Chapter 13 Order Fulfillment along the Supply Chain

Chapter 13 Order Fulfillment along the Supply Chain in E-Commerce

Learning Objectives 1. Define EC order fulfillment and describe the EC order fulfillment process. 2. Describe the make-to-order approach and 3 D printing. 3. Describe the role of warehousing in order fulfillment and the use of robots there. 4. Describe EC delivery methods including futuristic ones. 5. Describe the major problems of EC order fulfillment along the supply chains. 6. Describe various solutions to EC order fulfillment problems. 7. Describe RFID supply chain applications. 8. Describe B 2 B order fulfillment. 9. Describe other supply chain topics.

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

Order Fulfillment and Logistics: An Overview • The EC Order Fulfillment Process o o o o o 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 o o o Correct product delivery On time delivery Order tracking Speedy delivery Free shipping Order Fulfillment and the Supply Chain

Orders received Customizatio n? Yes Orders processed; 13. 3 Warehousing No Supply Chain problems 13. 5 13. 6 Solutions 13. 7 RFID M-T-O 13. 2 Figure 13. 2 Highlights of EC order fulfilment Delivery to customers 13. 4

ORDER FULFILLMENT IN MAKE-TO-ORDER (MTO) AND MASS CUSTOMIZATION • Mass Customization, Make-to-Order, and Assembleto-Order • Make-to-Order and Assemble-to-Order

WAREHOUSING, ROBOTS AND WAREHOUSE MANAGEMENT SYSTEMS • Using Robots (Bots) in Warehouses • Warehouse Management System (WMS)

DELIVERY TO CUSTOMERS: FROM ROBOTS TO DRONES • Speeding Up Deliveries: From Same Day to a Few Hours o o Same Day Delivery by Drones Obstacles to Drone Delivery by Robots

Problems in Order Fulfillment Along Supply Chains • Uncertainties in Demand • Inadequate Logistical Infrastructure o *Third-party logistics suppliers (3 PL) • 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 o o o *Warehouse management system (WMS) Inbound functions Inventory functions Resource management Outbound functions 3 PL/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 o Delivery by Drones o Same Day Delivery • Partnering Efforts and Outsourcing Logistics o 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 o Fulfilling Orders

Solutions to Order Fulfillment Problems Along the Supply Chain • Handling Returns (Reverse Logistics) o Return the item to the place of purchase o Separate the logistics of returns from the logistics of delivery o Completely outsource returns o 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 B 2 B o Using E-Marketplaces and Exchanges to Ease Order Fulfillment Problems in B 2 B o Order Fulfillment in Services o Other Solutions to Supply Chain Problems • *Visibility • Innovative E-Fulfillment Strategies o *Merge-in-transit • Integration and Enterprise Resource Planning o The Supply Chains of Tomorrow

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

Ordering e-procurement B 2 B large order Analyze component Inventory Arrange payment Contact suppliers if needed Suppliers ship immediately, RFID Information Warehousing Production Delivery Receiving, checking, RFID Prepare all necessary components (Robots) Plan, get all components, RFID Assemble hardware, software Testing Additional parts and documents Figure 13. 4 Dell’s B 2 B order fulfillment Packaging To delivery docks Deliver to customers

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 o Directory Services o Newsletters o Search Engines and News Aggregators

Other E-Commerce Support Services • More EC Support Services o o o o o 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 o 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 Issues 1. How will you address the omni-channel imperative? 2. If you are an EC vendor, what are the bottlenecks in your order fulfillment process? 3. How should we manage returns? 4. For which items should we keep our own inventory? 5. What is the alliance strategy in order fulfillment? 6. What logistics information should we provide to customers? 7. Should we use RFID for the order fulfillment?

Summary 1. The order fulfillment process. 2. Make-to-order and 3 D printing. 3. Warehouses and robots in order fulfillment. 4. Delivery to customers. 5. Problems in order fulfillment. 6. Solutions to order fulfillment problems. 7. RFID tags. 8. Other supply chain topics.