How Cutting-Edge Companies Bridge the Critical Last Mile into Customers' Homes
Overview
Don't break the supply chain before you get to the most important link
-- the customer.
"Why have so many "e-commerce? companies failed in the last few years?
In many cases, it's the failure to figure out how to extend the supply
chain directly to customers that keeps a company from succeeding. Using
cutting-edge delivery practices and technology-based order processing,
companies can minimize costs, customize their products, provide
increased service and convenience, and increase customer loyalty—all
leading to a more robust bottom line.
Extending the Supply Chain examines in-depth some of the most
high-profile practitioners of telephone and Internet-based order
processing and fulfillment. The authors bring you detailed looks at:
Amazon, Dell, and FreshDirect, which use the decoupled extended supply
chain model to take custom-assembled or custom-packaged orders from an
assembly plant or distribution center to the delivery destination using
third-party delivery specialists like FedEx and UPS.
The semi-extended supply chain model used at companies like Lowes Foods
and Best Buy involves processing orders over the Internet or phone and
packing the customer's order at their chosen local retail outlet for
pick-up at the customer's convenience. This strategy is often the most
economical for brick-and-mortar retailers, since it primarily involves
the use of existing physical assets and personnel.
The fully extended supply chain is more cost-intensive, but may be the
most customer-centric option. Orders are picked and packaged not at
central locations, but at local stores, then delivered to the customer's
home, improving on the old-fashioned "delivery boy? that local grocers
employed a century ago. Online retailers such as Albertson's and Tesco
have developed a base of customers who will pay for the convenience and
level of service that are the hallmarks of the fully extended model.
The centralized extended supply chain employs regional distribution
centers instead of local stores, but is still able to provide more
personalized delivery service (including pre-specified delivery times)
than the decoupled model. An in-depth study of Office Depot, the
third-largest online retailer (which has stores but does most
fulfillment of Internet orders through its regional DCs) shows just how
effective this model can be when customers require elements of speed,
service, and cost control.
Extending the Supply Chain features dozens of clear examples, charts and
graphs, and practical tools to help you establish and maintain a
dynamic, customer-focused fulfillment operation, and offers proactive
strategies for seamlessly integrating marketing and technology
initiatives into your supply chain strategy. Examine the four models,
and the authors' recommendations for adapting and implementing each one,
to determine which one will help your supply chain stretch all the way
to its only acceptable destination—the home of a happy and loyal
customer."
About the Author
Kenneth Karel Boyer is an associate professor of operations management
at Michigan State University. Markham T. Frohlich is on the operations
and technology management faculty at Boston University, and was
previously at London Business School. G. Tomas M. Hult is an associate
professor of marketing and director of the Center for International
Business Education and Research at Michigan State University.
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Table of Contents
"Foreword
Preface
Part I: Introduction
1.The Great Divide Between Customers and Retailers
Part II: Strategies
2. De-Coupled Supply Chains
3. Partially Extended Supply Chains
4. Fully Extended Supply Chains
5. Centralized Extended Supply Chains
Part III: Transforming the Supply Chain
6. Strategy Meshing Operational and Marketing Goals
7: Marketing Tapping Customers' Latent Desires
8: Supply Chain Design How to Bridge the Last Mile
9: Information Technology Facilitating Learning and Streamlining
Transactions
10. The Future of the Extended Supply Chain"
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