Order Fulfillment: The Hidden Key to eCommerce Success

5798 Words Dec 17th, 2012 24 Pages
Order Fulfillment: The Hidden Key to e-Commerce Success
By Fred R. Ricker and Ravi Kalakota

n July 1995, a young Wall Street computer whiz named Jeff Bezos opened a bookstore offering more than one million titles yet virtually no inventory. His brainchild—Amazon.com—has grown since then from four employees operating out of a 400 square-foot garage in Seattle into an online company with a stock valuation greater than most Fortune 500 companies. His initial concept—a virtual bookstore designed to do business exclusively on The Internet offers a wealth of the Internet—was new business opportunities for obviously brilliant start-ups and established compaand well executed, nies alike. Yet while everyone as evidenced by wants a piece of the
…show more content…
Often, e-Commerce retailers give little thought to order fulfillment and distribution—a capability critical to the success or failure of Web commerce. Our research shows that the lack of an
Fall 1999

integrated supply chain infrastructure or weaknesses in integrating multiparty logistics components can undermine the benefits of e-Commerce and hinder innovative responses to the competition.

The e-Fulfillment Opportunity
The Internet offers a rich new opportunity for direct consumer access, but it also raises new challenges. Web retailers find product fulfillment—picking and packing in very small quantities and shipping via parcel carriers—a particularly difficult activity. It often requires relying on third-party fulfillment vendors (a concept discussed later in this article) to do the job. But collaboration in fulfillment chains is no longer confined to conventional two-company alliances, such as between shipper and a logistics services provider. Today, groups of enterprises are banding together for a common purpose—to satisfy customer demand. A new form of competition is emerging: e-Supply chain vs. e-Supply chain. In the Internet book retailing war, for example, the competition is not only between Amazon.com and Barnes & Noble but also among groups of companies that make up the e-Supply chain anchored by each company. An
Open Document