supply chain management summit 2013 - "distributed supply chain management"
DESCRIPTION
Grow Your Business & Improve Customer Satisfaction through a Distributed Supply Chain of Drop-Ship & Third Party Logistics Learning Objectives - Understand the key components of a distributed supply chain utilizing a blend of drop-ship and third-party logistics, and what it means to your building your business - Learn how a distributed supply chain can reduce costs and improve customer service ratings through improved order fulfillment times and shorter deliveries. - Examine the strategies to select a drop-ship or third-party logistics program to meet your specific business needs - See firsthand how these strategies have transformed some of the largest retailers product offerings through virtual inventory and customer service ratings - Leave with the confidence to examine your business needs and with the knowledge of resources available to build your business through drop-shipping and third-party logistics strategiesTRANSCRIPT
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Supply Chain Management Summit 2013 | 8.22.2013
Distributed Supply Chain Management
Presented by Paul Brisson Senior Product Manager [email protected] 518.810.0700 x3912
Grow Your Business & Improve Customer Satisfaction through a Distributed Supply Chain of Drop-Ship & Third Party Logistics
Who are we?
Strategy / Planning
Informa2on Technology Buying/Selling
Logis2cs Materials / Produc2on
Customer Experience
Why are we here today?
SCMS 2013
Learn
Connect
Grow
Learn… § Key principles of utilizing a distributed supply chain
management program with drop-ship & third-party
logistics (3PL)
How do we accomplish it?
Connect… § Get First Hand Knowledge on the Subject
ü Share real life experiences
ü Discuss what has / has not worked well in the past
ü Swap contact information & continue the
conversation
How do we accomplish it?
Grow…. § Leave with the Confidence to Evaluate a Distributed
Supply Chain Management Program Which Works
Best for You
How do we accomplish it?
• The Apple Farmer…
Tradi/onal Supply Chain
The Local Apple Farm Stand
Grow the Apples at the Farm
Sell the Apples at the Farm
Harvest the Apples at the Farm
Apple Farmer at Farmers Market
Grow the Apples at the Farm
Sell Apples at Local Farmers Market
Harvest the Apples at the Farm
Apples at Grocery Store Chain
1. Farmer Grows the Apples
5. Grocery Store Markets Apples in their Stores
2. Harvest & Package Apples at the Farm
3. Farmer Sells Apples to Grocery Chain
4. Grocery Chain Distributes to Stores
6. Customer Purchases Apples
Local Apple Farm – Farmer Owns Entire Product Life-Cycle – No Outside Involvement – Most Profitable Marketing Outlet for Farmer – Limited Exposure to Customers
Apple Farmer at Farmers Market
– Farmer Owns Product Management & Distribution – Market & Farmer Responsible for Marketing – Additional Overhead for Market Fees & Distribution Costs – Limited Outside Involvement & Exposure to Customers
Apples at Grocery Store Chain
– Farmer Owns Product Management & Wholesale Distribution – Grocery Store Responsible for Retail Distribution & Marketing – Decreased Profit Margin for all parties involved / Increased Customer Costs – Extensive Outside Involvement & Exposure to Customers
Supply Chain & Control
What if...Grocery Store Chain could – Connect with Local Farmers Across the region/country – Sells Apples on their Website – Routes Order to Farm Closest to Customer – Farmer Ships to Customer – Apples Arrive Fresh, Cost Effective, and Quickly
A New Approach…
Drop-Ship Model – Farmer Owns Product Management & Distribu/on – Grocery Store Chain Responsible for Marke/ng – Well-‐Defined Outside Involvement – NEW…Most Profitable Marke/ng Outlet for Farmer & Store – Most Exposure to Customers
Apples Drop-Shipped to Customer
Merchant – Markets & Sells Products to Customers
Customer – Orders Products From Merchant
Supplier [drop-shipper]
– Owns & Manages Inventory – Fulfills Orders on Behalf of Merchant – Invoices Merchant for Sale
Shipper
– Ships Orders on Behalf of Merchant/Supplier
What is Drop-Shipping Exactly?
Merchant – Owns Inventory – Markets & Sells Products to Customers
Customer
– Orders Products From Merchant
3PL Provider [drop-shipper] – Manages Inventory – Fulfills Orders on Behalf of Merchant – Invoices Merchant for Services
Shipper
– Ships Orders on Behalf of Merchant/3PL
Third-Party Logistics Model (3PL)
• Merchant • Supplier • Customer
The Three Perspectives
The Merchant Perspec/ve
Drop-‐Ship
Pros – No Cost Product Expansion – Focus on Customer Experience – Limited Logistics Mgt. – New Opportunities to Grow
Cons – Partner Compliance Mgt. – More Suppliers to Manage
3PL
Pros – Fewer Suppliers to Manage – Focus on Customer Experience – Limited Logistics Mgt. – Less Expensive than
warehouses
Cons – Upfront Inventory Costs – Partner Compliance Mgt. – New Challenges to Manage
The Supplier Perspec/ve
Drop-‐Ship
Pros – Increased Exposure to
Marketplace – Increased Product Line Depth &
Buying Power – Limited Marketing Management – Many New Opportunities to Grow
Cons – Potentially Increased Inventory
Management Costs – Partner Compliance Programs – Diverse Operations to Manage – New Challenges to Manage
3PL (Not Applicable)
• When Managed Well… The Experience is Better, Faster, and Cheaper
• When Managed Poorly… Poor Customer Experience = Bad Customer Reviews – Cancellations Due to Out of Stock – Returns for Poor Product Presentation – Customer Service Complaints for Late Shipments – Administrative Overhead for Program Outweighs Savings
The Customer Perspec/ve
Drop-Ship Programs are of two varieties – Merchant Managed
• Merchant Connects Directly with Supplier • Merchant Manages Entire Order Life-Cycle
– Provider Managed
• Merchant Connects with Supplier via Provider • Provider Manages Information Delivery • Provider, Merchant, & Supplier Manage Order Life-Cycle
Two Flavors of Drop-Ship Programs…
Types of Services Available – Rela/onship Management – Product Catalog Building – Inventory Management – Order Processing – Shipping Rules Management – Packing Slip Management – Invoicing Management – Service Level Management
Traditional Drop-Ship Services…
CommerceHub www.commercehub.com
– Full Service Drop-Ship Provider
Dropship Commerce www.dropship.com
– Product, Inventory, & Order Management Provider
VendorNet www.vendornet.com
– Drop-Ship Management & eCommerce Solution Provider
Leading Drop-Ship Providers
Banneker Industries http://www.banneker.com/
– Sponsors of Today’s Summit – Footprint in 6 States & MSBE
Exel America www.exel.com
– Global Coverage – 74,000 employees / 300 warehouses
Schenker USA www.schenkerusa.com
– Coverage: Europe, Asia, South America, Africa, North America – 36,000 employees / 405 warehouses
Kuehne & Nagel Logistics, Inc. www.kuehne-nagel.com
– Global Coverage – 19,000 employees / 50 warehouses
Leading 3PL Providers
Understand Your Business Goals – Remember the Apple Farmer
Research Marketing Opportunities – Self-Managed Retail/Wholesale – Distributor Managed Wholesale – Drop-Ship & 3PL
Grow – Utilize a Distributed Supply Chain of Drop-Ship & 3PL
Key Next Steps…
Thank you for Attending
Please feel free to send any questions. [email protected]
518.810.0700 x3912