Six eFulfilment models
The facilities, equipment, and other physical needs of eFulfilment operations are the easiest to acquire and use. It is information systems which require internal and external integration and the recruitment and training of the workforce that are most difficult to do quickly and well. This is actually the main reason for outsourcing eFulfilment operations to a third-party.
The evolution of e-commerce is affecting many of the basic trade relationships among supply chain partners. For example, third-party outsourcing arrangements tend to involve complex packages of services provided by one service company. Warehousing, picking, shipping, information systems support, labour provision and management are all provided under one long-term contract.
But increasingly, these services are available separately. For example, Celarix, Inc. offers a global package tracking service for a monthly fee. Some software vendors are considering making things like warehouse management, procurement management and similar supply chain applications available on a subscription or per transaction basis. This virtualisation of basic business processes increases the number of options —and potential complexity— for a company’s supply chain. Virtualisation and fragmentation is also likely to extend to the services suppliers offer their customers. Overall, increasing options is good for service buyers and will put price pressure on providers. Consumers will ultimately benefit.
Preparing for an eFulfilment future
An important point for companies to consider is how the flexibility and performance of their fulfillment process fits into its overall business strategy. Components of an effective e-commerce strategy include product offering, marketing approach, web site design and last but not least, eFulfillment. Getting the help of partners who have done it before could be valuable especially in such a new and rapidly changing venture. Making the right eFulfilment choices at the start makes a world of difference to future success.
Alister Danks is a manager with Andersen Consulting’s Strategy competency group, specialising in Supply Chain Management. Robert E. Mann is an associate partner in the Andersen Consulting Supply Chain Practice.