12 Order Fulfillment Along the Supply Chain

SECTION 12.2 REVIEW QUESTIONS

1. 
   List some problems along the EC supply chain.
   
2. 
   Explain how uncertainties create order fulfill- ment problems. List some of these problems.
   
3. 
   What problems may exist in financial supply chains?
   
4. 
   Describe the role of 3PLs.
   
5. 
   Why is information sharing needed along the end-to-end supply chain?
   

2. SOLUTIONS TO ORDER FULFILLMENT PROBLEMS ALONG THE SUPPLY CHAIN

Many EC logistics problems are generic; they can be found in the non-Internet world as well. Therefore, many of the solutions that have been developed for these problems in brick-and-mortar

companies also work for e-tailers. IT and EC technologies facilitate most of these solutions. They also provide for automation of various operations along the supply chain that usually improve its operation. In this section, we will dis- cuss some of the specific solutions to EC order fulfillment problems along the supply chain.

Improvements in the Order-Taking Activity

One way to excel in order fulfillment is to improve the order-taking activity and its links to fulfillment and logistics. Order taking can be done via e-mail or on a webstore and it may be automated. For example, in B2B, orders can be generated and transmitted automatically to suppliers when inventory levels fall below a cer- tain threshold. It is a part of the vendor-managed inventory (VMI) strategy described in Chapter 5. The result is a fast, inexpensive, and more accu- rate (no need to rekey data) order-taking process. In B2C, Web-based ordering using electronic forms expedites the process, making it more accurate (e.g., automated processes can check the input data and provide instant feedback), and reduces processing costs for sellers. When EC order taking can interface or integrate with a company’s back-office system, it shortens cycle times and eliminates errors.

Order-taking improvements also can take
place within an organization, for example, when a manufacturer orders parts from its own ware- house. When delivery of such parts runs smoothly, it minimizes disruptions to the manufacturing process, reducing losses from downtime.