12 Order Fulfillment Along the Supply Chain

12
Order Fulfillment Along the Supply Chain

Contents

Opening Case: How Amazon.com
Fulfills Orders 561

1. 
   Order Fulfillment and Logistics:
   

An Overview 563

2. 
   Problems in Order Fulfillment
   

Along Supply Chain 567

3. 
   Solutions to Order Fulfillment
   

Problems Along the Supply Chain 569

4. 
   RFID and CPFR as Key Enablers
   

in Supply Chain Management 580

5. 
   Other E-Commerce Support Services 585
   

Managerial Issues 588
Closing Case: Multichannel Retailers – Experiences
of Nordstrom and REI 592


Electronic supplementary material The online version of this chapter (doi: 10.1007/978-3-319-10091-3_12) contains supplementary material, which is available to authorized users

Learning Objectives

Upon completion of this chapter, you will be able to:

1. 
   Define EC order fulfillment and describe the EC order fulfillment process.
   
2. 
   Describe the major problems of EC order fulfillment.
   
3. 
   Describe various solutions to EC order fulfillment problems.
   
4. 
   Describe RFID supply chain applications.
   
5. 
   Describe collaborative planning and the CPFR model.
   
6. 
   Describe other EC support services.
   
7. 
   Discuss the drivers of outsourcing support services.
   

OPENING CASE: HOW AMAZON. COM FULFILLS ORDERS

THE PROBLEM


With traditional retailing, customers go to a phys- ical store and purchase items that they then take home. Large quantities are delivered to each store or supermarket; there are not too many delivery destinations. With e-tailing, customers want the goods quickly and to have them shipped to their homes. Deliveries of small quantities need to go to a large number of destinations. Also, items

E. Turban et al., Electronic Commerce: A Managerial and Social Networks Perspective, Springer Texts in Business and Economics, DOI 10.1007/978-3-319-10091-3_12,
© Springer International Publishing Switzerland 2015
561

must be available for immediate delivery. Therefore, maintaining an inventory of items becomes critical. Maintaining inventory and shipping products costs money and takes time, which may negate some of the advantages of e-tailing. Let’s see how Amazon.com, the “king” of e-tailing, handles the situation.
Amazon started with “virtual retailing” as a business model – no warehouses, no inventory, and no shipments. The idea was to take orders and receive payments electronically and then let others fill the orders. It soon became clear that this model, although appropriate for a small company, would not work for the world’s largest e-tailer.