Professional Documents
Culture Documents
Learning Objectives
1. Understand the role of order fulfillment and back-office
operations in EC
2. Describe the process of order fulfillment
3. Understand the concept of the supply chain, its
importance and management
4. Describe the problems of managing the supply chain
and the use of innovative solutions there
5. Describe the need for integrating information systems of
front office and back office
6. Trace the evolution of software that support activities
along the supply chain and their management
7. Understand the relationship among ERP, SCM and EC. 2
Order Fulfillment
Taking orders may be the easiest part
Difficulties in groceries and fresh food
One reason: Customized products
Second: Pull type manufacturing
Major Concepts
Order fulfillment: Deliver right order on
time
Front office operations: Order taking,
advertisement, CRM
Back office operations: Accounting,
finance, inventor, packaging, logistics
Logistics: Managing the flow of goods,
information and money along the supply
chain
Payment Clearance
In-stock availability
Packaging, shipment
Insuring
Production (planning,
execution)
6. Plant services
7. Purchasing,
warehousing
8. Demand forecast
9. Accounting, billing
10. Customer contacts
11. Returns (Reverse
logistics)
Why Intermediaries?
1. Wholesaler and deliveries in the Petstore
case
2. Wholesalers as an aggregators; between
many sellers and buyers
3. Can a virtual store replace a retailer?
4. Direct sales for large items
5. Example: The Lego Co. case
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Channel Conflict
Elimination of Intermediary many create a
conflict
Conflict between online and offline
distribution
This may impact order fulfillment and returns
What if a manufacturer sells both wholesale
and retail? (Microsoft)
Customized product by manufacturers: ideal
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for direct sale
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Components-Description
Upstream: Suppliers, their suppliers
(several tiers). From Raw material to the
company
Internal: All internal process that add
value, conversion to find products
Downstream: All activities in distribution
and delivery to end customers
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Complex-nonlinear Supply
Chain
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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)
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More difficulties
Virtual companies do not have logistics
infrastructures
One company is a member of several
supply chain
Conventional warehouses are too
expensive
Need automatic warehouses with robots
as pickers
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Preliminary Activities
Understand the supply chain (flow charts)
Study internal and external parts
Performance measurement are a must
(Benchmarking)
Multidimension performance analysis
a BPR may be needed
Peoples relationships are a must
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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
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Areas of Opportunities
(contd)
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Using Inventories
An insurance against stock out
Can be in several places
Can be excessive
Can be insufficient
Example: Littlewoods stores; UK
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Proper SCN
Coordination is needed
Understanding of the causes/problems
Information flow is a key
Communication is important
IT is needed
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IT as problem solver
Supply Chain
Problem
IT solution
Linear sequence of
processing too slow
Waiting times between
chain segments
excessive
Existence of non-valued
added activities
Slow delivery of paper
documents
Repeat process activities
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IT solutions
Automate order taking
Use EDI/Internet
Web based ordering; intelligent agents
Electronic payments
Make-to-order (JIT)
Tracking systems
Supplier monitor and manage inventories
Information from POS to suppliers
Electronic trading markets and exchanges
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Electronic trading
markets/exchanges
One company with many suppliers
(catalogs, auctions)
One company with many buyers (RFQ)
Exchanges controlled by few large
companies (e.g. ANX)
3rd party managed exchanges
Vertical vs. Horizontal portals
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Non-supply Chain
Partnerships
Starbucks: Coffee to retailers, customers
Needed fast service; less expensive
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Software Support
SCM activities
Type of software
Upstream activities
Suppliers management,
ordering systems, order
tracking systems
Internal supply chain - Inventory management
activities
- Purchasing and order
management
- Budgeting, cost control
- Human resources information
Downstream
Saleperson productivity tools,
activities
online telemarketing, ad.
Management etc.
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Integration-Benefits
Automation of segments useful, but
Tangible benefits
Inventory reduction, personnel reduction,
productivity improvement, order management
improvement, financial cycle improvements.
Intangible benefits
Information visibility, new / improved processes,
customer responsiveness, standardization,
flexibility, globalization, and business
performance.
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Areas of Integration
Order taking - production inventory levels
Payment info in B2B - Visa, Master Card, etc.
Low inventory levels - automatic ordering
Order to manufacturing - generate a list of
needed resources & their availability
Changes in an order - transmit to suppliers
and their suppliers
Tracking systems - available to customers
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Evolution of Software
Integration
Completely Independent of each other
MRP= Material Requirements Planning:
Inventory, production
MRPII=Manufacturing Requirements
Planning
more integrated, MRP+Finance+labor
Enterprise Resource
Planning (ERP)
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
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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ASP
Leasing information systems application
Back to the days of time sharing
A risk prevention strategy
Very popular with ERP (expensive,
cumbersome)
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