Order Fulfillment Along the Supply Chain Chapter 12 Order Fulfillment Along the Supply Chain

Learning Objectives Define EC order fulfillment and describe the EC order fulfillment process. Describe the major problems of EC order fulfillment. Describe various solutions to EC order fulfillment problems. Describe RFID supply chain applications. Describe collaborative planning and the CPFR model. Describe other EC support services. Discuss the drivers of outsourcing support services.

Order Fulfillment and Logistics: An Overview Basic Concepts of Order Fulfillment and Logistics *Order fulfillment Overview of Logistics *Logistics Traditional Versus EC Logistics *E-logistics

Order Fulfillment and Logistics: An Overview The EC Order Fulfillment Process Activity 1: Making sure the customer will pay Activity 2: Checking for in-stock availability Activity 3: Arranging shipments Activity 4: Insurance Activity 5: Replenishment Activity 6: In-house production Activity 7: Use contractors Activity 8: Contacts with customers Activity 9: Returns *Reverse logistics

Order Fulfillment and the Logistics Process

Order Fulfillment and Logistics: An Overview The Importance of Order Fulfillment Correct product delivery On time delivery Order tracking Speedy delivery Free shipping Order Fulfillment and the Supply Chain

Problems in Order Fulfillment Along Supply Chains Uncertainties in Demand Inadequate Logistical Infrastructure *Third-party logistics suppliers (3PL) Inefficient Financial Flows Lack of Information Sharing

Solutions to Order Fulfillment Problems Along the Supply Chain Improvements in the Order-Taking Activity Warehousing and Inventory Management Improvements *Warehouse management system (WMS) Inbound functions Inventory functions  Resource management  Outbound functions  3PL/divisional support

Solutions to Order Fulfillment Problems Along the Supply Chain Changing the Structure and Process of the Supply Chain Speeding Deliveries: From Same Day to a Few Minutes Delivery by Drones Same Day Delivery Partnering Efforts and Outsourcing Logistics Using Robots in Warehouses

Changes in the Supply Chain

Solutions to Order Fulfillment Problems Along the Supply Chain Integrated Global Logistics Program Order Fulfillment in Make-To-Order and Mass Customization Fulfilling Orders

Solutions to Order Fulfillment Problems Along the Supply Chain Handling Returns (Reverse Logistics) Return the item to the place of purchase Separate the logistics of returns from the logistics of delivery Completely outsource returns Allow the customer to physically drop the returned item at a collection station or a physical store of the same vendor Auction the returned items

Solutions to Order Fulfillment Problems Along the Supply Chain Order Fulfillment in B2B Using E-Marketplaces and Exchanges to Ease Order Fulfillment Problems in B2B Order Fulfillment in Services Other Solutions to Supply Chain Problems *Visibility Innovative E-Fulfillment Strategies *Merge-in-transit Integration and Enterprise Resource Planning The Supply Chains of Tomorrow

RFID and CPFR as Key Enablers in Supply Chain Management The Essentials of RFID *Radio frequency identification (RFID) RFID Applications in the Supply Chain Around the Globe RFID at Starbucks RFID at Deutsche Post (Germany) RFID at Atlantic Beef Products (Ontario, Canada) *Collaborative Planning, Forecasting, and Replenishment

Digital Supply Chains Source: Intel, “Building the Digital Supply Chain: An Intel Perspective.” Intel Solutions White Paper, January 2005, Figure 5, p. 9. Reprinted with permission from Intel Corporation

RFID at Walmart and Its Suppliers: the Seven-Step Process Drawn by E. Turban

Other E-Commerce Support Services Consulting Services Directory Services, Newsletters, and Search Engines Directory Services Newsletters Search Engines and News Aggregators

Other E-Commerce Support Services More EC Support Services Trust Services Trademark and Domain Names Digital Photos Access to Commercial Databases Knowledge Management Client Matching E-Business Rating Sites Security and Encryption Sites Web Research Services Coupon-Generating Sites

Other E-Commerce Support Services Outsourcing EC Support Services Why Outsource EC Services? The process includes the following major steps: EC strategy initiation, formulation, and implementation (Chapter 13) Systems design (Chapter 14) Building (or buying) the systems (Chapter 16) Hosting, operating, and maintaining the EC site (Chapter 16) IT Outsourcing and Application Service Providers

Managerial Issues If you are an EC vendor, what is the bottleneck in the order fulfillment process? For which items should we keep our own inventory? What is the alliance strategy in order fulfillment? How should we manage returns? What logistics information should we provide to customers? Should we use RFID for the order fulfillment? Can we use CPFR in SMEs?

Summary The order fulfillment process. Problems in order fulfillment. Solutions to order fulfillment problems. RFID tags. Collaborative planning and CPFR. Other support services. Outsourcing EC services.