3rd party logistics

The business models of e-fulfillment are shaped by two factors customer preferences (home delivery, store pick up), and supply sources (warehouse, stores, 3rd party, consolidators). As shown in Fig. 5.12, home delivery can be fulfilled from all the four sources of supply, whereas, store pick up would rule out the warehouse and the 3rd party service provider. The suppher stmctures the fulfillment system by creating a new logistics infrastructure, or by adapting the existing processes. 

Companies may also use some of the following approaches (discussed in Chap. 6) use drop-shipping where contract manufacturers directly ship the finished products to customers, and use 3PL services with merge-in-transit capability. The distribution centers may also be owned and operated by 3rd party service providers. Vendor managed inventory (VMI) with its proximity to the customer, would be very effective from distribution centers. To implement merge in transit, the logistics partner would pick up the major components of an order (such as the CPU and monitor) from different contract manufacturers and assembles them while in... 

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