United States leading distributor is AutoZone. The other components of the industry
An analysis of the current situation revealed the following issues in the current spply chain:
Each intermediary adds his markup to the cost and as a result by the time the product reaches the consumer it becomes comparatively expensive. However in the past alternative distribution strategies have failed to meet the consumer needs. The large geographical spread of the target population, lack of distribution service technologies and immature market all add to the need of maintaining the status quo.
Currently, AutoZone operates eight distribution centers in the United States compared to around 28 facilities of one of its major competitors (Meek, 2016). Additionally, each store carries a comprehensive line of products for cars, sport utility vehicles, vans, and light trucks (AutoZone, 2016). Financially, they are doing well and since opening their first store on July 4, 1979, they joined the New York Stock Exchange (NYSE: AZO) and earned recognition from the Fortune 500 list (AutoZone,
Distribution- work on alternatives of outsourcing the distribution network or transportation routes. Should focus on outsource this non-core business activities if it is non-profitable. It is costly by not understanding the multi distribution network in standard line delivery (Multiple drop off points through retail channel sales)
Apparently, as gas prices rise, customers are not driving as much which decreases the chance for the need of a car repair. Economically, AutoZone has many factors that can hurt the company as a whole. In conclusion, AutoZone may not be immune to economic downfall; however, their functional strategies have assisted the company in re-grouping to take advantage of the rising DIY needs of their customers. Also, AutoZone has millions of customers that would instead fix their mechanical problem themselves rather than take their car to a mechanic. The DIY market is consistently rising in the auto part industry.
It is suggested for any organization to review, reassess any existing supply chain management or any delivery techniques, before developing a new supply chain method so that any exposure to high risk of failure is reduced. Somerset as a company taken advantage of outsourcing and transferred it product manufacturing to China leveraging low cost labor and raw material. The labor cost and other cheap material reduce Somerset overhead cost, but there is always the risk of not delivering product on time due to the foreign country political climate, change in tax and tariff and local
19. Sodhi, Sunil Chopra and ManMohan S. Managing Risk to Avoid Supply Chain Breakdown. MITSloan Management Review. [Online] October 15, 2004. [Cited: February 25, 2010.] http://sloanreview.mit.edu/the-magazine/articles/2004/fall/46109/managing-risk-to-avoid-supplychain-breakdown/.
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
While excuse may be granted for shortcomings unsuccessful efforts made in reducing cost of raw materials storage, that of the finished goods should not be forgiven, rather, attributed to inefficiency on the part of management. One of the major strategies used by manufacturing companies is to aggressively push their product to the final consumer. With this, the quantity of finished goods to be held will greatly reduce and so also their storage cost. To facilitate the timely distribution of their finished goods to consumer, companies permanently engaged some major distributors as mini-depot for further distribution to other smaller distributors within their localities. While major distributors also sells in bulk to other distributors within their locality and also engaged salesmen, these other distributor too sells in smaller quantities to retailers and some also engaged bicycle boys to sell directly to the final consumers. All the suppliers and actors on the chain of distribution are rewarded with commission on sales (distributors) or salaries plus commissions for salesmen and
An indirect distribution approach is a chain of intermediaries through which a product moves in order to be made available for purchase by a consumer. An indirect channel of distribution typically involves a product passing through additional steps as it moves from the manufacturing business from distributors to wholesalers and then retail stores (Business Dictionary, 2016). The use of intermediaries and indirect distribution allows a company to focus on the product like a computer, and entrusts retailers to get the product out to customers already using channels developed saving the company time and money. Indirect distribution enables retailers to utilize their existing skills, knowledge and resources to best fit the company, getting the computers to the market, while sharing the risk of the product life cycle (Richardson & Gosnay, 2010). Indirect distribution allows the computer company to use the existing network of stores that are already established in the marketplaces, and using another company’s resources cutting down overall costs of the company. When company’s use intermediaries, which should be considered partners, as soon as they are paid for the order, the wholesaler or retailer takes the title of the product and