12 Order Fulfillment Along the Supply Chain

the logistics of delivery. With this option, returns are shipped to an independent returns unit and are handled separately. This solution may be more efficient from the seller’s point of view, but it does not ease the returns process for the buyer.

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  Completely outsource returns. Several outsourcers, including UPS and FedEx, provide logistics services for returns. The services deal not only with delivery and returns but also with the entire logistics process. FedEx, for example, offers several options for returning goods.
  
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  Allow the customer to physically drop the returned item at a collection station or a physical store of the same vendor.
  

For strategy, guidelines, and other information on returns, see The Reverse Logistics Executive Council (rlec.org).

Order Fulfillment in B2B

According to recent forecasts by Forrester Research (reported by Sheldon and Hoar 2013), online revenues for B2B EC in 2013 were sub- stantially higher than online revenues for B2C EC. The figures were close to $570 billion versus

$250 billion, respectively. In spite of the sizeable difference, B2B EC is far less developed than B2C EC. The differences are found not only in the front-end experience but also in the back- office functionality including information man- agement, Web content management and order management.
Some of the major differences in order management capabilities were pinpointed in another survey sponsored in 2013 by Honeywell and conducted by Peerless Research Group (2013) for Logistics Management and Supply Chain Management Review. Based on responses from 469 supply chain managers most of whom were responsible for either B2B or a combination of B2B and B2C EC systems across a range of industries, the survey revealed that:

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  The most important missions for their systems were increasing the volume and speed of ful- fillment while reducing costs per order, increasing profitability, and improving cus- tomer service.
  
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  Many of the inefficiencies and increased costs in order fulfillment were due to increased transportation, packaging, and materials costs.
  
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  The keys to addressing the inefficiencies and costs rest with improved supply chain software applications, re-engineered (fulfill- ment) operations, and adoption of supply chain analytics.
  

B2B fulfillment tends to be more inefficient than B2C because it usually more complex. Typically, the shipments are larger, there are mul- tiple distribution channels, the shipment fre- quency is more varied, the breadth of the carrier services is more uneven, there are fewer EC car- rier offerings, and the EC transaction paths are much more complicated. The types of improve- ments in applications and re-engineering of processes needed to resolve these sorts of com- plications revolve around the automation of physical systems, as well as the use of business process management (BPM) software to auto- mate processes.

Using E-Marketplaces and Exchanges to Ease Order Fulfillment Problems