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Supplier Tier 2 Supplier Logistics Purchasing Marketing Sales RD Customer Consumer/Enduser CUSTOMER RELATIONSHIP MANAGEMENT CUSTOMER SERVICE MANAGEMENT DEMAND MANAGEMENT ORDER FULFILLMENT MANUFACTURING FLOW MANAGEMENT PROCUREMENT PRODUCT DEVELOPMENT AND COMMERCIALIZATION RETURNS PRODUCT FLOW Production Finance Manufacturer Information Flow COST TRADEOFFS REQUIRED IN MARKETING AND LOGISTICS Product Price Marketing Objective: Logistics Objective: Allocate resources to the marketing mix in such a manner as to maximize the longterm profitability of the firm. Minimize Total Costs given the customer service objective where total costs = Transportation Costs + Warehousing Costs + Order Processing and Information Costs + Lot Quantity Costs + Inventory Carrying Costs Promotion Place Customer Service Levels Inventory Carrying Costs Transportation Costs Warehousing Costs Order Processing and information Costs Lot Quantity Costs Logistics Marketing Figure 2 SUPPLY CHAIN MANAGEMENT FRAMEWORK: Elements and Key Decisions 2) What processes should be linked with each of these key supply chain members? 1) Who are the key supply chain members with whom to link processes? Supply Chain Business Processes Supply Chain Network Structure Supply Chain Management Components Managed Process Links Monitor Process Links NotManaged Process Links NonMember Process Links n 2 3 1 2 n 1 1 n 2 1 3 n n 1 1 2 1 n 2 n 1 2 n 1 n 1 n Tier 1 Customers Tier 2 Customers Tier 3 to Consumers/ EndCustomers Tier 2 Suppliers Tier 1 Suppliers Tier 3 to Initial suppliers n 1 Figure 3 Types of Interpany Business Process Links Initial Suppliers Tier 3 to n customers Consumers/Endcustomers Members of the Focal Company’s Supply Chain NonMembers of the Focal Company’s Supply Chain Focal Company Communication and Information Flow Facility Structure Work Flow/ Activity Structure Organization Structure Pro