Chapter 13 : Order Fulfillment, Logistics, and Supply Chain Management
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Transcript of Chapter 13 : Order Fulfillment, Logistics, and Supply Chain Management
7/30/2019 Chapter 13 : Order Fulfillment, Logistics, and Supply Chain Management
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1
Chapter 13
Order Fulfillment,
Logistics, andSupply Chain Management
www.prestonians.webnode.com
7/30/2019 Chapter 13 : Order Fulfillment, Logistics, and Supply Chain Management
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2
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 Packaging
Finance Logistics
Inventory
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Major Concepts (cont.)
Definitions of logistics:Managing the flow of goods, information andmoney along the supply chain
Aspect of military science dealing withprocurement, maintenance, and transportation
Management of details of an operation
All activities involved in management of product
movementRight product
Right place
Right time
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The Steps of Order Fulfillment
1. Payment Clearance
2. In-stock availability
3. Packaging, shipment4. Insuring
5. Production (planning,execution)
6. Plant services
7. Purchasing,warehousing
8. Customer contacts9. Returns (Reverse
logistics)
10. Demand forecast
11. Accounting, billing
12. Reverse logistics
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Supply Chain Management
Definition: Flow of material, information,money, etc. from rawmaterial suppliersthrough factories tocustomers
It includes:organizations,procedures, people
SCM: Integration of the businessprocesses along the
chain, Planning,Organizing, control of many activities
Activities: Purchasing,
delivery, packaging,checking,warehousing, etc.
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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 (eversurvival)
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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
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Areas of Opportunities
Manufacturingprocesses
Warehousingoperation
Packaging anddelivery
Materialinspection/receiving
Inbound andoutboundtransportation
Reverse logistics(return)
In-plant materialhandling
Vendor managementprogram
Customer orderprocessing
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Areas of Opportunities (cont.)
Invoicing, auditingand other accountingactivities
Collaborationprocedures withpartners
Employee training anddeployments
Labor scheduling
Use of teams andempowerment of employees
Automation of processes
Use of software forfacilitating all the
aboveInventorymanagement andcontrol
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Using Inventories
Insurance against stock out
Can be in several placesCan be excessive
Can be insufficient
Example: Littlewoods stores; UK
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Using Inventories
Using inventories to solve supply chainshortages:
Building inventories as insurance against
uncertainty —
products and parts flow smoothly Very difficult to correctly determine inventory levelsfor each product and part
Customized finished products can only stock
componentsExcessive levels are costly to store
Insufficient levels cannot protect against highdemand or slow delivery times
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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
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EC Solutions Along
the Supply Chain (cont.)
Digitization of products —instantorder fulfillment
Back-office interface
Shortens cycletime
Eliminates errors
Collaborative commerceamong members of thesupply chain
Shortens cycle time
Minimizes delays andwork interruptions
Lower inventoriesLower administrativecosts
livery scheduling
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Software Support
SCM Activities Type of Software
Upstream activities Supplier management
Ordering systemsOrder tracking systems
Internal supplychain activities
Inventory management
Purchasing order management
Budgeting, cost control
Human resource information
Downstreamactivities
Salesperson productivity tools
Online telemarketing
Ad management etc.
Tracking systems - available to customers
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ERP Benefits
ERP = Integrating business processes and
activities in real timeSolves 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
systemManages all routine transactions in theenterprise
Recently extended to suppliers andcustomers
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