Chapter 13
Order Fulfillment,
Logistics, and
Supply Chain Management
1
Figure 13-1
Push vs. Pull Supply Chains

2
Major Concepts
Order fulfillment: Deliver right order on time
Front office operations:
Order taking
Advertisement
CRM

Bac...
Major Concepts (cont.)
Definitions of logistics:

Managing the flow of goods, information and
money along the supply chain...
The Steps of Order Fulfillment
1. Payment Clearance
2. In-stock availability
3. Packaging, shipment
4. Insuring
5. Product...
Supply Chain Management
Definition: Flow of
material, information,
money, etc. from raw
material suppliers
through factori...
Benefits of SCM
Reduce uncertainty along the chain
Proper inventory levels in the chain
Minimize delays
Eliminate rush (un...
Global Supply Chain
Can be very long
Possible cross-border problems
Need information technology support of:
Communication
...
Areas of Opportunities
Manufacturing
processes
Warehousing
operation
Packaging and
delivery
Material
inspection/receiving
...
Areas of Opportunities (cont.)
Invoicing, auditing
and other accounting
activities
Collaboration
procedures with
partners
...
Using Inventories
Insurance against stock out
Can be in several places
Can be excessive
Can be insufficient
Example: Littl...
Using Inventories
Using inventories to solve supply chain
shortages:

Building inventories as insurance against
uncertaint...
EC Solutions Along
the Supply Chain
Automate order taking
Use EDI/Internet
Web-based ordering; intelligent agents

Electro...
EC Solutions Along
the Supply Chain (cont.)
Digitization of
products—instant
order fulfillment
Back-office interface
Short...
Software Support
SCM Tracking
Activities

Type - available
systemsof Software to customers

Upstream activities

Supplier...
ERP Benefits

ERP = Integrating business processes and
activities in real time
Solves many supply chain problems
Necessary...
ERP Implementation
Need to interface with EC order taking
system
Manages all routine transactions in the
enterprise
Recent...
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E-Commerce 13

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E-Commerce 13

  1. 1. Chapter 13 Order Fulfillment, Logistics, and Supply Chain Management 1
  2. 2. Figure 13-1 Push vs. Pull Supply Chains 2
  3. 3. Major Concepts Order fulfillment: Deliver right order on time Front office operations: Order taking Advertisement CRM Back office operations Accounting Finance Inventory Packaging Logistics 3
  4. 4. 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 4
  5. 5. The Steps of Order Fulfillment 1. Payment Clearance 2. In-stock availability 3. Packaging, shipment 4. Insuring 5. 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 5
  6. 6. 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. 6
  7. 7. 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) 7
  8. 8. 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 8
  9. 9. 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 9
  10. 10. 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 10
  11. 11. Using Inventories Insurance against stock out Can be in several places Can be excessive Can be insufficient Example: Littlewoods stores; UK 11
  12. 12. Using Inventories Using inventories to solve supply chain shortages: Building inventories as insurance against uncertainty—products 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 12
  13. 13. 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 13
  14. 14. EC Solutions Along the Supply Chain (cont.) Digitization of products—instant 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 14
  15. 15. Software Support SCM Tracking Activities Type - available systemsof Software to customers Upstream activities Supplier management Ordering systems Internal supply chain activities Order tracking systems Inventory management Purchasing order management Downstream activities Budgeting, cost control Human resource information Salesperson productivity tools Online telemarketing Ad management etc. 15
  16. 16. 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 16
  17. 17. ERP Implementation Need to interface with EC order taking system Manages all routine transactions in the enterprise Recently extended to suppliers and customers 17

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