12 Order Fulfillment Along the Supply Chain

Collaborative planning and CPFR. Collaborative planning concentrates on joint demand forecasting and on accurate resource and activity planning along the supply chain. Collaborative planning tries to synchronize partners’ activities. CPFR is a business strat- egy that attempts to develop standard protocols and procedures for collaboration. Its goal is to improve demand forecasting by collaborative planning in order to ensure delivery of materi- als when needed. In practice there are a num- ber of successful implementations, although there is not wide spread use. Recently, VICS has focused on another collaborative process – store-level DPR – which provides detailed demand forecasts used to calculate inventory and distribution requirements from sourcing to the retail shelf or channel.

Other support services. EC support services include consulting services, directory ser- vices, infrastructure providers, and many more. One cannot practice EC without some of them. These support services need to be coordinated and integrated. Some of them can be done in-house; others must be outsourced.

7. 
   Outsourcing EC services. Selective out- sourcing of EC services usually is a must. Lack of resources, time and expertise forces companies of all sizes to outsource, despite the risks of doing so. Using ASPs is a viable alternative, but they are neither inexpensive nor risk-free.
   

Key Terms

Collaborative planning, forecasting, and replenishment (CPFR)

Distribution Resource Planning (DRP) E-logistics
Logistics
Merge-in-transit Order fulfillment
Radio frequency identification (RFID) Reverse logistics
Third-party logistics suppliers (3PL) Visibility
Warehouse management system (WMS)


Discussion Questions

1. 
   Discuss the problem of reverse logistics in EC. What types of companies may suffer the most from this problem?
   
2. 
   Explain why UPS views itself as a “technol- ogy company with trucks” rather than as a “trucking company with technology.”
   
3. 
   Under what situations might the outsourcing of EC services not be desirable?
   
4. 
   UPS and other logistics companies also pro- vide financial services. What does this mean and what is the logic behind this?
   
5. 
   Differentiate order fulfillment in B2C from that of B2B.
   
6. 
   Discuss the motivation of suppliers to improve the supply chain to customers.
   
7. 
   Describe the advantages of RFID over a regular bar code in light of supply chain management.
   
8. 
   Discuss how CPFR can lead to more accu- rate forecasting and how it can resolve the bullwhip effect.
   
9. 
   Describe the importance of providing a sin- gle demand forecast for improving control along the entire supply chain.
   
10. 
    Investigate and discuss how artificial intelli- gence can be used to pick and pack orders faster and more accurately. Begin with McGown (2010).