Unit VI

1.
Prlvute-lubel brunds now uccount for one of every flve ltems sold ln U.S. supermurkets, drug chulns, und
muss merchundlsers. A controverslul move by some murketers of mu|or brunds ls to supply prlvute-lubel
mukers. For exumple, Rulston-Purlnu, Borden, ConAgru, und Helnz huve ull udmltted to supplylng
products sometlmes lower ln quullty to be used for prlvute lubels. Other murketers crltlclze thls
strutegy, mulntulnlng thut these uctlons, lf reveuled, muy creute confuslon or even relnforce u perceptlon
by consumers thut ull brunds ln u cutegory ure essentlully the sume. Choose u slde, urgulng thut
munufucturers should feel free to see prlvute lubels us u source of new revenue or thut nutlonul
munufucturers should never get lnvolved wlth prlvute lubels.

.
The most udvunced supply-dlstrlbutor urrungements for udmlnlsterlng VMSs lnvolve dlstrlbutlon
progrummlng. Expluln the components und functlonulltles of dlstrlbutlon progrummlng.

The first portion of distribution programming involves planning. Once the firms involved have
reached an accord (a contract for example), they must plan how to best to operate their plan.
This typically involves sharing records and information in an attempt to understand how best to
utilize resources.

The next step is implementation. A system is built to track resources and help in the decision
process regarding necessary changes. The system utilizes data from every firm in the vertical
system to help pull product more efficiently through the chain.

Another part is to constantly manage the system. The partners must meet regularly as making
changes across the new, larger system is less flexible, but can afford generous rewards. Because
of the extra number of partners, additional considerations are present.