A case study of marketing effects on global distribution logistics development

Jukka Hemilä, Jyri Pötry

    Research output: Chapter in Book/Report/Conference proceedingConference article in proceedingsScientificpeer-review

    Abstract

    The mutual interaction of marketing and logistics has been widely described in academic articles. For almost a century, many scholars and practitioners have recognised the close relationship between marketing and logistics activities in a marketing channel. Business philosophies such as JIT, QR and ECR implicitly emphasise this relationship as well. However, there is often a gap between marketing and logistics in theory and in practice. This separation results in problems. In logistics especially, the significance of marketing has been occasionally ignored.

    This is a single case study of distribution logistics development. The case company is a medium-sized high-tech consumer goods producer and distributor. The company has a few production plants and distribution centres and a number of warehouses all over the globe. The marketing function sets demands for logistics concerning product availability in local warehouses and the variety of product mix etc. From the logistics point of view those demands are quite expensive to fulfil. On the other hand, marketing provides important information for logistics. For example, the quality of forecasts and the feasible length of order cycle are dependent on marketing.

    The goal of the study is to analyse and find out what are the development possibilities and potential within the case when the scope and measures are:
    i.strictly limited to logistics
    ii.a combination of logistics and marketing
    At the beginning, the distribution network was described and appropriate data – sales of different products, forecasts, lead times, replenishment rules and transport costs etc. – were gathered. The network was analysed and development needs and issues were identified. A simulation model was created as a comparison tool of different development steps and scenarios. The development potential of logistics alone and of marketing and logistics together was established by means of simulation. The results indicate that major development potential derives from the co-operation of marketing and logistics, which is conformable with current theories.
    Original languageEnglish
    Title of host publicationProceedings of the Society of Operations Management VIII Annual International Conference
    Place of PublicationNew Delhi
    Number of pages9
    Publication statusPublished - 2006
    MoE publication typeA4 Article in a conference publication
    Event8th Annual International Conference of the Society of Operations Management, SOM 2004 - Mumbai, India
    Duration: 17 Dec 200421 Dec 2004
    Conference number: 8

    Conference

    Conference8th Annual International Conference of the Society of Operations Management, SOM 2004
    Abbreviated titleSOM 2004
    CountryIndia
    CityMumbai
    Period17/12/0421/12/04

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  • Cite this

    Hemilä, J., & Pötry, J. (2006). A case study of marketing effects on global distribution logistics development. In Proceedings of the Society of Operations Management VIII Annual International Conference http://virtual.vtt.fi/virtual/proj3/cobtec/files/som2004_hemila_potry.pdf