Administered vertical marketing system
A supply chain system in which there is no common ownership and no contractual relationships, but the dominant channel member controls the channel relationship.
Advanced shipping notice (ASN)
An electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment.
The process of going through the goods upon receipt to ensure they arrived undamaged and that the merchandise ordered was the merchandise received.
A type of marketing channel power that occurs when the channel member exerting the power threatens to punish or punishes another channel member for not undertaking certain tasks it wants it to do.
Collaborative planning, forecasting, and replenishment (CPFR)
An inventory management system that uses an electronic data interchange (EDI) through which a retailer sends sales information to a manufacturer.
Part of a VMI (vendor managed inventory) program whereby the manufacturer owns the merchandise until it is sold by the retailer.
Contractual vertical marketing system
A system in which independent firms at different levels of the supply chain join together through contracts to obtain economies of scale and coordination and to reduce conflict.
Corporate vertical marketing system
A system in which the parent company has complete control and can dictate the priorities and objectives of the supply chain; it may own facilities such as manufacturing plants, warehouse facilities, retail outlets, and design studios.
A distribution center to which vendors ship merchandise prepackaged and ready for sale. So the merchandise goes to a staging area rather than into storage. When all the merchandise going to a particular store has arrived in the staging area, it is loaded onto a truck, and away it goes. Thus, merchandise goes from the receiving dock to the shipping dock—cross dock.
The time between the decision to place an order and the receipt of merchandise.
The person who coordinates deliveries to distribution centers.
A facility for the receipt, storage, and redistribution of goods to company stores or customers; may be operated by retailers, manufacturers, or distribution specialists.
Electronic data interchange (EDI)
The computer-to-computer exchange of business documents from a retailer to a vendor and back.
A type of marketing channel power that occurs if the channel member exerting the power has expertise that the other channel member wants or needs and can therefore get them to do what they want.
Merchandise that is ready to be placed on the selling floor immediately.
A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor.
Horizontal channel conflict (horizontal supply chain conflict)
a type of channel conflict in which members at the same level of a marketing channel, for example, two competing retailers or two competing manufacturers, are in disagreement or discord, such as when they are in a price war.
Independent (conventional) supply chain
A loose coalition of several independently owned and operated supply chain members—a manufacturer, a wholesaler, and a retailer—all attempting to satisfy their own objectives and maximize their own profits, often at the expense of the other members.
A type of marketing channel power that occurs if the channel member exerting the power has information that the other channel member wants or needs and can therefore get them to do what they want.
Just-in-time inventory systems
Inventory management systems designed to deliver less merchandise on a more frequent basis than traditional inventory systems; the firm gets the merchandise “just in time” for it to be used in the manufacture of another product, in the case of parts or components, or for sale when the customer wants it, in the case of consumer goods; also known as quick response (QR) systems in retailing.
The amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller’s store, ready for sale.
A type of marketing channel power that occurs if the channel member exerting the power has a contractual agreement with the other channel member that requires the other channel member to behave in a certain way. This type of power occurs in an administered vertical marketing system.
The integration of two or more activities for the purpose of planning, implementing, and controlling the efficient flow of raw materials, in-process inventory, and finished goods from the point of origin to the point of consumption.
The set of institutions that transfer the ownership of and move goods from the point of production to the point of consumption; consists of all the institutions and marketing activities in the marketing process.
A document or display on a screen in a forklift truck indicating how much of each item to get from specific storage areas.
A situation that occurs in a marketing channel in which one member has the means or ability to have control over the actions of another member in a channel at a different level of distribution, such as if a retailer has power or control over a supplier.
Pull supply chain
Orders for merchandise generated at the store level based on demand data captured by point-of-sales terminals. (Seasonal,varies)
Push supply chain
Orders for merchandise allocated to stores based on forecasted demand, the inventory position at the distribution center, and the stores’ needs. (Steady demand such as milk, eggs)
An inventory management system used in retailing; merchandise is received just in time for sale when the customer wants it; see just-in-time (JIT) systems.
Radio frequency identification (RFID) tag
Tiny computer chips that automatically transmit to a special scanner all the information about a container’s contents or individual products.
The process of recording the receipt of merchandise as it arrives at a distribution center or store.
A type of marketing channel power that occurs if one channel member wants to be associated with another channel member. The channel member with whom the others wish to be associated has the power and can get them to do what they want.
A type of marketing channel power that occurs when the channel member exerting the power offers rewards to gain power, often a monetary incentive, for getting another channel member to do what it wants it to do.
Strategic relationship (partnering relationship)
A supply chain relationship that the members are committed to maintaining long term, investing in opportunities that are mutually beneficial; requires mutual trust, open communication, common goals, and credible commitments.
Supply chain management
Approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, as well as to minimize system-wide costs while satisfying the service levels their customers require.
Ticketing and marking
Creating price and identification labels and placing them on the merchandise.
Universal Product Code (UPC)
The black-and-white bar code found on most merchandise.
An approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer’s inventory levels in each of its stores.
Vertical channel conflict (vertical supply chain conflict)
a type of channel conflict in which members of the same marketing channel, for example, manufacturers, wholesalers, and retailers, are in disagreement or discord.
Vertical marketing system
A supply chain in which the members act as a unified system; there are three types: administrated, contractual, and corporate.
Those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods (usually in smaller quantities) to retailers or industrial or business users.