Chapter 13: Order Fulfillment, Logistics, and Supply Chain Management

Chapter 13
Order Fulfillment, Logistics, and Supply Chain Management

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Figure 13-1 Push vs. Pull Supply Chains
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Major Concepts
Order fulfillment: Deliver right order on time Front office operations:
Order taking Advertisement CRM
Back office operations

Accounting Finance Inventory Packaging Logistics
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Major Concepts (cont.)

Definitions of logistics:
Managing the flow of goods, information and money along the supply chain Aspect of military science dealing with procurement, maintenance, and transportation Management of details of an operation All activities involved in management of product movement
Right product Right place Right time
The Steps of Order Fulfillment

1. 2. 3. 4. 5. Payment Clearance In-stock availability Packaging, shipment Insuring Production (planning, execution) 6. Plant services 7. Purchasing, warehousing 8. Customer contacts 9. Returns (Reverse logistics) 10. Demand forecast 11. Accounting, billing 12. Reverse logistics
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.
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)
Global Supply Chain

Can be very long Possible cross-border problems Need information technology support of:
Communication Collaboration
Possible delays due to: customs, tax, translations, politics

Areas of Opportunities
Manufacturing processes Warehousing operation Packaging and delivery Material inspection/receiving Inbound and outbound transportation Reverse logistics (return) In-plant material handling Vendor management program Customer order processing
Areas of Opportunities (cont.)

Invoicing, auditing and other accounting activities Collaboration procedures with partners Employee training and deployments Labor scheduling Use of teams and empowerment of employees Automation of processes Use of software for facilitating all the above Inventory management and control
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Using Inventories
Insurance against stock out Can be in several places Can be excessive Can be insufficient Example: Littlewoods stores; UK
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Using Inventories
Using inventories to solve supply chain shortages:
Building inventories as insurance against uncertaintyproducts and parts flow smoothly Very difficult to correctly determine inventory levels for each product and part
Customized finished products can only stock components Excessive levels are costly to store Insufficient levels cannot protect against high demand or slow delivery times
EC Solutions Along the Supply Chain

Automate order taking
Use EDI/Internet Web-based ordering; intelligent agents
Electronic payments Inventory reduction (made-to-order pull process)

Improved inventory management Decreased administrative costs
EC Solutions Along the Supply Chain (cont.)

Digitization of productsinstant order fulfillment Back-office interface
Shortens cycle time Eliminates errors
Collaborative commerce among members of the supply chain

Shortens cycle time Minimizes delays and work interruptions Lower inventories Lower administrative costs
livery scheduling
Software Support
SCM Activities Tracking Type of systems - Software available to customers
Supplier management Ordering systems Order tracking systems Inventory management Purchasing order management Budgeting, cost control Human resource information
Upstream activities
Internal supply chain activities
Downstream activities
Salesperson productivity tools Online telemarketing Ad management etc.

ERP Benefits
ERP = Integrating business processes and activities in real time Solves many supply chain problems Necessary for medium to large corporations Helpful also for some SMEs
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ERP Implementation
Need to interface with EC order taking system Manages all routine transactions in the enterprise Recently extended to suppliers and customers
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Chapter 13: Order Fulfillment, Logistics, and Supply Chain Management

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Chapter 13: Order Fulfillment, Logistics, and Supply Chain Management

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Chapter 13

Order Fulfillment, Logistics, and Supply Chain Management

Figure 13-1 Push vs. Pull Supply Chains

Back office operations

Major Concepts (cont.)

The Steps of Order Fulfillment

Supply Chain Management

Global Supply Chain

Possible delays due to: customs, tax, translations, politics

Areas of Opportunities (cont.)

EC Solutions Along the Supply Chain

Electronic payments Inventory reduction (made-to-order pull process)

EC Solutions Along the Supply Chain (cont.)

Collaborative commerce among members of the supply chain

Internal supply chain activities

Salesperson productivity tools Online telemarketing Ad management etc.

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