Logistics and / or Fulfillment Models Many traditional catalog companies already had an LFM System in place when they adopted e-business model. Catalogers’ telephone based fulfillment systems, originally designed to accommodate individual customer, were ideally suited to e-commerce. Catalog retailers have lowest backorder rate. E-business has taken a different route generally followed in distribution channels. GM is plotting web site to sell cars & others also. Internet accelerates pace of change Online market places for small to onidsize e-business Logistic/pp2/jv Logistic/pp2/jv

E-Market Place E market places are replacing the E-business Market place Technology Platform Engine Indirect Direct Arbs Aderxs Oracle i2 Industry Centric Exchanges Auto Foods Retail Chem E-tail B2B B2B market opportunity $1.4 trillion by 2003 2000 1000 500 0.03 0.02 .01 .00 .99 1500 Market Makers Vertical Verticullet Chemdex / Ventric MRO.Com Publishers Pro.Com Logistic/pp2/jv

E-Market Place might be implemented by A trade organization to aggregate its members’ orders from approved suppliers by providing online procurement services A new market maker that is trying to replace existing distribution channels by offering online information and services to a specific industry. A large distributor who seeks to automate processes among several buyers, suppliers or manufacturers A third party service providers who wants to create a common market place by providing hosted procurement services to a specific set of suppliers and their customers. Logistic/pp2/jv

E-Market Places Impact every element of the E-Business Supply Chain B2B E-tail Product Development Supplier Mgmt. Transport Whose & Inventory Mgt. Category Store Product Dev. Mgt. E-Procure- ment Software Supply Chain Mgt. Category Logistic/pp2/jv

Benefits of a Digital Marketplace Logistic/pp2/jv

It channels all potential customers to distributors B2B Sponsored Model Has a brochureware web site sporting a full product catalog online customer service It channels all potential customers to distributors Actual commerce takes place at distributor’s site. Shipment takes place from distributor Girard Equipment Inc. is an example Logistic/pp2/jv

Manufacturers Model Manufacturer’s adoption of a business allows it to provide virtual environment for demand management and logistical services It allows access to suppliers and customer to its production scheduling, manufacturing planning and forecasting data. A list of changes in demand are sent by e-mail to suppliers, manufacturing plans who in turn update reports Master production schedule is published on web site of customers Company reduced working capital by reducing inventory Response time should be fast Logistic/pp2/jv

Vendor Managed Inventory Model Vendor manages inventory Reduces company overheads Reduces costs throughout value chain E-business vendors track the number of products shipped to distributors and retail outlets VMI uses EDI technology, VANs Manufacturer’s have not integrated VMI with their internal ERP systems because software vendors have not built interfaces Logistic/pp2/jv

Extended Enterprise Model The Cisco solution fuzes entire value chain-partners, suppliers, manufacturers, distributors, retailers, customers and Cisco’s internal operations. Faster inventory turns and short cycle Improved customer satisfaction Flexibility in design, ramp Ability to sustain product quality Reduced inventory by 45% Logistic/pp2/jv

Common Order fulfillment and manufacturing challenges Demand Information Customer Orders, Specs Market Research Competitive Information Customer feedback Regulatory Constraints, etc. Suppliers Planning Purchasing Scheduling Customer Service Manufacturing Process Distribution Customers WIP/FGI Status Material Receipts Shipment Sched. Lot/Reg. Tracking Quality Data Supplier’s ASNs Supply Information Inbound Supply Chain Logistics Internal Supply Chain Outbound Common Order fulfillment and manufacturing challenges Logistic/pp2/jv

Back end Systems Secure Transaction Engine Manufacturing Partners Customer Mfg. Order Support Entry Manufacturing Partners Company Intranet Secure Transaction Engine Employee Mfg.Info External Info. Internet Customer Extranet/ VPN Firewall Logistic/pp2/jv

Direct-Fulfillment Model 1. Materials flow from contract manufacturers. 2. They are connected by network to have same look of product 3. Third party logistics providers 4. Reduced inventories, labour costs and shipping expenses. 5. 97% of products ship on promised delivery date 6. 75% of orders by customers are placed online. 7. Reduces cycle time from 6-8 weeks to 1-3 weeks Logistic/pp2/jv

Direct-Fulfillment Model shifts some of the fulfillment duties to the manufacturer Customer Order Secure Transaction Engine E-business order Manufacturer Delivery Logistic/pp2/jv

E-Tail Model E-tail business necessitates easy to use catalog and shopping cart that enables customers to brouser for products, choose products and Click by a button Integrate warehouse, inventory to perform fulfillment function Automated shipping, real time tracking of the package Disappointments on e-tail sites a) Product received was not exactly what they thought. b) E-tailer has not made aware of total price when order is placed c) Product delivery was late d) E-tailer’s return policy and service commitments are not met. Logistic/pp2/jv

Product / Service Development Management Supply Chain Demand Chain Customers Supply Plan Demand Real Time Order Mgt. Direct Personalised Sales B2B E-Tail Business Strategy Suppliers Partners Product / Service Development Management Electronic Commerce E-Business Enablement Knowledge Management and Business Procurement Scheduling Distribution Logistics Customer Service Chain Management Enterprise Resource Logistic/pp2/jv

Model of the Future E-business will be part of organizations business All e-business will be multichannel distributions Website is an extension of office Moving customers to the internet from catalog and shop by phone orders reduces expenses It can create a unified pricing and promotion e-business will be built on newer technologies Bluelight.com Internet operation has 4 million customers Drivers for repeat business are : a) Ensuring secure transactions b) Having bricks and mortar stores in which to view products c) Making it easy to return goods Logistic/pp2/jv

Multi Channel e-business Model Suppliers Customer e-tail Brick Kiosk Catalogue Bricks & Mortars Logistic/pp2/jv