Sec 6.5 – Supply Chain Integration Savannah State University College of Business Administration Savannah, GA Esmira Gheisary Christian Teague China Thomas Ericc Baker Blessing Uba Ashton Henderson 1

Outline of Presentation  The Impact of the Internet on Supply Chain Strategies  What is E-Business  The Grocery Industry  Peapod’s Successful Innovations  The Book Industry  The Retail Industry  Impact on Transportation and Fulfillment 2

The Impact of the Internet on Supply Chain Management Electronic supply chain management: Combines the concepts of electronic business (e-business) and supply chain management (SCM), and depicts how trade channel members are working together to optimize resources and opportunities.  Benefits: - Reducing costs, improving service, enhancing customer satisfaction and retaining competitive advantage  Drawback: - Incorrect logistics strategies

The Grocery Industry In 1988, Prodigy, Peapod’s major competition ceased efforts due to its inability to attract a large subscriber base after three years. Supermarkets commonly utilize the push-based strategy Peapod’s innovative usage of a pure pull strategy – Tactical strategy proved to be inefficient Drawbacks Stock out rates Lack of control over transportation cost Response time Lack of Accountability between customers, Peapod Inc., and grocer Seemingly Inevitable failure among the food industry

The Grocery Industry Transitioned into a push pull strategy – Established warehouses – Peapod's online shelves are stocked with more than 12,000 products in variety of categories – Virtual stores will also be launched Free app on iPhones, iPads or Android phones

Peapod’s Successful Innovations Peapod is Socially responsible New Cell Phone Recycling (donated to Les Turner ALS Foundation) Green Delivery Window (Area specific) Electronic options for directions and customer updates Environmentally-friendly products communication The oldest and largest and most successful online grocery provider

What is E-Business E-Business (or electronic business) is the term used to describe using the internet to operate your business. B2C-Refers to businesses that are “direct to customer”. B2B –Refers to business conducted over the internet predominately between businesses. Can be used for collaboration with suppliers and vendors to achieve common goals.

What is E-Business Advantages of E-Business: Flexible business Hours-The Internet is available 24 hours a day, seven days a week, your business never closes. Eliminates Geographic Boundaries-As long as someone has an Internet connection, you can sell the product no matter where they live.

What is E-Business Disadvantages of E-Business: Viruses could mean losing the site or affecting your customers computers while on your website. There are still some people who don't think it is safe to buy on-line because of fraud. You may not receive what you believe you have purchased.

The Book Industry The book industry is an example on how the use of push and pull supply chains have evolved including the combination of both being used together. Amazon used a pull supply chain system only when the company first started but the company switched to a push-pull supply chain system after discovering issues with there supplier Ingram Book Group. Issues included: – not being able to meet service level goals – Reduced profit margins

The Book Industry Push Supply Chain – Products are manufactured or procured based on anticipated customer orders. – Also known as Built to Inventory or Built to Stock Pull Supply Chain – Products are manufactured or procured based on specific customer requests. – Also known as Built to Order.

The Retail Industry Late responding to competition and to recognize the opportunities provided by the internet Brick-and-Mortar – Adding internet components – Already have distributions and warehousing infrastructures Click-and-Mortar – Recognize the advantage over pure internet – Push-Pull strategy

Impact on Transportation and Fulfillment The Internet and the new supply chain paradigms introduce a shift in fulfillment strategies. E-fulfillment means that the supplier needs to handle many returns, each of which consists of a small shipment. Parcel shipping