Demand Management Opportunities in E-fulfillment: What Internet Retailers Can Learn from Revenue Management

In this paper, we explain how Internet retailers can learn from proven revenue management concepts and use them to reduce costs and enhance service. We focus on attended deliveries as these provide the greatest opportunities and challenges. The key driver is service differentiation. Revenue management has shown that companies can do much better than a one-size-fits-all first-come-first-serve strategy when selling scarce capacity to a heterogeneous market. Internet retailers have strong levers at their disposal for actively steering demand, notably the offered delivery time windows and their associated prices. Unlike traditional revenue management, these demand management decisions affect both revenues and costs. This calls for a closer coordination of marketing and operations than current common practice.ketenbeheer;revenue management;home delivery;E-fulfillment;demand management;marketing-operations interface

An analysis of current supply chain best practices in the retail industry with case studies of Wal-Mart and Amazon.com

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2005.Includes bibliographical references (leaves 184-188).In support of the Supply Chain 2020 Project at MIT, this thesis identifies current best practices in retail industry supply chains, with a specific focus on mass merchandising and Internet retailing. Using a survey of current literature for context and industry expert interviews, this thesis assesses the current state of the retail industry and analyzes case studies of Wal-Mart and Amazon.com to illustrate retail supply chain best practices. Topics covered in each case study include supply chain strategy and business strategy linkage, operating models, supply chain design, replenishment and distribution processes, and ongoing supply chain improvement initiatives. Wal-Mart and Amazon.com are found to have very different supply chains in terms of structure and processes, based on their different operating models. However, there are many supply chain themes that are common among the two companies. Both case study companies have supply chain strategies, designs, and processes that clearly support their business strategies. Additionally, these companies tailor processes to fit specific product and demand profiles, collaborate extensively with supply chain partners, invest significantly in information technology, focus on operational efficiency, and leverage scale to facilitate competitive advantage through supply chain management. Based on the common and unique aspects of Wal- Mart and Amazon.com's supply chains, we provide recommendations for the potential transferability of Wal-Mart and Amazon.com practices within the retail industry and to other industries.by Colby Ronald Chiles and Marguarette Thi Dau.M.Eng.in Logistic

Does B2C online logistics service quality impact urban logistics?

This paper reports on an in-progress research study regarding the impact of business to consumer (B2C) online logistics service quality (OLSQ) for shopper satisfaction and loyalty on urban logistics across the UK, France and Germany to also investigate country-specific differences of consumer online shopping behaviour and channel strategies. A two-stage approach is adopted consisting of firstly of qualitative research conducted with managers at the producer/retailer interface and secondly a quantitative survey stage targeting consumers as online shoppers to determine how their expectations of OLSQ and associated activities influence their satisfaction and ongoing loyalty. This study should contribute theoretically by considering a B2C setting for OLSQ, which is the final aspect of point-of-origin to point-of-consumption, as most general literature on these topics has been dominated by business to business (B2B) logistical designs, and also identify any discrepancies between consumer expectations or behaviour as it may affect urban logistics solutions. Further, this study should contribute practically by providing managers with an understanding of the components of OLSQ considered critical by consumers

オムニチャネル小売業におけるファッション商品の品切れに対する対応のモデル化分析

筑波大学 (University of Tsukuba)201

The Impact of E-Tailing on Inventory Management

Background In traditional retailing, where the challenge lies in providing goods in a store with limited space while minimizing tied up capital and obsolescence, good inventory management is often an important competitive advantage. However, the emergence of the online channel changes some of the challenges, and the associated requirements on inventory management. These dierences are studied in this thesis project. Purpose The purpose of the thesis project is to study how e-tailing as a market channel impacts inventory management in a company. Methodology In order to fulll the purpose, a multiple case study was used. In each case study, interviews were conducted and annual reports were studied. The general approach was to examine the eects of e-tailing as a market channel and how they impact inventory management. Conclusions For pure e-tailers, centralizing inventory reduces the inventory management complexity signicantly. This enables them to implement various activities that attract customers, but increase the complexity and risks. Mature e-tailers seem to have well-developed policies to mitigate risks whereas etailers experiencing rapid growth seem less concerned about how their activities aect the complexity of inventory management. Furthermore, multi-channel retailers face a number of decisions that potentially can create synergy eects in their inventory management

The Future of Retail Operations

Retailing consists of all the activities associated with the selling of goods to the final consumer. In this article, we review the research on retail operations published in Manufacturing & Service Operations Research (M&SOM) since 1999. We then discuss the current retail landscape and the new research directions it offers, in which M&SOM can play a prominent role

Online Grocery Operations in Omni-channel Retailing:Opportunities and Challenges

Online grocery has grown rapidly in different parts of the world over the last two decades. However, it is still not clear whether online grocery retailing can be profitable in the long run. Grocery retail is a low margin, high-cost business. Picking and delivering an online grocery order is labor intensive and costly. The delivery fee typically does not cover all the fulfilment costs. Many grocery retailers are making substantial investments to develop an online sales channel next to the traditional stores. With the emergence of omnichannel grocery retail, customers are provided with a seamless experience across online and offline channels. There are many synergies that exist between online and offline distribution, which if utilized properly can lead to significant cost savings to the retailer

An Optimistic-Robust Approach for Dynamic Positioning of Omnichannel Inventories

We introduce a new class of data-driven and distribution-free optimistic-robust bimodal inventory optimization (BIO) strategy to effectively allocate inventory across a retail chain to meet time-varying, uncertain omnichannel demand. While prior Robust optimization (RO) methods emphasize the downside, i.e., worst-case adversarial demand, BIO also considers the upside to remain resilient like RO while also reaping the rewards of improved average-case performance by overcoming the presence of endogenous outliers. This bimodal strategy is particularly valuable for balancing the tradeoff between lost sales at the store and the costs of cross-channel e-commerce fulfillment, which is at the core of our inventory optimization model. These factors are asymmetric due to the heterogenous behavior of the channels, with a bias towards the former in terms of lost-sales cost and a dependence on network effects for the latter. We provide structural insights about the BIO solution and how it can be tuned to achieve a preferred tradeoff between robustness and the average-case. Our experiments show that significant benefits can be achieved by rethinking traditional approaches to inventory management, which are siloed by channel and location. Using a real-world dataset from a large American omnichannel retail chain, a business value assessment during a peak period indicates over a 15% profitability gain for BIO over RO and other baselines while also preserving the (practical) worst case performance