Chapter 13: Order Fulfillment, Logistics, Supply Chain Management

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Understand the role of order fulfillment and backoffice operations in EC. Describe the problems of managing the supply chain and the use of innovative solutions there...

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Nội dung Text: Chapter 13: Order Fulfillment, Logistics, Supply Chain Management

Chapter 13 Order Fulfillment, Logistics, Supply Chain Management 1
Learning Objectives 1. Understand the role of order fulfillment and backoffice operations in EC 2. Describe the process of order fulfillment 3. Understand the concept of the supply chain, its importance and management 4. Describe the problems of managing the supply chain and the use of innovative solutions there 5. Describe the need for integrating information systems of front office and back office 6. Trace the evolution of software that support activities along the supply chain and their management 7. Understand the relationship among ERP, SCM and EC. 2
The Y2K Order Fulfillment Problem In Dec. 1999 Competition among ETailers increases Special area: Toys; Big promotions, coupons Demand: very high, not anticipated Retailers: were unable to meet demand Customers: very unhappy Similar problems in gifts, book, etc. Also: online retailers has warehousing and logistics problems 3
Order Fulfillment Taking orders may be the easiest part Difficulties in groceries and fresh food One reason: Customized products Second: Pull type manufacturing 4
The Pull vs. Push Model 5
Major Concepts Order fulfillment: Deliver right order on time Front office operations: Order taking, advertisement, CRM Back office operations: Accounting, finance, inventor, packaging, logistics Logistics: Managing the flow of goods, information and money along the supply chain 6
The Process of Order Fulfillment 7
The Steps of Order Fulfillment 1. Payment Clearance 7. Purchasing, warehousing 2. Instock availability 8. Demand forecast 3. Packaging, shipment 9. Accounting, billing 4. Insuring 10. Customer contacts 5. Production (planning, execution) 11. Returns (Reverse logistics) 6. Plant services 8
Shipping a Tropical Fish 1. Placing order, payment 2. Transfer order to petstore.com, check stock 3. Use an wholesaler to get the fish 4. Supplier finds fish, ships to wholesalers 5. Wholesalers rushes to Petstore 6. Petstore uses FedEx to ship to customer with copy of credit card payment Discussion: What is the contribution of EC? 9
Why Intermediaries? 1. Wholesaler and deliveries in the Petstore case 2. Wholesalers as an aggregators; between many sellers and buyers 3. Can a virtual store replace a retailer? 4. Direct sales for large items 5. Example: The Lego Co. case 10
Channel Conflict Elimination of Intermediary many create a conflict Conflict between online and offline distribution This may impact order fulfillment and returns What if a manufacturer sells both wholesale and retail? (Microsoft) Customized product by manufacturers: ideal for direct sale 11
Supply Chain Management Definition: Flow of material, information, money, etc. from raw material suppliers through factories to customers It includes: organizations, procedures, people SCM: Integration of the business processes along the chain, Planning, Organizing, control of many activities Activities: Purchasing, delivery, packaging, checking, warehousing, etc. 12
Components of the Supply Chain 13
Components-Description Upstream: Suppliers, their suppliers (several tiers). From Raw material to the company Internal: All internal process that add value, conversion to find products Downstream: All activities in distribution and delivery to end customers 14
Complex-nonlinear Supply Chain 15
Benefits of SCM Reduce uncertainty along the chain Proper inventory levels in the chain Minimize delays Eliminate rush (unplanned) activities Provide superb customer service Major contributor of success (ever survival) 16
Global Supply Chain Can be very long Possible crossbroader problems Need information technology support of: communication and collaboration Possible delays due to: customs, tax, translations, politics 17
Problems along the Supply Chain Delays in production, distribution etc. Expensive Inventories Lack of partners’ coordination Uncertainties in deliveries Poor demand forecast Interference with production Poor quality 18
More difficulties Virtual companies do not have logistics infrastructures One company is a member of several supply chain Conventional warehouses are too expensive Need automatic warehouses with robots as pickers 19
Preliminary Activities Understand the supply chain (flow charts) Study internal and external parts Performance measurement are a must (Benchmarking) Multidimension performance analysis a BPR may be needed People’s relationships are a must 20