Order Fulfillment Along the Supply Chain

Abstract

With traditional retailing, customers go to a physical store and purchase items that they then take home. Large quantities are delivered to each store or supermarket; there are not too many delivery destinations. With e-tailing, customers want the goods quickly and to have them shipped to their homes. Deliveries of small quantities need to go to a large number of destinations. Also, items must be available for immediate delivery. Therefore, maintaining an inventory of items becomes critical. Maintaining inventory and shipping products costs money and takes time, which may negate some of the advantages of e-tailing. Let’s see how Amazon.com, the “king” of e-tailing, handles the situation.

Glossary

Collaborative planning, forecasting, and replenishment (CPFR) 

The practice of suppliers, manufacturers and retailers collaborating on the planning and forecasting of demand so that the supply of goods and services matches customer demand on the retailer’s shelf.

E-logistics 

The logistics of EC systems, typically involving small parcels sent to many customers’ homes (in B2C).

Logistics 

Activities required to efficiently and effectively control and manage the movement and storage of items, services and information across the entire supply chain to the consumer and potentially back.

Merge-in-transit 

Logistics model in which components for a product may come from two (or more) different physical locations and are shipped directly to the customer’s location.

Order fulfillment 

All the operations a company undertakes from the time it receives an order to the time the items are delivered to the customers, including all related customer services.

Radio frequency identification (RFID) 

Tag technology in which RFID (electronic) tags are attached to or embedded in objects (included people) and employ wireless radio waves to communicate with RFID readers so that the objects can be identified, located, or can transmit data.

Reverse logistics 

The movement of returns from customers to vendors.

Store-level distribution resource planning (DRP) 

A collaborative approach that utilizes a retailer’s POS data to produce a model that yields a bottoms-up, time-phased forecast of consumer sales, shipments, receipts and inventories at all stores or channels and DCs for all items, usually over a 12-month period.

Third-party logistics suppliers (3PL) 

External, rather than in-house, providers of logistics services.

Visibility 

The knowledge about where materials and parts are at any given time, which helps in solving problems such as delay, combining shipments, and more.

Warehouse management system (WMS) 

A software system that helps in managing warehouses.