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11.10 Solutions to Order Fulfillment Problems Along the Supply Chain 369

• The keys to addressing the inefficiencies and costs rest
returns are accepted in convenience stores and at with improved supply chain software applications,
gas stations. For example, BP Australia Ltd. (gaso- re- engineered (fulfillment) operations, and adoption of
line service stations) teamed up with wishlist.com. supply chain analytics.
au (now closed), and Caltex Australia to accept
returns at the convenience stores connected to its B2B fulfillment tends to be more inefficient than B2C
gasoline stations. The accepting stores may offer in- because it is usually more complex. Typically, the shipments
store computers for ordering and may also offer are larger, there are multiple distribution channels, the ship-
payment options, as at Japanese 7- Elevens (7dream. ment frequency is more varied, the breadth of the carrier ser-
com). In Taiwan and some other countries, you can vices is more uneven, there are fewer EC carrier offerings,
order merchandise (e.g., books), pay, pick up the and the EC transaction paths are much more complicated.
item ordered, and return unwanted items, at a The types of improvements in applications and re- engineering
7-Eleven store. Brick-and-mortar stores usually of processes needed to resolve these sorts of complications
allow customers to return merchandise that was revolve around the automation of physical systems, as well
ordered online to their physical stores (e.g., as the use of business process management (BPM) software
walmart.com and eddiebauer.com). to automate processes.
• Auction the returned items. This option can go
hand-in-hand with any of the previous solutions. Using E-Marketplaces and Exchanges to Ease
Order Fulfillment Problems in B2B
For strategy, guidelines, and other information on returns, In Chapter 4, we introduced a variety of e-marketplaces and
see The Reverse Logistics Executive Council (cscmp.org/ exchanges. One of the major objectives of these entities is to
product-type/reverse-logistics). improve the operation of the B2B supply chain. Let us see
how this works with different business models.
Order Fulfillment in B2B
• A company-centric marketplace can solve several supply
chain problems. For example, CSX Technology devel-
According to recent forecasts by Forrester Research (reported
oped an extranet-based EC system for tracking cross-
by Demery 2015), online revenues for B2B EC in 2015 were country train shipments as part of its supply chain
substantially higher than online revenues for B2C EC. The
initiative, and was able to effectively identify bottlenecks
figures in the USA were close to $780 billion and $304 bil- and more accurately forecast demand.
lion, respectively. The estimate is that B2B will climb to $1.1
• Using an extranet, Toshiba America provides an ordering
trillion in 2020, while B2C will move to $500 billion. In system for its dealers to buy replacement parts for
spite of the sizeable difference, B2B EC is far less developed
Toshiba’s products. The system smooths the supply chain
than B2C EC. The differences are found not only in the and delivers better customer service.
front-end experience but also in the back-office functionality
• HighJump Software suggested taking into account a num-
including information management, Web content manage- ber of key elements for optimal order fulfillment includ-
ment, and order management.
ing the automation of picking, packing and shipping, the
Some of the major differences in order management capa-
bilities were pinpointed in an earlier survey sponsored by transformation of paper-based processes, and the inclu-
sion of sales and marketing input into various supply
Honeywell and conducted by Peerless Research Group
(2013) for Logistics Management and Supply Chain chain processes.
Management Review. Based on responses from 469 supply
For additional discussion on how fulfillment is done in
chain managers, most of whom were responsible for either B2B, see fedex.com/us/supply-chain/services/fulfillment-
B2B or a combination of B2B and B2C EC systems across a
services and Demery (2012).
range of industries, the survey revealed that:
• The most important missions for their systems were Order Fulfillment in Services
increasing the volume and speed of fulfillment while
reducing costs per order, increasing profitability, and Thus far, we have concentrated on order fulfillment with
improving customer service. physical products. Fulfilling service orders (e.g., buy or sell
• Many of the inefficiencies and increased costs in order stocks, process insurance claims) may involve additional
fulfillment were due to increased transportation, packag- information processing, which requires more sophisticated
ing, and materials costs. EC systems.