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WERC Expert Outlines 5 Best Practice Steps to Successful e-Fulfillment


From the May 2001 edition of Managing Logistics

E-commerce has wreaked havoc on many logistics managers' fulfillment systems by adding new operational complexities, creating smaller orders, fragmenting customer demand, last-minute changes and returns. Mastering the e-fulfillment best practices enables companies to address these challenges. Henry Bruce, vice president of market strategy for Optum Inc., outlined the five essential best practices for successful e-fulfillment at this year's annual conference of the Warehousing Education and Research Council. They include:

  1. End-to-end visibility. Companies must organize inventory and available information across the supply chain in a way that supports fulfillment and customer service operations. This will enable companies to respond quickly to issues and questions from internal sources and trading partners. The result will be reduced order cycle times, the elimination of costly expediting, lower inventory and increased productivity.
  2. Available-to-deliver. It is no longer acceptable to provide customers with just product descriptions and price information through a Web catalog. Customers want to know whether a product is available and when it can be delivered before the order is placed. Providing a real-time Ōavailability” button on the buyer's browser provides the seller with a differentiating advantage in the e-commerce strategy.
  3. Continuous flow execution. Fulfillment operations should offer suppliers visibility into buyer inventory levels and enable logistics processes that automatically release product to buyers based on inventory trigger points. End-to-end visibility provides the foundation for suppliers to extend their reach into their trading partners' inventory information system. The objective is to automate through dynamic replenishment programs. The net result is reduced transaction costs and more timely and continuous flow of inventory.
  4. Mass personalization. The success of Internet-driven supply chains is dependent upon the organization's ability to adapt systems and processes to support evolving business models, where change is being driven by customer demands. What is needed is configurable technology that reduces the normal lead-time associated with other packaged or customized solutions. Logistics processes must support business models where mass-produced products are customized and delivered to individual requirements during the fulfillment process.
  5. Rapid adaptability. In today's Internet economy, companies need new technologies and processes to meet the demand for goods and services. The true test is how quickly your enterprise can flawlessly execute. For companies that distribute or manufacture physical goods, this requires responsiveness to demand (the flow of orders) and the ability to rapidly adapt to changing conditions.

These new fulfillment strategies operate with a high degree of velocity, flexibility, and customer responsiveness,” says Bruce. They replace current fulfillment systems, which are based on mass production and economies of scale and lack responsive end-to-end fulfillment capabilities.

Tesoro Selects Internet Fulfillment Solution

Tesoro Petroleum Corp. has selected the TelaFuel Internet software solution fromTelaPoint, Inc. (502-485-1700) to streamline and manage its fuel replenishment process.

Tesoro will use TelaFuel, a browser-based application suite, to improve management of fuel replenishment operations for its Mirastar and certain Tesoro branded fuel facilities. With TelaFuel, Tesoro will electronically collect and process real-time fuel replenishment information from retail locations and share it with preferred fuel carriers to better manage the delivery of product, resulting in efficient supply transactions with transportation partners.

Leveraging the Internet supply chain solution will assist us in executing our retail strategy to deliver more of our gasoline production directly to the retail consumer,” says Bill Van Kleef, Tesoro's executive vice president and COO. ŌTelaFuel will help us reduce costly paper transactions in our retail fuel supply process and enable us to enhance relationships with our preferred suppliers.

TelaFuel is an Internet supply chain software solution that includes Smart Replenishment, Smart Selling and Smart Buying modules. Users have secure access through browser-based software applications allowing for timely and accurate communication with their authorized trading partners.

Traditional Fulfillment Model New Fulfillment Model
  • One size fits all; all customers are fulfilled the same way
  • Orders are typically large and palletized, with TL and LTL shipments
  • Customer demand for products is stable and consistent requiring few last-minute changes
  • One-way product flow with few returns
  • Customer demand is fulfilled on a supply (push) basis driven off forecasts
  • Customer order shipping destinations are concentrated and standard order-by-order basis
  • Fulfillment operations are structured on a customer-by-customer basis
  • Orders are smaller and require piece picks more frequent small parcel delivery
  • Customer demand is fragmented and sporadic with many last-minute changes
  • Two-way product flow with frequent returns
  • Customer demand is pull oriented with demand fulfilled from actual orders
  • Customer shipping is highly dispersed with ship-from and ship-to locations varying on an order-by-order basis

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