1. Achieving synchronisation through shared information
a. Before synchronisation
b. After synchronisation
Customer
Tier 1
Tier 1
OEM
Tier 2
Tier 1
OEM
Customer
Tier 2
Tier 2
Customer
Key :
OEM – Original Equipment Manufacturer
Tier 1 & 2 – Supplier echelons

2. Product and service flow
The extended enterprise and the virtual supply chain
Sources
Converters
Retailers
Suppliers
Distributors
Consumer
Product and service flow
Information flow
Funds flow
Source: A. T. Kearney

3. Co-ordination function Customer service communication function
Functions of a logistics information system
Stock management
By product/customer
By location
Demand forecasting
Strategy planning
Planning function
Production scheduling
Materials requirement planning
Sales/marketing planning
Co-ordination function
External data
Customer orders
Inbound shipments
Internal data
Production
Inventory
Database
Customer order status
Inventory availability
By product
By stock location
Outbound shipment status
Customer service communication function
Customer service levels
Vendor performance
Carrier performance
System performance
Control function

4. Synchronous supply and cross-docking
(1) Daily sales data drives the replenishment order system
Supplier
Store
Head
Office
Logistics
Service
Company

5. Synchronous supply and cross-docking
(2) Acting on this information a consolidated pick-up and store delivery
sequence is activated
Supplier
Supplier
Supplier
Scheduled
pick-ups from
suppliers
Supplier
Supplier
Logistics
Service
Company
Transhipment
centre
Store
Store
Consolidated
local delivery
Store
Store
Store

6. Grocery industry delivery system order cycle
Remove
product from
shelf
Initiate
order
Receive order
and initiate
processing
Authorise
shipment
Receive
shipment and
store
Place on
Complete
production
and store
cycle
Purchase
materials
Raw material storage
Warehouse
Production
Manufacturer
inventory
depletion
Inventory
In-store inventory
storage
Order
Retail
warehouse storage
Delivery
transmission
Interface
Retailer

7. Grocery industry product flow
Retailer
Manufacturer
1 day
1-3 days
Initiate
order
Order
transmission
36 days
Inventory
depletion
Receive order
and initiate
processing
Complete
production
and store
Remove
product
from shelf
Order
processing
Warehouse
order
storage
In-store inventory
Production
24 days
Authorise
shipment
Place on
shelf
Initiate
production
cycle
Manufacturer
inventory
depletion
Retail
warehouse storage
Delivery
Receive
shipment and
store
Raw material
storage
6 days
18 days
Purchase
materials
Interface