Item picking operation may be more suited to internet

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item picking operation may be more suited tointernet or catalogue orders (eg picking items from tote bins in flow racks to tote bins on conveyors, followed byparcel packing stations). Disadvantage: 1. increasing overall inventory levels, as safety stocks will be needed forstore and internet channels. The decision as to whether to have separate inventory, common inventory/ hybrid ‘ring-fenced’ inventory (which allows inventory transfer between channels, but may incur inter-NDC transport costs) is akey factor in the distribution network strategy. 2. the collection/delivery interface with the customer may not becompletely separate. If internet orders are to be delivered to consumers’ homes (or drop points, such as petrol ortrain stations), then it makes sense from a transport viewpoint to serve this channel from a separate DC. However,
omnichannel retailers have found that ‘click-and-collect’ has become increasingly popular (consumers order on theinternetbut wish to collect from a store). The goods then need to be transferred back to the store delivery network,thus incurring transport costs (and a time delay) between the different NDCs. 3. There may be a need to transferreturns between the store and internet supply chains – for example, goods with slightly damaged packaging may bereturned by a consumer who bought them on the internet and it may then be decided to sell these at a discount in astore sale. It may be decided to sell off overstocked internet items through store sales.- Segmentation by product group(ie having a network of NDCs each holding a different product group). Ad:Solve the problem of additional safety stocks and the unnecessary movements of goods between NDCs in relation to‘click-and-collect’ and returns. Dis: However, need to be a consolidation of loads between the NDCs so that a singledelivery can be made to each store (ie containing goods from all product groups). Would incur inter-NDC transportcosts. Consumers also have a strong preference for receiving all the items ordered in one delivery, rather thanreceiving multiple packages on different days. - Segmentation by the storage and handling characteristic of each product(eg one NDC holding small items,one holding medium size itemsand one holding oversize itemsthat may require two people to handle). Ad: benefitthe warehousing element as appropriate specialist storage and materials handling equipment could be installed ineach NDC. Dis: Difficulty of consolidating loads, unless separate transport networks are necessary for eachgrouping (eg large household items may require specialist vehicles/ delivered directly to consumers using two-mandelivery vehicles). One option is to locate the NDCs close to each other on the same distribution park (creating awarehouse ‘campus’). - Segmentation by geographical region. Ad: Network of RDCs serving stores and consumers in their region,provide short delivery distances to the stores; improving store replenishment times and reducing secondary transport

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Term
Summer
Professor
MsElishia

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