12 Order Fulfillment Along the Supply Chain

Changing the Structure and Process of the Supply Chain

An efficient solution to many supply chain prob- lems is to change the supply chain structure from a linear to a hub structure as illustrated in

Figure 12.2. Notice that in a hub structure connection between supply chain partners and elements is much shorter. Also coordination and control is done at the center of the hub, making the management more efficient, and the structure increases visibility. Long supply chains are usu- ally more amenable to problems. Also, the hub structure management is usually fully digital, making order fulfillment faster, less expensive, and less problematic.

Speeding Deliveries: From Same Day to a Few Minutes

As discussed earlier, a major success factor in EC is the speed within which shoppers receive their orders. And indeed the competition on fast deliv- ery is intensifying.

Fed-Ex initiated the concept of “next day” delivery in 1973. It was a revolution in door-to- door logistics. A few years later, FedEx, intro- duced its “next-morning delivery” service. In the digital age, however, even the next morning may not be fast enough. Today, we talk about same- day delivery and even delivery within an hour. Deliveries of urgent materials to and from hospi- tals, shipping auto parts to car service shops, and delivering medicine to patients are additional examples of such a service. The opening case to this chapter described Amazon.com’s recent implementation of their “same-day” delivery ser- vice. Two other newcomers to this area are eFul- fillment Service (efulfillmentservice.com) and OneWorld Direct (owd.com). These companies have created networks for the rapid distribution of products, mostly EC-related ones. They offer national distribution systems across the United States in collaboration with shipping companies, such as FedEx and UPS.
Delivering groceries is another area where speed
is important, as discussed in Chapter 3. Quick pizza deliveries have been available for a long time (e.g., Domino’s Pizza). Today, many pizza orders can be placed online. Also, many restaurants deliver food to customers who order online, a service called “dine online.” Examples of this service can be found at gourmetdinnerservice.com.au.

Figure 12.2 Changes in the supply chain

Some companies even offer aggregating supply services, processing orders from several restau- rants and then making deliveries (e.g., dialadin- ner.com.hk in Hong Kong).
Supermarket deliveries are often done same day. Arranging and coordinating such deliver- ies may be difficult, especially when fresh or
perishable food is to be transported. Buyers may need to be home at certain times to accept the deliveries.

Delivery by Drones

Ideally, e-tailers want to deliver faster than you can get products by going to a store and buying

then. The futuristic solution is delivery of packages by drones in minutes. A dream? Amazon.com believes that the dream will come true in 2015. However, this may take much lon- ger due to legal, technological (sensors’ capabili- ties) and other constraints, see Black (2014).