DELIVER EXAM 3

last mile delivery

Most expensive part of the supply chain; final step delivering to customer

e-commerce

Harder than expected due to small orders, more picking, packaging, returns, and high last mile costs

OTIF

On-Time In-Full; measures if orders are delivered on time and complete

stockouts

When inventory is unavailable; leads to lost sales and poor customer experience

material handling

How products physically move through a facility

material handling core functions

Movement, Storage, Control, Protection

warehouse management system (WMS)

Software that controls and tracks warehouse operations (receiving → shipping)

why WMS matters

Improves accuracy, efficiency, and real-time visibility of inventory

WMS core functions

• Receiving

• Put-away

• Inventory tracking

• Picking

• Packing

• Shipping

• Reporting

ERP

Central system managing company-wide data (finance, inventory, etc.)

system integration

ERP + WMS + TMS + OMS work together to fulfill orders end-to-end

cross docking

Products move directly from inbound to outbound with little/no storage

why cross dock

Reduces storage cost, speeds up flow, used for high-velocity items

inbound logistics

Goods coming INTO warehouse (receiving, unloading)

outbound logistics

Goods leaving warehouse (picking, packing, shipping)

which side uses more labor?

Outbound (picking + packing is labor intensive)

warehouse process flow

Receiving → Put-away → Storage → Picking → Packing → Shipping

order picking

Most expensive and labor-intensive warehouse activity (up to 55%)

velocity

How fast a product sells or moves through the warehouse

ABC analysis

A = high value/high velocity, B = medium, C = low

golden zone (strike zone)

Waist to shoulder height; easiest and fastest picking area

decanting

Breaking bulk shipments into smaller units for easier picking

tie & high

• Tie = cases per layer

• High = number of layers

• Total = Tie × High

FIFO

First In First Out; used for perishable goods

LIFO

Last In First Out; used when newest inventory sells first

warehouse layouts

• U Flow = same side docks

• I Flow (Through) = straight line

• L Flow = angled flow

centralized network

Fewer warehouses, lower cost, slower delivery

decentralized network

More warehouses, faster delivery, higher cost

tradeoff (warehousing)

More DCs = faster delivery but higher cost + inventory

AS/RS

Automated Storage & Retrieval System; high efficiency but VERY expensive

automation tradeoff

High cost vs. high efficiency and speed

amazon competitive advantage

Convenience, selection, low price, fast delivery, service

amazon flywheel

Better experience → more customers → lower cost → growth

amazon facilities

• Fulfillment centers

• Sortation centers

• Delivery stations

• Prime hubs

sortation centers

Organize packages before final delivery → improves routing efficiency

1P

Amazon buys and sells inventory

Pros:

• Control pricing & experience

Cons:

• Inventory risk, lower margins

3P

Independent sellers sell on Amazon

Pros:

• No inventory risk

Cons:

• Less quality control

FBA (fulfilled by amazon)

Amazon stores, picks, and ships for sellers

vertical integration (amazon)

Amazon controls more of supply chain (warehouses, trucks, delivery)

Downside:

Expensive + complex

why amazon invests so much

• Faster delivery

• Customer loyalty (Prime)

• Scale

• Logistics control

why scale matters

• Spread fixed costs

• Better supplier pricing

• Invest in tech

• Expand reach

amazon challenges

• Coordination complexity

• Demand variability

• System discipline needed

circular economy

Design → Use → Return → Recycle

cradle to cradle

Goal = zero waste system

scope 1 emissions

Direct emissions (company vehicles/facilities)

scope 2 emissions

Indirect (energy use)

scope 3 emissions

Entire supply chain (hardest to control)

sustainable transportation

Electric, hybrid, biodiesel vehicles

sustainable retail focus

• Packaging

• Last mile delivery

• Reverse logistics

ESG scorecards

Most common way to measure sustainability performance

3 pillars of sustainability

• Environmental

• Social

• Economic

carbon neutral

Offset emissions to balance impact

net zero

Reduce emissions as close to zero as possible

waste diversion

Reduce landfill use through recycling/reuse

greenwashing

Fake sustainability claims

Why E-commerce is harder than it looks

Smaller orders, more picking, more packaging, higher returns, higher last mile cost

Order Fulfillment Steps

Receive → Store → Pick → Pack → Ship

Manufacturer vs Distributor vs Wholesaler vs Retailer

• Manufacturer = makes product

• Distributor = moves product

• Wholesaler = bulk middleman

• Retailer = sells to customer

why use cross docking

Reduces storage cost, speeds delivery, improves flow