Why the fulfillment services strategy works.

fulfillment services - Why the fulfillment services strategy works.

It may seem pretty complex to a normal person on the street who’s never really thought about it, but somewhere along the lines, someone did think about direct response fulfillment services and we should be grateful. We should be grateful because this thing works and it works well. Someone took the time and effort to make sure systems of this magnitude were functional so that a business like yours or your daddy’s could flourish in a floundering economy.

THE ORDER FULFILLMENT SERVICES STRATEGY ALWAYS DETERMINES THE DE-COUPLING POINT IN THE SUPPLY CHAIN, WHICH DESCRIBES THE POINT IN THE SYSTEM WHERE THE “PUSH” (OR FORECAST-DRIVEN) AND “PULL” (OR DEMAND-DRIVEN SEE DEMAND CHAIN MANAGEMENT) ELEMENTS OF THE SUPPLY CHAIN MEET.

The decoupling point always is an inventory buffer that is needed to cater for the discrepancy between the sales forecast and the actual demand (better known as the forecast error). It has become increasingly important to move the de-coupling point in the supply chain to minimize the dependence on forecast and to maximize the reactionary or demand-driven supply chain elements. This particular initiative in the distribution elements of the supply chain corresponds to the so called Just-in-time initiatives pioneered by automobile manufacturers in the 1970s. Everyone remembers that fiasco. The orderfulfillment services strategy has also strong implications on how firms customize their products and deal with product variables. Strategies that can be used to mitigate the influence of product variety include modularity, option bundling, late configuration, and built to order strategies—all of which are generally referred as mass customization strategies. That’s a lot to swallow. That’s why someone else did all the thinking for you.

fulfillment services