12 Order Fulfillment Along the Supply Chain

SECTION 12.5 REVIEW QUESTIONS

1. 
   Describe the role of EC consultants and list their major types.
   
2. 
   Describe the value offered by directory ser- vices. Provide three examples of what value they add.
   

3. 
   Explain why specialized search engines are needed.
   
4. 
   List some other EC support services.
   
5. 
   List the major reasons why companies out- source EC support services.
   

MANAGERIAL ISSUES

Some managerial issues related to this chapter are as follows.

1. 
   If you are an EC vendor, what is the bottle- neck in the order fulfillment process? Order fulfillment is an important task, especially for e-tailers. The problem is not only the physical shipment but also the efficient execution of the entire order fulfillment process, which may be complex along a lengthy supply chain. To enhance the order fulfillment process, the vendor needs to identify the bottleneck that needs improvement. Potential issues are delayed delivery date, high return rate, high inventory cost, high shipping cost, and poor integration along the supply and demand chains. The EC vendor should identify its own problem first.
   
2. 
   For which items should we keep our own inventory? As Amazon.com has experienced, online vendors try to avoid keeping inventory because it is expensive. However, we should not neglect the fact that retailing with appro- priate inventory is a source of extra profit as well. In addition, for certain items, it is not possible to assure on-time delivery without having controllable inventory; the no-inven- tory policy is not always the best policy. A company has to design the portfolio plan of inventory and distribution centers for the items that have a positive effect of having inventory. A CPFR program may be adopted to minimize the burden of holding inventories. The plan for distribution centers must be bal- anced with the plan of outsourced items through partners.
   
3.