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Chapter 12Order Fulfillment Along the Supply
Chain
Learning Objectives1. Define EC order fulfillment and describe the EC
order fulfillment process.2. Describe the major problems of EC order
fulfillment.3. Describe various solutions to EC order fulfillment
problems.4. Describe RFID supply chain applications.5. Describe collaborative planning and the CPFR
model.6. Describe other EC support services.7. Discuss the drivers of outsourcing support
services.
Order Fulfillment and Logistics: An Overview
• Basic Concepts of Order Fulfillment and Logisticso *Order fulfillment
• Overview of Logisticso *Logistics
• Traditional Versus EC Logisticso *E-logistics
Order Fulfillment and Logistics: An Overview
• The EC Order Fulfillment Processo Activity 1: Making sure the customer will payo Activity 2: Checking for in-stock availabilityo Activity 3: Arranging shipmentso Activity 4: Insuranceo Activity 5: Replenishmento Activity 6: In-house productiono Activity 7: Use contractorso Activity 8: Contacts with customerso Activity 9: Returns
• *Reverse logistics
Order Fulfillment and the Logistics
Process
Order Fulfillment and Logistics: An Overview
• The Importance of Order Fulfillmento Correct product deliveryo On time deliveryo Order trackingo Speedy deliveryo Free shippingo Order Fulfillment and the Supply Chain
Problems in Order Fulfillment Along Supply
Chains• Uncertainties in Demand• Inadequate Logistical Infrastructure
o *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 Improvementso *Warehouse management system (WMS)o Inbound functions o Inventory functions o Resource management o Outbound functions o 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 Minuteso Delivery by Droneso Same Day Delivery
• Partnering Efforts and Outsourcing Logisticso 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 Customizationo Fulfilling Orders
Solutions to Order Fulfillment Problems Along
the Supply Chain• Handling Returns (Reverse Logistics)
o Return the item to the place of purchaseo Separate the logistics of returns from the
logistics of deliveryo Completely outsource returnso Allow the customer to physically drop the
returned item at a collection station or a physical store of the same vendor
o Auction the returned items
Solutions to Order Fulfillment Problems Along
the Supply Chain• Order Fulfillment in B2B
o Using E-Marketplaces and Exchanges to Ease Order Fulfillment Problems in B2B
o Order Fulfillment in Serviceso Other Solutions to Supply Chain Problems
• *Visibility
• Innovative E-Fulfillment Strategieso *Merge-in-transit
• Integration and Enterprise Resource Planningo The Supply Chains of Tomorrow
RFID and CPFR as Key Enablers in Supply Chain
Management• The Essentials of RFID
o *Radio frequency identification (RFID)• RFID Applications in the Supply Chain
Around the Globeo RFID at Starbuckso RFID at Deutsche Post (Germany)o 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 Engineso Directory Serviceso Newsletterso Search Engines and News Aggregators
Other E-Commerce Support Services
• More EC Support Serviceso Trust Serviceso Trademark and Domain Nameso Digital Photoso Access to Commercial Databaseso Knowledge Managemento Client Matchingo E-Business Rating Siteso Security and Encryption Siteso Web Research Serviceso Coupon-Generating Sites
Other E-Commerce Support Services
• Outsourcing EC Support Serviceso Why Outsource EC Services?
• The process includes the following major steps:1. EC strategy initiation, formulation, and
implementation (Chapter 13)2. Systems design (Chapter 14)3. Building (or buying) the systems (Chapter 16)4. Hosting, operating, and maintaining the EC site
(Chapter 16)
o IT Outsourcing and Application Service Providers
Managerial Issues1. If you are an EC vendor, what is the bottleneck in
the order fulfillment process? 2. For which items should we keep our own
inventory? 3. What is the alliance strategy in order fulfillment? 4. How should we manage returns? 5. What logistics information should we provide to
customers? 6. Should we use RFID for the order fulfillment? 7. Can we use CPFR in SMEs?
Summary1. The order fulfillment process.2. Problems in order fulfillment. 3. Solutions to order fulfillment problems. 4. RFID tags. 5. Collaborative planning and CPFR. 6. Other support services. 7. Outsourcing EC services.
