12 Order Fulfillment Along the Supply Chain

SECTION 12.3 REVIEW QUESTIONS

1. 
   List the various order-taking solutions.
   
2. 
   List solutions for improved delivery.
   
3. 
   Describe same-day shipments.
   
4. 
   Describe some innovative e-strategies for order fulfillment.
   
5. 
   Describe how to effectively manage the return of items.
   
6. 
   Describe issues in B2B fulfillment.
   
7. 
   List three outcomes of tomorrow’s supply chain.
   

2. RFID AND CPFR AS KEY ENABLERS IN SUPPLY CHAIN MANAGEMENT

Two major technologies were found effective for improving and reducing problems along the end- to-end supply chains: RFID and CPFR.

The Essentials of RFID

Radio frequency identification (RFID) is a tag technology in which RFID (electronic) tags are attached to or embedded in objects (included people) and employ wireless radio waves to com- municate with RFID readers so that the objects can be identified, located, or can transmit data. Tags are similar to barcodes, but they contain
much more information. Also, they can be read from a longer distance (up to 50 feet).
Theoretically, RFID can be utilized and read in many places along the supply chain, as illus- trated in Figure 12.3. Over the long run, RFID tags will be attached to most items flowing through the supply chain and tracked and moni- tored at most of the places depicted in Figure 12.3. To date, cost has been a major inhibitor to the uptake of RFID technology. However, costs are coming down to the point where companies will be willing to invest in RFID because they can be more certain of achieving an ROI on their RFID investments. Even if costs were reasonable, organizations still need to learn how to effectively use RFID technologies with their back-office systems and how to redesign and retool their business pro- cesses so they can accrue solid business benefits from these technologies.
Given these developments, what effect will RFID have on supply chains? Let’s look at Figure 12.4, which shows the relationship between a retailer (Walmart), a manufacturer (such as P&G), and P&G’s suppliers. Note that the tags are read as merchandise travels from the supplier to the retailer (steps 1 and 2). The RFID transmits real-time information on the location of the merchandise. Steps 3 through 6 show the use of the RFID at the retailer, mainly to confirm arrivals (step 3) and to locate merchandise inside the company, control inventory, prevent theft, and expedite processing of relevant information (steps 4 through 6). It is no longer necessary to count inventories, and all business partners are able to view inventory information in real time. This transparency can go several tiers down the supply chain. Additional applications, such as rapid checkout, which eliminates the need to scan each item, will be provided by RFID in the future. According to Reyes (2011), RFID can help improve supply chain visibility, asset visibility and capital goods tracking, returnable asset track- ing, work-in-process tracking, as well as manag- ing internal supply chains. Examples of several
applications are presented next.

4. 
   
   RFID and CPFR as Key Enablers in Supply Chain Management 581
   

Figure 12.3 Digital supply chains (Source: Intel, “Building the Digital Supply Chain: An Intel Perspective.” Intel Solutions White Paper, January 2005, Figure 5, p. 9. Reprinted with permission from Intel Corporation)