Test 3 Flashcards
(63 cards)
Drivers of Supply Chain Network Redesign
1-Changes in global trade patterns
2-Changes in customer service requirements–The emergence of omni-channel supply chains
3-Shifts in customer and/or market locations
4-Changes in corporate ownership/merger and acquisition activity
5-Corporate organizational change
6-Cost pressures
7-Competitive capabilities
Customer Order Fulfillment Models
-Dedicated Fulfillment
-Pool Distribution
-Direct Store Delivery
-Flow-through Fulfillment
-Store Fulfillment
-Integrated Fulfillment
Integrated Fulfillment
the retailer operates one distribution network to service both “bricks-and-mortar” (retail stores) and “clicks-and-mortar”(internet sites) channels
Advantages of Integrated Fulfillment
Low start-up costs for retailers, Workforce efficiency
Disadvantages of Integrated Fulfillment
Order profile changes (store orders in case and/or pallet quantities, consumer orders, “eaches” in smaller order quantities ), unavailability or products in eaches, “fast pick” or broken case operation requirements for unit pick (each pick)
Dedicated Fulfillment
the retailer operates two separate distribution networks to service “bricks-and-mortar” (retail stores) and “click-and-morter” (internet sites)
Advantages of Dedicated Fulfillment
Elimination of most of the disadvantages of integrated fulfillment
Disadvantages of Dedicated Fulfillment
Duplicate facilities and duplicate inventories
Pool Distribution
Individual shipments are offloaded at the pool point (or distribution center) and prepared to move on to the next stage of their journey. They are scanned and organized according to their final destinations.
Pool Consolidation
Shipments are pooled together and consolidated at the shipper’s distribution center. Consolidating shipments can be complex because you need to plan everything from delivery schedules to different drivers to ensure smooth shipping
Sorting
Shipments are organized based on their destinations and, then loaded onto the truck carefully to make the best use of available space. They will be stacked floor to ceiling to avoid any wasted room. Depending on the truck’s size, numerous large loads may fit comfortably into one vehicle, eliminating the need for multiple drivers.
Transportation
The truck drives to the relevant geographic region, usually to a specific pool point
Final Delivery
All individual shipments are sent to their destinations on local delivery truck and vans. If transportation has been planned and coordinated effectively, shipments will reach their destination safely and on time.
Direct store delivery
involves a manufacturer delivering its product directly to a retailer’s stores, by passing the retailer’s distribution network.
Advantages of Direct store delivery
Reduction of inventory in the distribution network
Disadvantages of Direct store delivery
Possible reduction of inventory visibility of the products to the retailers, requirements of close collaboration and agreement between the manufacture and retailer
Store Fulfillment
The order is placed through the internet site. The order is sent to the nearest retail store where it is picked and put aside for the customer to pick up or the store can arrange delivery
Advantages of Store fulfillment
Short lead time to the customer, Low start-up costs for the retailer, returns handled through the retail store, product available in customer units
Disadvantages of Store fulfillment
Reduced control and consistency over order fill, conflicts between store and internet order inventories, requirements of real-time visibility to in-store inventories, requirements of stores; space to store and stage products for pickup
Flow-through Fulfillment
The product is picked and packed at the retailer’s distribution center and then sent to the store for customer pickup or delivery
Advantages of Flow-through Fulfillment
Eliminates the inventory conflicts between store sales and internet sales, no cost of the “last mile” transportation, store-level inventory status not required, returns handled through the retail store
Disadvantages of Flow-through Fulfillment
Storage space at the store for pickup items, longer fulfillment lead time
Global/National/Regional determinants for facilities location
Labor climate, Transportation services and infrastructure, Proximity to markets and customers, Quality of life, Taxes and industrial development incentives, Supplier networks, Land costs and utilities, IT infrastructure, Company preference, and Regulatory environment
Site-Specific determinants for facilities location
Transportation access (truck/air/rail/water), Inside/outside metropolitan area, Availability of workforce and needed skill sets, Land costs and taxes, Utilities, Outcome is physical address
