Bull whip effect 3

Example 3 microage ups tracking 19 as a personal

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Unformatted text preview: rtners or is called back hours or days later. Example 3: (MicroAge-UPS Tracking [19]) As a personal computer (PC) distributor, MicroAge carries 35-50 days of PC inventory bought from manufacturers like IBM in unconfigured forms. Upon receiving an order from a reseller, MicroAge configures the final product by loading other hardware and software. This configure-toorder process by Micro-Age is in the spirit of the “postponement strategy” or “last point differentiation” ([20] and [2l]). The configured PCs are then packaged and drop-shipped by UPS, as the logistics provider, directly to end customers, thereby bypassing resellers. While the customer order passes through multiple parties, the order status is maintained at a single point by UPS. Hence, UPS manages the shipment status function including claims processing, order tracking, tracing and research through a system called UPS Host Access. Host Access receives data into a mainframe environment multiple times a day, and runs hand in hand with Windows-based invoice/order entry application operating on a mainframe. INI produces a seven-day running delivery report for all UPS shipments. All members of the post-shipment service center have direct access to Host Access. When the customer calls a reseller for order status, the reseller can access Host Access on the Internet and check the status. Alternatively, the customer can directly access the web site. Host Access can also be used to generate proactive phone calls to the receiving party if delivery is delayed for some reason. Finally, on-line claims can be submitted through Host Access. Cl The key benefit of this type of information sharing is the improvement of the quality of customer service, reduction in payment cycle, and savings in labor cost of manual operations. The quality of service improves as problems are resolved in a single call in a matter of minutes rather than hours and days. Since delivery problems delay the payment of product sales or service fees, fa...
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