Supply Chain Management Summit 2013 - "Distributed Supply Chain Management"
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Transcript of Supply Chain Management Summit 2013 - "Distributed Supply Chain Management"
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®
Supply Chain Management Summit 2013 | 8.22.2013
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Distributed Supply Chain Management
Presented by Paul Brisson Senior Product Manager [email protected] 518.810.0700 x3912
Grow Your Business & Improve Customer Satisfaction through a Distributed Supply Chain of Drop-Ship & Third Party Logistics
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Who are we?
Strategy / Planning
Informa2on Technology Buying/Selling
Logis2cs Materials / Produc2on
Customer Experience
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Why are we here today?
SCMS 2013
Learn
Connect
Grow
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Learn… § Key principles of utilizing a distributed supply chain
management program with drop-ship & third-party
logistics (3PL)
How do we accomplish it?
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Connect… § Get First Hand Knowledge on the Subject
ü Share real life experiences
ü Discuss what has / has not worked well in the past
ü Swap contact information & continue the
conversation
How do we accomplish it?
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Grow…. § Leave with the Confidence to Evaluate a Distributed
Supply Chain Management Program Which Works
Best for You
How do we accomplish it?
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• The Apple Farmer…
Tradi/onal Supply Chain
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The Local Apple Farm Stand
Grow the Apples at the Farm
Sell the Apples at the Farm
Harvest the Apples at the Farm
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Apple Farmer at Farmers Market
Grow the Apples at the Farm
Sell Apples at Local Farmers Market
Harvest the Apples at the Farm
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Apples at Grocery Store Chain
1. Farmer Grows the Apples
5. Grocery Store Markets Apples in their Stores
2. Harvest & Package Apples at the Farm
3. Farmer Sells Apples to Grocery Chain
4. Grocery Chain Distributes to Stores
6. Customer Purchases Apples
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Local Apple Farm – Farmer Owns Entire Product Life-Cycle – No Outside Involvement – Most Profitable Marketing Outlet for Farmer – Limited Exposure to Customers
Apple Farmer at Farmers Market
– Farmer Owns Product Management & Distribution – Market & Farmer Responsible for Marketing – Additional Overhead for Market Fees & Distribution Costs – Limited Outside Involvement & Exposure to Customers
Apples at Grocery Store Chain
– Farmer Owns Product Management & Wholesale Distribution – Grocery Store Responsible for Retail Distribution & Marketing – Decreased Profit Margin for all parties involved / Increased Customer Costs – Extensive Outside Involvement & Exposure to Customers
Supply Chain & Control
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What if...Grocery Store Chain could – Connect with Local Farmers Across the region/country – Sells Apples on their Website – Routes Order to Farm Closest to Customer – Farmer Ships to Customer – Apples Arrive Fresh, Cost Effective, and Quickly
A New Approach…
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Drop-Ship Model – Farmer Owns Product Management & Distribu/on – Grocery Store Chain Responsible for Marke/ng – Well-‐Defined Outside Involvement – NEW…Most Profitable Marke/ng Outlet for Farmer & Store – Most Exposure to Customers
Apples Drop-Shipped to Customer
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Merchant – Markets & Sells Products to Customers
Customer – Orders Products From Merchant
Supplier [drop-shipper]
– Owns & Manages Inventory – Fulfills Orders on Behalf of Merchant – Invoices Merchant for Sale
Shipper
– Ships Orders on Behalf of Merchant/Supplier
What is Drop-Shipping Exactly?
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Merchant – Owns Inventory – Markets & Sells Products to Customers
Customer
– Orders Products From Merchant
3PL Provider [drop-shipper] – Manages Inventory – Fulfills Orders on Behalf of Merchant – Invoices Merchant for Services
Shipper
– Ships Orders on Behalf of Merchant/3PL
Third-Party Logistics Model (3PL)
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• Merchant • Supplier • Customer
The Three Perspectives
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The Merchant Perspec/ve
Drop-‐Ship
Pros – No Cost Product Expansion – Focus on Customer Experience – Limited Logistics Mgt. – New Opportunities to Grow
Cons – Partner Compliance Mgt. – More Suppliers to Manage
3PL
Pros – Fewer Suppliers to Manage – Focus on Customer Experience – Limited Logistics Mgt. – Less Expensive than
warehouses
Cons – Upfront Inventory Costs – Partner Compliance Mgt. – New Challenges to Manage
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The Supplier Perspec/ve
Drop-‐Ship
Pros – Increased Exposure to
Marketplace – Increased Product Line Depth &
Buying Power – Limited Marketing Management – Many New Opportunities to Grow
Cons – Potentially Increased Inventory
Management Costs – Partner Compliance Programs – Diverse Operations to Manage – New Challenges to Manage
3PL (Not Applicable)
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• When Managed Well… The Experience is Better, Faster, and Cheaper
• When Managed Poorly… Poor Customer Experience = Bad Customer Reviews – Cancellations Due to Out of Stock – Returns for Poor Product Presentation – Customer Service Complaints for Late Shipments – Administrative Overhead for Program Outweighs Savings
The Customer Perspec/ve
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Drop-Ship Programs are of two varieties – Merchant Managed
• Merchant Connects Directly with Supplier • Merchant Manages Entire Order Life-Cycle
– Provider Managed
• Merchant Connects with Supplier via Provider • Provider Manages Information Delivery • Provider, Merchant, & Supplier Manage Order Life-Cycle
Two Flavors of Drop-Ship Programs…
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Types of Services Available – Rela/onship Management – Product Catalog Building – Inventory Management – Order Processing – Shipping Rules Management – Packing Slip Management – Invoicing Management – Service Level Management
Traditional Drop-Ship Services…
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CommerceHub www.commercehub.com
– Full Service Drop-Ship Provider
Dropship Commerce www.dropship.com
– Product, Inventory, & Order Management Provider
VendorNet www.vendornet.com
– Drop-Ship Management & eCommerce Solution Provider
Leading Drop-Ship Providers
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Banneker Industries http://www.banneker.com/
– Sponsors of Today’s Summit – Footprint in 6 States & MSBE
Exel America www.exel.com
– Global Coverage – 74,000 employees / 300 warehouses
Schenker USA www.schenkerusa.com
– Coverage: Europe, Asia, South America, Africa, North America – 36,000 employees / 405 warehouses
Kuehne & Nagel Logistics, Inc. www.kuehne-nagel.com
– Global Coverage – 19,000 employees / 50 warehouses
Leading 3PL Providers
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Understand Your Business Goals – Remember the Apple Farmer
Research Marketing Opportunities – Self-Managed Retail/Wholesale – Distributor Managed Wholesale – Drop-Ship & 3PL
Grow – Utilize a Distributed Supply Chain of Drop-Ship & 3PL
Key Next Steps…
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Thank you for Attending
Please feel free to send any questions. [email protected]
518.810.0700 x3912