Strategic Evolution of Fulfillment in B2B Communications

How distribution has changed and what you need to know to think strategically about this important supply chain function


The Council of Supply Chain Management Professionals (CSCMP) uses the following words to define Logistics and the related management activities involved with the process: "Logistics is that part of the supply chain process that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers' requirements. Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third-party logistics providers."

This definition implies that logistics is a complex, multi-faceted topic, and one that, for leaders in business today, cannot be ignored.

Historically, logistics has been considered to be the "back end" of an operation, a necessary cost, after everything else in a fulfillment initiative has been decided. The important aspects of the activity have been determined — all the conceptualizing, the creative work, the database management and the overall strategic thinking. At this point, anyone can handle the distribution. Right? Wrong.

The Turning Point

Less-than-stellar distribution processes during the dot-com era brought distribution to the forefront as a vital function. The industry's perception of this function was further altered because of an increasingly technologically oriented marketplace and the realization that distribution is indeed a place where strategic imperatives, such as brand building, maintaining a relationship and driving out costs, can be achieved. And although this recognition may have come because of the impact and negative impressions left on consumers, the exact same concerns can be applied to a business-to-business audience as well.

Astute marketers now consider distribution to be just as important as any other component of a marketing initiative. An obvious example of this is that the Internet has been incorporated into distribution processes, resulting in strategic, or integrated, fulfillment systems.

Distribution has also evolved from a strictly "push" model to include a "pull" process as well. The push method is the traditional approach to distribution, which relies on anticipating and calculating needs of an intended audience, determining a schedule for distribution and then executing a process based on this information. It typically involves gathering the names of recipients, performing some database work, maintaining an inventory of items to be distributed, and packing and shipping in a somewhat routine way.

A pull system, on the other hand, requires eligible users — dealers, retailers or sales representatives, for example — from various locations to log in to a central Internet portal and select materials or items that they want. These items are then fulfilled upon request. From a technology perspective, the pull process is more complex, involving the development of a central Web site, or "electronic store." The site features a searchable catalog with descriptions and photos of each item, quantity in stock and the cost, if applicable. Components of the process include: an inventory of materials to be distributed, electronic files of materials to be produced on demand, on-site digital print resources for immediate production, and packing and shipping. Depending on whether a requestor of items assumes the cost of materials, there may be a billing process established by the manufacturer.

Advantages of Each

While the push and pull methods each have their benefits, for companies the preferred distribution scenario may be a blending of the two methods, depending on the actual items or materials that need to be distributed, the expense of the materials, the time frame needed for replenishment and the actual distribution processes established.

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