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Supply Chain World - 2000 Chicago, Illinois. From Warehouse to WEBhouse: Managing the eFlow of Goods. Richard J. Sherman SVP, Visioneering EXE Technologies.

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From warehouse to webhouse managing the eflow of goods

Supply Chain World - 2000

Chicago, Illinois

From Warehouse to WEBhouse: Managing the eFlow of Goods

Richard J. Sherman

SVP, Visioneering

EXE Technologies


Exe technologies inc

EXE is in the business of providing global one-to-one fulfillment solutions that minimize inventory and operating costs while maximizing customer loyalty.

EXE Technologies, Inc.

The world's market leading provider of multi-channel distribution software, featuring eFulfillment systems (eFS) and warehouse management systems (WMS).


Exe is a global company
EXE is a global company

More than 300 customers worldwide

More than 500 employees worldwide

14 offices worldwide

Dubai Hong Kong Kuala Lumpur

Los Angeles Melbourne Philadelphia

Singapore Seoul Tokyo

Amsterdam Paris London


Putting the internet into perspective

  • Television - 13 years to reach 50 million viewers

  • Internet - less than 10 years to reach 225 million users and still growing fast

putting the Internet into perspective..


The Information Superhighway is the Leading Driver of Change in the New Millennium

Creating the Future Supply Network “InfoStructure”


companies continue to face unprecedented changes in the channels of distribution

Changing

Customer Requirements

“Mass Personalization”

New

eCompetitors

Flat Growth in

Traditional Markets/

Globalization

Channel

Strategy

Proliferation

Of Distribution

Points

Intense Price and

Margin Pressure

Time-Based

Strategies

Internet based

Technology

Changing Role

of Distributors &

Sales Agents


What s visioneering anyway
what’s visioneering anyway? channels of distribution


eCommerce business issues channels of distribution

  • Emerging Market = Lots of Noise, Converting Opportunity into Profits

  • Time to Market = Market Leadership

  • Profitability vs Valuations

  • Same Discussions in Every Boardroom

  • Traditional Business must be Supported- Volume won’t Shift Immediately

  • Channel Blurring and Proliferation

  • Customer Loyalty - Format Changes


Consequences on the supply chain

Increased Competition - transparent pricing increases need to differentiate

Quick Turnaround - consumers expect 24 hour turn around - order today, get it tomorrow

Perfect Accuracy - consumers expect deliveries to be accurate

High Velocity - changing demand patterns

“Spikes” are more pronounced - companies must anticipate and manage

Ripple effects of “spikes” through a company’s various supply chains must be managed

This puts pressure on order execution

Anyone can take an order, can you execute?

consequences on the supply chain


Why are logistics and warehousing important
why are logistics and warehousing important? to differentiate

“A front-end Web site is often the easiest and least differentiating section of an effective Web strategy…

A little-discussed, not-so-pleasant fact is that many Web commerce transactions are unprofitable because of back-end fulfillment problems.”

Source: Gartner Group,

“The Fallacies of Web Commerce Fulfillment”

April, 1999


eCommerce business considerations to differentiate

  • Must Consider Economics of Geographic Dispersion/Demographic Segmentation

  • Volume, Capacity, Sourcing, Deployment Economics Change Dramatically

  • Price Elasticity - Customer Service, Cost to Serve, Competition

  • ABC/Menu based Pricing/Outsourcing

  • Postponement & Consolidation Strategies Become Critical


Ecommerce comes in different flavors

Business to Consumer to differentiate (b2c a.k.a eTailing)

Business to Business (b2b a.k.a webSaling)

Outsourced eCommerce (a.k.a. third party logistics)

eCommerce comes in different flavors


b2c eCommerce to differentiate


Active internet users by region
active Internet users by region to differentiate

Rest of Europe 30 m

France 6m

Germany 11m

UK 12m

Canada

12 m

Japan

20 m

USA

110 m

Asia/Pacific

20 m

Latin

America

10 m

Africa,

Mid East

4 m

World-wide total: 225m

Source: INTECO research Active “have used the Internet in the last 3 months”


Poised to grow from 43 billion in 1998 to 1 3 trillion in 2003

$1.3 trillion to differentiate

$43 billion

1998

2003

50% of All Companies Currently Have Web Sites, but Do Not Yet Offer eCommerce

Source: Forrester Research

b2b eCommerce

Poised to grow from $43 billionin 1998 to $1.3 trillion in 2003


B2b market potential
b2b market potential to differentiate

  • Small businesses — defined as companies with fewer than 100 employees — have not traditionally benefited from large areas of business services, automation and trade

  • Yet they account for a huge piece of the economy — growing from 7.2 million companies in 1997 to 8 million in 2002 (IDC)

  • The Internet levels the playing field — more than 3 million small businesses are projected to sell products online by 2002, representing 38% of the total (IDC, BRS)

  • Moreover, the Internet reaches globally — to international customers and suppliers that businesses have typically worked with

  • Business and international participation vastly expands the spectrum of the B2B market

  • Dell Computer reports online sales in Q1 1999 of $18M/day, accounting for 30% of the company’s revenues. Dell expects this percentage to increase to 50% by 2000

Sources: IDC, BRS


Outsourced ecommerce managing the b2b and b2c flow of goods
outsourced eCommerce: to differentiatemanaging the b2b and b2c flow of goods

Retailer

Manufacturing

Distribution

Consumer

Raw Materials

b2c

b2b

eCommerce initiatives require more complex value added processing, postponement, and consolidation strategies creating a major opportunity for third party logistics services!

Packaging

  • b2b and b2c flow of goods is different from traditional as it:

  • Is more complex

  • Often has unique characteristics

  • Requires collaboration

  • Involves global markets

Finished

Goods

Parts

Shipping

Warehousing

Final Delivery


C commerce the next stage in supply chain evolution
C-Commerce: to differentiateThe Next Stage in Supply Chain Evolution?

Collaborative Commerce

Source: Gartner Group


SCM issues: to differentiateManaging Across Channel Process Boundaries

Supplier

Consumer

Source

Make

Deliver

Manufacturing

Supply Chain

Point of Sale

Source

Make

Deliver

Source

Deliver

Make

Source

Supplier’sSupplier

Customer’sCustomer

Manufacturer

Supplier

Customer

Plan

Manufacturer

Distributor

Wholesaler

Retailer

Sourcing/

Purchasing

Materials

Management

Physical

Distribution

Deliver

Lines of Fracture in Pipeline Flow

  • Organizational Boundaries

  • Geographic Boundaries

  • Decoupling Points

    • Where Plan Driven and Customer OrderDriven Activities Meet

    • Normally Coincide with Time/Capacity/Inventory Buffers Against Uncertainty

Source: R.Sherman, W.E.R.C. “SCM for the Millennium”

“We can’t deliver beer over the Internet”


implementing Internet strategies requires to differentiate

New Logistics Models

Traditional SCM Evolving to Supply Network Mgmt

- Requires Global Views and Partnerships

Traditional SCM

Issues:

-Seamless ePi peline

-”Fractured” Physical

Flow of Goods Pi peline

Global Requirements:

-Flexibility

-Adaptability

-Scalability

-Maintainability

-Supportability

“Integrated Market

Response Systems”

(IMRS)

“Goods” are required at every “Point of Interaction” across the channel requiring:

eBusiness Collaboration

Global Flow Control: Supply Network Management


Supply Planning to differentiate

Replenishment Planning

Material Flow Control

Merchandise Flow Control

eCommerce execution:

optimal economic response

“Goods that seldom pause vs Goods that seldom move!”

Flow of Goods (FOG)

Physical InfraStructure: eBusiness Process Execution

Suppliers

Source

Manufacturers

Make

Distributors

Deliver

eFulfillment Solutions for Collaborative Execution

Supply Deployment

Demand Response

Electronic InfoStrucure: eBusiness Process Optimization

Flow of Information (FOI)


implementing Internet strategies requires to differentiate

eMarket Response

Traditional SCM

Evolving to

Supply Network

Management

Traditional SCM

Issues:

-Seamless ePi peline

-”Fractured” Physical

Flow of Goods Pi peline

Internet Changes

Everything:

Multiple Channels =

Multiple Flow of Goods

Process Support

Global Requirements:

-Flexibility

-Adaptability

-Scalability

-Maintainability

-Supportability

“Integrated Market

Response Systems”

(IMRS)

“Goods” are required at every “Point of Interaction” across the channel requiring:

eBusiness Collaboration

Logistics systems will have to support many Flow of Goods process initiatives in an eBusiness environment

Global Flow Control: the “eFulfillment Center”


implementing Internet strategies requires to differentiate

multi-channel distribution

Traditional SCM

Evolving to

Supply Network

Management

B2C:

eTailing

Flow of Goods

Traditional SCM

Issues:

-Seamless ePi peline

-”Fractured” Physical

Flow of Goods Pi peline

Internet Changes

Everything:

Multiple Channels =

Multiple Flow of Goods

Process Support

Global Requirements:

-Flexibility

-Adaptability

-Scalability

-Maintainability

-Supportability

“Integrated Market

Response Systems”

(IMRS)

Logistics systems will have to support many Flow of Goods process initiatives in an eBusiness environment

B2B:

webSaling

Flow of Goods

“Goods” are required at every “Point of Interaction” across the channel requiring:

eBusiness Collaboration

Traditional:

eMarket

Flow of Goods

Global Flow Control: the “eFulfillment Center”


The ecommerce process

Acquire to differentiate

Convert

Retain

the eCommerce process. . .

. . . customer loyalty is the ‘pot of gold’



Ecommerce challenges

Execution to differentiate

Multi-channel

Large Number of orders/small number of lines per order

Piece pick

1-1 Fulfillment

Unpredictable demand

Returns

Customer Service

Short order to delivery times

Increased requirements to inform the customer

Increased accuracy requirements

Merchandising

Virtual Merchandising

Mass customization

1-1 Marketing

Globalization

World-wide distribution

Language barriers

Cross Border Financial Issues

Technology

Scalability

Reliability

Multi-platform

API

eCommerce challenges



Succeeding in e commerce requires flawless execution across the entire enterprise
succeeding in e-Commerce requires flawless execution across the entire enterprise

Front End Functionality

Back End Functionality

User Experience

Sourcing Logic

Fulfillment

Returns

Delivery

Merchan-

dising

Design

Order

Validation

& Status

Source

Routing

Ware-

housing

Merge In

Transit

eCRM

Content

Development

Value

Added

Services

Data

Analysis

Customer

Profiles

Marketing

Payments

Web Infrastructure

Multi-

Touchpoint

Customer

Service

Assortment

Planning

Pricing

Validation

Hardware

Software

Processing

Branding

Promotions


Ecommerce application framework

“CUSTOMER FACING” the entire enterprise

“CUSTOMER FULFILLMENT”

eFulfillment System

Catalog Management/Merchandising

Returns

Pick

Pack

Ship

Receive

Putaway

Customer Relationship Management

Manifest

Order Management

Order Entry

Quality

Value Add

Crossdock

Web Site

Order

Visibility

Order Broker

API Links

Activity Based Costing and 3PL Billing

Payment Processing

Labor Management

eBusiness Process Management

Order Status

Customer Service

Optimization

Service

Alerts

Events Monitor

Planning & Collaboration

eCommerce application framework

TechnologyInfrastructure

Enterprise Applications


Achieving customer loyalty with efulfillment

Speed the entire enterprise

Time-to-market

Order-to-fulfillment cycle time

Agility

Wide Assortment

Personalization

Multi-channel distribution

Precision

Deliver the right product at the right time

achieving customer loyalty with eFulfillment



Meet the efulfillment center efc

Traditional Warehouse the entire enterprise

Receive

Putaway

Replenish

Pick

Pack

Ship

eFulfillment Center

Traditional WMS

Crossdocking/Merge-in-Transit

Value Added Processing

Kitting /Assembly

Packaging/Labeling

1 to 1 Marketing, etc.

Returns

Quality Assurance

Dynamic Customer Service

meet the eFulfillment Center (eFC)


The efulfillment process

Flow of Goods the entire enterprise

Communication

Communication

Execution

Communication

Optimization

the eFulfillment process

Consumer

Supplier

BusinessCustomer

Retailer

“Customer Loyalty Process”


The efulfillment process in action
the eFulfillment process in action the entire enterprise

RMA

ASN

Supplier

Return

  • eFulfillment

    • Receiving

    • VAP

    • Crossdocking

    • Pick & Pack

    • Shipping

    • QA

    • Returns

Order

Delivery

Customer Experience

Order

Order

Delivery

Service

Customer Delivery

  • eFulfillment

    • Receiving

    • VAP

    • Crossdocking

    • Pick & Pack

    • Shipping

    • QA

    • Returns

Order Broker

Order

Alerts

Inquiry

Availability

Delivery

Delivery Confirmation

Visibility

Alerts

Service

  • eFulfillment

    • Receiving

    • VAP

    • Crossdocking

    • Pick & Pack

    • Shipping

    • QA

    • Returns

Pickup or Return


Pick from store
pick from store the entire enterprise

Store 1

Store n

Store 2

  • eFulfillment

    • Receive

    • Crossdocking

    • Putaway

    • Pick and Pack

    • Quality Assurance

    • Pickup/Shipping

    • Routing

    • Dynamic Customer Service

    • Returns

Consumer Order

Store

Inventory

Consumer

Experience

CustomerPickup

CustomerPickup

CustomerPickup

Delivery

Delivery

Delivery

Delivery

Confirmation

Consumer

Experience


Pick from d c efulfillment center
pick from d.c. the entire enterprise(eFulfillment Center)

Returns

Freezer

Dry Goods (Ambient)

Chilled

Store 1

Store n

Store 2

Pick and Pack Center

Distribution Center

  • eFulfillment System

    • Receive

    • Putaway

    • Pick and Pack

    • Quality Assurance

    • Shipping

    • Routing

    • Dynamic Customer Service

    • Returns

Consumer

Order

Existing

WMS

Consumer

Experience

Pick and Pack Center Replenished as a Store

Delivery

Delivery

Confirmation

Consumer

Experience


Hybrid solution pick from d c and with direct delivery and or store lcp based customer pickup
hybrid solution - pick from d.c. and with direct delivery and/or store/LCP-based customer pickup

Store 1

Store n

Consumer

Order

  • eFulfillment System

    • Receive

    • Putaway

    • Pick and Pack

    • Quality Assurance

    • Shipping

    • Routing

    • Dynamic Customer Service

    • Returns

Consumer

Experience

Pick and Pack Center

Delivery

CustomerPickup

CustomerPickup

Consumer

Experience

“Lifestyle Collection Points”


implementing Internet strategies requires and/or store/LCP-based customer pickupcollaboration

Traditional SCM

Evolving to

Supply Network

Management

B2C:

eTailing

Flow of Goods

Traditional SCM

Issues:

-Seamless ePi peline

-”Fractured” Physical

Flow of Goods Pi peline

Internet Changes

Everything:

Multiple Channels =

Multiple Flow of Goods

Process Support

Global Requirements:

-Flexibility

-Adaptability

-Scalability

-Maintainability

-Supportability

“Integrated Market

Response Systems”

(IMRS)

Logistics systems will have to support many Flow of Goods process initiatives in an eBusiness environment

B2B:

webSaling

Flow of Goods

“Goods” are required at every “Point of Interaction” across the channel requiring:

eBusiness Collaboration

Traditional:

eMarket

Flow of Goods

Global Flow Control: the “eFulfillment Center”

As eBusiness Initiatives Evolve, New Platforms

Will Be Utilized; such as, Exchanges, ASP, Portals, etc. while maintaining integration to traditional platforms

and all electronic processes will be

physically enabled resulting in collaboration across multi-channel eFulfillment Centers


The need for collaboration forecasting myth versus logistics execution reality
the need for collaboration: and/or store/LCP-based customer pickup“Forecasting Myth versus Logistics Execution Reality”

  • Not everyone can nor will behave according to plan/forecast

  • Too many different organizations, functions, processes, activities, and people…globally!

  • Each with different economic drivers, objectives, andperspectives!

“Many things must be done right to succeed, but only one thing done wrong can cause failure!”


Collaborative planning forecasting and replenishment cpfr
Collaborative Planning, and/or store/LCP-based customer pickupForecasting, and Replenishment (CPFR)

The Linchpin to Collaborative Commerce

Originally CPG Industry Initiative

Guidelines published in June 1998 with pilot studies to be published late 1999

CPFR under review by high tech (RosettaNet) and automotive (AIAG)

CPFR requires Collaborative Execution


Collaborative execution

C-Commerce Partner and/or store/LCP-based customer pickup

Supplier

Manufacturing

Distribution

Retailer

Consumer

collaborative execution

C-Commerce Partner

Messaging

Messaging

Messaging

“Customer Loyalty Process”


implementing Internet strategies requires and/or store/LCP-based customer pickup

External Channel Relationships

Traditional SCM

Evolving to

Supply Network

Management

B2C:

eTailing

Flow of Goods

Traditional SCM

Issues:

-Seamless ePi peline

-”Fractured” Physical

Flow of Goods Pi peline

Internet Changes

Everything:

Multiple Channels =

Multiple Flow of Goods

Process Support

Global Requirements:

-Flexibility

-Adaptability

-Scalability

-Maintainability

-Supportability

“Integrated Market

Response Systems”

(IMRS)

Logistics systems will have to support many Flow of Goods process initiatives in an eBusiness environment

B2B:

webSaling

Flow of Goods

“Goods” are required at every “Point of Interaction” across the channel requiring:

eBusiness Collaboration

As eBusiness Initiatives Evolve New Platforms

Will Be Utilized such as Exchanges, ASP, etc. while

Traditional Platforms will have to be maintained

and all electronic processes will need to be

physically enabled resulting in eFulfillment Centers

Traditional:

eMarket

Flow of Goods

Global Flow Control: the “eFulfillment Center”

Traditional & eBusiness Initiatives will stimulate

growth in 3PL Market: 3PL & “4PL“ will provide the future “eCollaboration Integration of

Electronic “InfoStructure” & Physical “InfraStructure”

“Outsourced eCommerce”


the new eCommerce paradigm: and/or store/LCP-based customer pickupImplementing A Collaborative Supply Network that Manages the Convergence of Execution InfraStructure & Planning InfoStucture

Sourcing

Channel

Partners

Warehousing

Materials

Demand

Planning

Consumers

Transportation

Marketing/

Sales

Manufacturing

Strategic Planning

Supply

Partners

3PL/4PL

Partners


Vision: and/or store/LCP-based customer pickup

Where we want to be

Engineer:

Develop Alternatives, Cost & Returns

creating a new paradigm:

the collaborative supply network

Execution:

Getting it done!


Just do it

Your Next Competitor May Be “MitchCo”! and/or store/LCP-based customer pickup

“Just Do It!”

Rich Sherman, SVP, EXE Technologies, Inc.

1-508-366-8022 / [email protected]

EXE Home Page: http://www.exe.com

Thank You!


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