Channel decisions are among the most critical decisions facing management. The company's chosen channels intimately affect other marketing decisions. The company's pricing depends on whether it uses mass merchandisers or high-quality boutiques. The firm's sales force and advertising decisions depend on how much training and motivation the channel partner requires. In addition, the company's channel decisions involve relatively long-term commitments to other firms. When an automobile manufacturer signs up independent dealers sell its automobiles, the manufacturer cannot buy them out the next day and replace them with company-owned outlets.

Thus, there is a powerful initial tendency in channel arrangements. Therefore management must choose channels with an eye on tomorrow's likely selling environment as well as today's. This is an important area in Supply Chain Management as it determines the level of integration within the logistics pipeline.

Adequate inventory is critical in ensuring the continuity of operations within any industry. However, inventory investment can be a very expensive affair. The direct costs of carrying inventory depress profits and ties up much needed finance. Only through effective inventory management can we provide this support without over-committing the organisation's funds. Purchasing & Inventory Management (PIM) is past gaining prominence as a key area in ensuring competitiveness and is considered more and more to be a professional area where relevant skills and expertise are important.

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Shipping air/sea has two advantages. One, the cost of the combined modes is less than that of an all-air movement. Two, it is much faster than any of the available all-surface modes. Modern container ships can make Pacific crossing from Japan to Seattle in ten days. When we combine this with the air leg from Seattle to Europe, total transit time will range from ten to fourteen days. This is approximately one-third of the all-ocean transit time and one-half of the land bridge time. The in-transit inventory savings will outweigh the increased cost of the premium modes. The ability to evaluate and effectively decide on such issues will separate the true logistician from the 'practitioner'.

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