Grow Your Business & Improve Customer Satisfaction through a Distributed Supply Chain of Drop-Ship & Third Party Logistics
Learning Objectives
- Understand the key components of a distributed supply chain utilizing a blend of drop-ship and third-party logistics, and what it means to your building your business
- Learn how a distributed supply chain can reduce costs and improve customer service ratings through improved order fulfillment times and shorter deliveries.
- Examine the strategies to select a drop-ship or third-party logistics program to meet your specific business needs
- See firsthand how these strategies have transformed some of the largest retailers product offerings through virtual inventory and customer service ratings
- Leave with the confidence to examine your business needs and with the knowledge of resources available to build your business through drop-shipping and third-party logistics strategies
2. Distributed Supply Chain Management
Presented by
Paul Brisson
Senior Product Manager
pbrisson@commercehub.com
518.810.0700 x3912
Grow Your Business & Improve Customer Satisfaction through a
Distributed Supply Chain of Drop-Ship & Third Party Logistics
3. Who are we?
Strategy
 /
 Planning
Â
Informa2on
 Technology
 Buying/Selling
Â
Logis2cs
 Materials
 /
 Produc2on
Â
Customer
 Experience
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4. Why are we here today?
SCMS
2013
Learn
Connect
Grow
5. LearnâŚ
§ď§âŻ Key principles of utilizing a distributed supply chain
management program with drop-ship & third-party
logistics (3PL)
How do we accomplish it?
6. ConnectâŚ
§ď§âŻ Get First Hand Knowledge on the Subject
ĂźďźâŻ Share real life experiences
ĂźďźâŻ Discuss what has / has not worked well in the past
ĂźďźâŻ Swap contact information & continue the
conversation
How do we accomplish it?
7. GrowâŚ.
§ď§âŻ Leave with the Confidence to Evaluate a Distributed
Supply Chain Management Program Which Works
Best for You
How do we accomplish it?
9. The Local Apple Farm Stand
Grow
 the
 Apples
 at
Â
the
 Farm
Â
Sell
 the
 Apples
 at
 the
Â
Farm
Â
Harvest
 the
 Apples
 at
Â
the
 Farm
Â
10. Apple Farmer at Farmers Market
Grow
 the
 Apples
 at
Â
the
 Farm
Â
Sell
 Apples
 at
 Local
Â
Farmers
 Market
Â
Harvest
 the
 Apples
 at
Â
the
 Farm
Â
11. Apples at Grocery Store Chain
1.
 Farmer
 Grows
 the
Â
Apples
Â
5.
 Grocery
 Store
 Markets
Â
Apples
 in
 their
 Stores
Â
2.
 Harvest
 &
 Package
Â
Apples
 at
 the
 Farm
Â
3.
 Farmer
 Sells
 Apples
 to
Â
Grocery
 Chain
Â
4.
 Grocery
 Chain
Â
Distributes
 to
 Stores
Â
6.
 Customer
 Purchases
Â
Apples
Â
12. Local Apple Farm
â⯠Farmer Owns Entire Product Life-Cycle
â⯠No Outside Involvement
â⯠Most Profitable Marketing Outlet for Farmer
â⯠Limited Exposure to Customers
Apple Farmer at Farmers Market
â⯠Farmer Owns Product Management & Distribution
â⯠Market & Farmer Responsible for Marketing
â⯠Additional Overhead for Market Fees & Distribution Costs
â⯠Limited Outside Involvement & Exposure to Customers
Apples at Grocery Store Chain
â⯠Farmer Owns Product Management & Wholesale Distribution
â⯠Grocery Store Responsible for Retail Distribution & Marketing
â⯠Decreased Profit Margin for all parties involved / Increased Customer Costs
â⯠Extensive Outside Involvement & Exposure to Customers
Supply Chain & Control
13. What if...Grocery Store Chain could
â⯠Connect with Local Farmers Across the region/country
â⯠Sells Apples on their Website
â⯠Routes Order to Farm Closest to Customer
â⯠Farmer Ships to Customer
â⯠Apples Arrive Fresh, Cost Effective, and Quickly
A New ApproachâŚ
14. Drop-Ship Model
â⯠Farmer
 Owns
 Product
 Management
 &
 Distribu/on
Â
â⯠Grocery
 Store
 Chain
 Responsible
 for
 Marke/ng
Â
â⯠Well-ÂâDeďŹned
 Outside
 Involvement
Â
â⯠NEWâŚMost
 ProďŹtable
 Marke/ng
 Outlet
 for
 Farmer
 &
 Store
Â
â⯠Most
 Exposure
 to
 Customers
Â
Apples Drop-Shipped to Customer
15. Merchant
â⯠Markets & Sells Products to Customers
Customer
â⯠Orders Products From Merchant
Supplier [drop-shipper]
â⯠Owns & Manages Inventory
â⯠Fulfills Orders on Behalf of Merchant
â⯠Invoices Merchant for Sale
Shipper
â⯠Ships Orders on Behalf of Merchant/Supplier
What is Drop-Shipping Exactly?
16. Merchant
â⯠Owns Inventory
â⯠Markets & Sells Products to Customers
Customer
â⯠Orders Products From Merchant
3PL Provider [drop-shipper]
â⯠Manages Inventory
â⯠Fulfills Orders on Behalf of Merchant
â⯠Invoices Merchant for Services
Shipper
â⯠Ships Orders on Behalf of Merchant/3PL
Third-Party Logistics Model (3PL)
18. The
 Merchant
 Perspec/ve
Â
Drop-ÂâShip
Â
Pros
â⯠No Cost Product Expansion
â⯠Focus on Customer Experience
â⯠Limited Logistics Mgt.
â⯠New Opportunities to Grow
Cons
â⯠Partner Compliance Mgt.
â⯠More Suppliers to Manage
3PL
Â
Pros
â⯠Fewer Suppliers to Manage
â⯠Focus on Customer Experience
â⯠Limited Logistics Mgt.
â⯠Less Expensive than
warehouses
Cons
â⯠Upfront Inventory Costs
â⯠Partner Compliance Mgt.
â⯠New Challenges to Manage
19. The
 Supplier
 Perspec/ve
Â
Drop-ÂâShip
Â
Pros
â⯠Increased Exposure to
Marketplace
â⯠Increased Product Line Depth &
Buying Power
â⯠Limited Marketing Management
â⯠Many New Opportunities to Grow
Cons
â⯠Potentially Increased Inventory
Management Costs
â⯠Partner Compliance Programs
â⯠Diverse Operations to Manage
â⯠New Challenges to Manage
3PL
 (Not
 Applicable)
Â
20. â˘âŻ When Managed WellâŚ
The Experience is Better, Faster, and Cheaper
â˘âŻ When Managed PoorlyâŚ
Poor Customer Experience = Bad Customer Reviews
â⯠Cancellations Due to Out of Stock
â⯠Returns for Poor Product Presentation
â⯠Customer Service Complaints for Late Shipments
â⯠Administrative Overhead for Program Outweighs Savings
The
 Customer
 Perspec/ve
Â
21. Drop-Ship Programs are of two varieties
â⯠Merchant Managed
â˘âŻ Merchant Connects Directly with Supplier
â˘âŻ Merchant Manages Entire Order Life-Cycle
â⯠Provider Managed
â˘âŻ Merchant Connects with Supplier via Provider
â˘âŻ Provider Manages Information Delivery
â˘âŻ Provider, Merchant, & Supplier Manage Order Life-Cycle
Two Flavors of Drop-Ship ProgramsâŚ
22. Types of Services Available
â⯠Rela/onship
 Management
Â
â⯠Product
 Catalog
 Building
Â
â⯠Inventory
 Management
Â
â⯠Order
 Processing
Â
â⯠Shipping
 Rules
 Management
Â
â⯠Packing
 Slip
 Management
Â
â⯠Invoicing
 Management
Â
â⯠Service
 Level
 Management
Â
Traditional Drop-Ship ServicesâŚ
23. CommerceHub
www.commercehub.com
â⯠Full Service Drop-Ship Provider
Dropship Commerce
www.dropship.com
â⯠Product, Inventory, & Order Management Provider
VendorNet
www.vendornet.com
â⯠Drop-Ship Management & eCommerce Solution Provider
Leading Drop-Ship Providers
24. Banneker Industries
http://www.banneker.com/
â⯠Sponsors of Todayâs Summit
â⯠Footprint in 6 States & MSBE
Exel America
www.exel.com
â⯠Global Coverage
â⯠74,000 employees / 300 warehouses
Schenker USA
www.schenkerusa.com
â⯠Coverage: Europe, Asia, South America, Africa, North America
â⯠36,000 employees / 405 warehouses
Kuehne & Nagel Logistics, Inc.
www.kuehne-nagel.com
â⯠Global Coverage
â⯠19,000 employees / 50 warehouses
Leading 3PL Providers
25. Understand Your Business Goals
â⯠Remember the Apple Farmer
Research Marketing Opportunities
â⯠Self-Managed Retail/Wholesale
â⯠Distributor Managed Wholesale
â⯠Drop-Ship & 3PL
Grow
â⯠Utilize a Distributed Supply Chain of Drop-Ship & 3PL
Key Next StepsâŚ
26. Thank you for Attending
Please feel free to send any questions.
pbrisson@commercehub.com
518.810.0700 x3912