Channels of Distribution as Customer Fulfillment Models
STORE FULFILLMENT
Order is placed through the internet site. the order is sent to the nearest retail store where it is picked and put aside for the customer to pick up or the store can arrange for delivery
FLOW-THROUGH FULFILLMENT
Product is picked and packed at distribution center, and then sent to the store for customer pickup or delivery.
INTEGRATED FULFILLMENT
Retailer operates one distribution network to service both "bricks-and-mortar" (retail stores) and "clicks-and-mortar" (internet sites) channels
DEDICATED FULFILLMENT
Retailer operates two separate distribution networks to service their retail stores and online orders, respectively.
POOL DISTRIBUTION
Small retailers use third party logistics companies for store delivery to achieve efficiency of a truckload shipment and the effectiveness of allowing stores to receive LTL orders on a regular schedule.
flow-through fulfillment model OMNI Channel: advantages & disadvantages
advantages: -eliminates the inventory conflicts between store sales and internet sales -no cost of the "last mile" transportation -store-level inventory status not required -returns handled through the retail store disadvantages: -storage space at the store for pickup items -longer fulfillment lead time
dedicated fulfillment model OMNI Channel: advantages & disadvantages
advantages: -elimination of most of the disadvantages of integrated fulfillment disadvantages: -duplicate facilities and duplicate inventories
integrated fulfillment model OMNI Channel: advantages & disadvantages
advantages: -low startup costs for retailers -workforce efficiency disadvantages: -order profile changes -unavailability of products in eaches -"fast pick" or broken case operation requirements for each pick
direct to store delivery model OMNI Channel: advantages & disadvantages
advantages: -reduction of inventory in the distribution method disadvantages: -possible reduction of inventory visibility of the products to the retailers -requirements of close collaboration and agreement between the manufacturer and retailer
pool distribution model OMNI Channel: advantages & disadvantages
advantages: -saves the company on transportation costs -stores have shorter replenishment lead time than they would otherwise disadvantages: -an additional expense because the retailer has to pay a pool distribution company -additional handlings
store fulfillment model OMNI Channel: advantages & disadvantages
advantages: -short lead time to the customer -low start-up costs for the retailer -returns handled through the retail store -product available in consumer units disadvantages: -reduced control and consistency over order fill -conflicts between store and internet order inventories -requirements of real-time visibility to in-store inventories -requirements of stores' space to store and stage products for pick-up
DIRECT STORE DELIVERY
involves a manufacturer delivering its product directly to a retailer's stores, bypassing the retailer's DC
LTL/TL fullfillment model
less than truckload: -Freight shipments that do not require the entire space in a truck's trailer is less-than-truckload shipping. LTL shipping is the best option for shipments that weigh less than 15,000 pounds. -LTL shipping allows multiple shippers to share space on the same truck. Since you're sharing the truck's space with multiple shippers, there is a higher risk of damaged goods. With LTL, your freight is usually loaded and unloaded multiple times before arriving at its destination truckload: -Freight shipments that need the entire space or weight limit of a truck's trailer is a full truckload (TL) shipment. TL shipping is the best option when the freight weighs more than 15,000 pounds, or the shipper has more than 10 pallets of freight. -Full TL shipments travel on one truck to its destination, creating a more reliable timeframe for shippers. Truckload shipments are generally more expensive and require less handling than LTL shipments