V300-06log.notes.lec6

E-Designing the Logistics, Service & Commit Process Execution: 

E-Designing the Logistics, Service & Commit Process Execution ACQUIRE DELIVER SUPPORT COMMIT CONVERT logistics after sales service PLAN DESIGN TACTICS / BEST PRACTICES production Order management 1.0 2.0 3.0 4.0 5.0 Inbound/Outbound Import/Export Private/Hired Select Carriers Schedule Load/Track/Unload Payment/Claims Locations Receive Put Away Store Assemble Order Prep. Ship Service Levels Targets (turns, etc.) Stock Status Accountability Costing Budgeting Hiring Training Evaluating Rewarding Transportation Warehousing Inventory Control Administration SUBPROCESSES: Activities: 3.1 3.2 3.3 3.4 procurement E X E C U T I O N M A N A G E M E N T Create Solutions Create Demand

DEFINITIONS: 

DEFINITIONS LOGISTICS - movement and storage of raw, in-process, and finished materials to support operating requirements DISTRIBUTION (outbound logiatics)- delivery of finished materials to customers MATERIALS (inbound logistics)- movement of raw material from suppliers to customers

e-Fulfillment Challenges: 

e- Fulfillment Challenges e-Tailing Problems Late delivery …….. 56% Credit security …… 50% Out-of-stocks ……. 38% B2B/B2C Problems Global distribution . 38% High cost………… 35% Capacity …..…….. 30% Returns ………….. 30% Cycle time ………. 25% Visibility ………… 25% Forecasting ………. 15%

Distribution Channel Options: 

Distribution Channel Options 1 . Current Retail/distribution Centers: Sears 2. Dedicated Distribution center: Amazon.com 3. Outsourced Fulfillment: Wal-Mart (Fingerhut), Submitorder, shipit, NextDay, asd, Kozmo (.com) 4. Drop-Ship/Merge-in-transit: Cisco Systems 5. Store Shipment: Levi Strauss 6. Flow-Through Fulfillment: WebVan

e-Tailing Example: Amazon.com : 

e-Tailing Example: Amazon.com Suppliers ship to 7 distribution centers (DC) DCs owned and managed by Amazon Orders picked at appropriate DC Carriers notified of pick-up Shipment loaded to carrier (UPS, FedEx, etc.) Failed at supplier/distributor direct (stockouts) Future: flow-thru/supplier direct to reduce inventory and outsourced operations?

TRANS- PORT: 

TRANS- PORT YEAR INVEN- TORY * ADMIN TOTAL %GDP * = includes holding cost and warehousing Source: Cass Logistics US Logistics Cost ($Bill)

Transportation e-volution : 

Transportation e-volution I. Near Term: Shipper to Carrier transactions Extranet connections to carriers for order submission, rates, track & trace, invoice & payment VICS.org, logistics.com II. Medium Term: Shipper to Exchange links Internet connections to transportation exchanges nattransport (US truck), GoCargo (water), GFX (air ).com III. Long Term: Exchange to Exchange collaboration Portal connections to virtual “4PLs” for optimization suites Capstan, electroneconomy, celarix-iSuite (.com)

Distribution Center Operations: 

Distribution Center Operations Receiving Put-Away Prepackaging Storage Packaging Pricing Order Picking Sortation and Accumulation Packaging and Shipping Source: PROFITABLE LOGISTICS MANAGEMENT, Firth

Landed Cost Calculation: 

Landed Cost Calculation Total Cost Factors Packaging Transportation per piece or cwt & surcharges? Customs, insurance, taxes Foreign trade zones (FTZ) & Duty Drawbacks Warehousing/Distribution Center (DC) Inventory Holding Cost Stockout Penalty (short term & annuity) Returns/Recycle Product & Packaging

Distribution Project Assessment: 

Distribution Project Assessment Is the process centralized or decentralized and is there a single point of contact (SPOC) for customers How are transportation needs planned & executed? How is the performance of logistics measured? Are there warehouses? If so, how do they add value? Is there inventory? If so, how does it add value and is inventory holding cost included in logistics analysis? How do they conduct international logistics? Are they using any transportation/logistics exchanges Is total systems costing being used for analysis?

Support Project Assessment: After Sales Service Operations: 

Support Project Assessment: After Sales Service Operations What follow-up takes place? How does a customer monitor their order? How are ‘A’ customers identified? What is done for them? What value-added services are provided? How is e-biz tech used to deliver this service?? How is customer satisfaction determined? Is this a profit center or a cost center? What customer contacts are provided?

Support Project Assessment: Reverse Logistics Operations: 

Support Project Assessment: Reverse Logistics Operations Is return pre-authorized w/reason? Is disposition determined before pick-up? If condition is unknown, can it be tested? Is it scheduled for salvage/scrap immediately? Does the refurbish schedule have priorities? Are correct labels applied to used products? Does product to come to rest anywhere? Are total returns being diminished?

Order Commitment Assessment Issues: 

Order Commitment Assessment Issues Perfect Order Dependable Order Cycle Time Schedule Technology: Sales Automation, On Line Systems, EDI, CTI Centralized vs Decentralized SPOC for Order Status & Customer Info. Commitment-Based/Profit Determinable