structural separation
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STRUCTURAL
SEPARATION
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• In a competitive environment, single enterprisesacting alone cannot fully achieve all
management goals.
•Customer demands increasing and becomingmore specific
• Firms must undertake initiatives to coordinate
responsibilities across the supply chain in order
to improve service and lower costs.
• Successful relationships require managers to
rethink on integrated and focused supply chain
strategies.
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Supply Chain Management is:
•The integration of key businesses processes
• From end user through original suppliers
• That provides products, services and information
• Add value for customers and other stakeholders.
The relatively recent incorporation of the term
network into supply chain management research can
be seen as an attempt to make the concept wider.
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• The business network approach assumes that
the systems are open• Thus, the network is embedded in and
interacting with its environment.
• Firms in business-to-business markets are
embedded in a complex network of relationshipswith suppliers, customers as well as a number of
other stakeholders.
A network is
“a structure where a number of nodes are
re lated to each o ther by speci f ic th reads.”
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• Bowersox (1978, 1986), introduced the idea of channel separation with two flows: transaction
creating efforts and logistical efforts.
• In order to achieve a satisfactory marketing
process, a flow of transaction creating efforts
and a flow of logistical efforts must exist and be
coordinated.
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“Channel or Structural Separation”
• In modern era organizations separate four flows
of channels to describe the structure of and
better manage the supply chains.
• These are:Selling
Ordering
physical distribution, and payment channels.
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Selling Channel
• A chain of companies
• Concerned with all the operations in sales
activities and decisions, from available
possibilities as well as new structures for sellingchannel choices.
• Channel is responsible for serving customers
with flow of all information concerning products
and services
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Ordering Channel
• A chain of companies that consists of all theoperations concerning ordering activities as well
as decisions about ordering channel’s structure
Physical Distribution Channel
• A chain of companies
•Concerned with product planning, production &physical movement of different types of products
• Decisions for the structuring of these activities
starting from raw materials ending at final
products
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• A chain of companies covering the decisions
and structures concerning payment, insurance,
and finance activities in the supply chain
Payment Channel