1. 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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3. Major Concepts
Order fulfillment: Deliver right order on time
Front office operations:
Order taking
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CRM
Back office operations
Accounting
Finance
Inventory
Packaging
Logistics
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4. Major Concepts (cont.)
Definitions of logistics:
Managing the flow of goods, information and
money along the supply chain
Aspect of military science dealing with
procurement, maintenance, and transportation
Management of details of an operation
All activities involved in management of product
movement
Right product
Right place
Right time
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5. The Steps of Order Fulfillment
1. Payment Clearance
2. In-stock availability
3. Packaging, shipment
4. Insuring
5. Production (planning,
execution)
6. Plant services
7. Purchasing,
warehousing
8. Customer contacts
9. Returns (Reverse
logistics)
10. Demand forecast
11. Accounting, billing
12. Reverse logistics
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6. Supply Chain Management
Definition: Flow of
material, information,
money, etc. from raw
material suppliers
through factories to
customers
It includes:
organizations,
procedures, people
SCM: Integration of
the business
processes along the
chain, Planning,
Organizing, control of
many activities
Activities: Purchasing,
delivery, packaging,
checking,
warehousing, etc.
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7. 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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8. 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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9. 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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10. Areas of Opportunities (cont.)
Invoicing, auditing
and other accounting
activities
Collaboration
procedures with
partners
Employee training
and deployments
Labor scheduling
Use of teams and
empowerment of
employees
Automation of
processes
Use of software for
facilitating all the
above
Inventory
management and
control
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11. Using Inventories
Insurance against stock out
Can be in several places
Can be excessive
Can be insufficient
Example: Littlewoods stores; UK
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12. Using Inventories
Using inventories to solve supply chain
shortages:
Building inventories as insurance against
uncertainty—products and parts flow smoothly
Very difficult to correctly determine inventory levels
for each product and part
Customized finished products can only stock
components
Excessive levels are costly to store
Insufficient levels cannot protect against high
demand or slow delivery times
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13. 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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14. EC Solutions Along
the Supply Chain (cont.)
Digitization of
products—instant
order fulfillment
Back-office interface
Shortens cycle
time
Eliminates errors
Collaborative commerce
among members of the
supply chain
Shortens cycle time
Minimizes delays
and work
interruptions
Lower inventories
Lower
administrative costs
livery scheduling
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15. Software Support
SCM Tracking
Activities
Type - available
systemsof Software to customers
Upstream activities
Supplier management
Ordering systems
Internal supply
chain activities
Order tracking systems
Inventory management
Purchasing order management
Downstream
activities
Budgeting, cost control
Human resource information
Salesperson productivity tools
Online telemarketing
Ad management etc.
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16. ERP Benefits
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
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17. ERP Implementation
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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