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Extending the Supply Chain

How Cutting-Edge Companies Bridge the Critical Last Mile into Customers’ Homes

Extending the Supply Chain by Kenneth Karel Boyer
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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.

AMACOM; Read online
Title: Extending the Supply Chain
Author: Kenneth Karel Boyer; Markham T. Frohlich; G. Tomas M. Hult
 

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