CHAPTER 11 DISTRIBUTION MANAGING FULFILMENT OPERATIONS.docx - CHAPTER 11 DISTRIBUTION MANAGING FULFILMENT OPERATIONS 1 Role of DC Operations(in SCM

CHAPTER 11 DISTRIBUTION MANAGING FULFILMENT OPERATIONS.docx...

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CHAPTER 11: DISTRIBUTION: MANAGING FULFILMENT OPERATIONS 1. Role of DC Operations (in SCM) These inventory handling, storage, and processing facilities help SCs create time and place utility and enhance its competitive advantage (i.e., five roles): a. Balancing supply and demand b. Protecting against uncertainty c. Allowing quantity purchase discounts d. Supporting production requirements e. Promoting transportation economies 2. Four functions (functionality) a. Accumulation, Sortation, Allocation, Assortment 3. Accumulation a. Involves the receipt of goods from a variety of sources. Allows companies to consolidate orders and shipments for production and fulfilment processes b. DC serves as a collection point for product coming from multiple origins and provides required transfer, storage, or processing services c. Fewer delivers to schedule and manage and significant transportation cost savings are achieved through larger, more cost-efficient deliveries 4. Sortation a. Focusing on assembling like items together for storage in the facility or transfer to customers. It is essential for the effective management of inventory b. During the receiving process, the goods are segmented according to their key characteristics and prepared for safe storage in the facility or for immediate 5. Distribution a. Characteristics: production lot number, stock-keeping unit (SKUs) number, case pack size, expiration date
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2 6. Allocation a. Focusing on matching available inventory to customer orders for a SKU, in which a DC can allocate products on a case or individual box unit basis b. The order is compared to inventory levels, and available units are retried from storage according to the quantity requested by the customer c. This break-bulk capacity promotes product availability for multiple customers and allows them to purchase needed quantities rather than excess volume that is not desired
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