Distributor storage

FIGURE 4-8 Distributor Storage with Carrier Delivery... 

The information infrastructure needed with distributor storage is significantly less complex than that needed with manufacturer storage. The distributor warehouse serves as a buffer between the customer and the manufacturer, decreasing the need to coordinate the two completely. Real-time visibility between customers and the warehouse is needed, whereas real-time visibility between the customer and the manufacturer is not Visibility between the distributor warehouse and manufacturer can be achieved at a much lower cost than real-time visibility between the customer and manufacturer. 

Distributor Storage with Last-Mile Delivery... 

Distributor storage with last-mile delivery requires higher levels of inventory than the other options (except for retail stores) because it has a lower level of aggregation. From an inventory perspective, warehouse storage with last-mile delivery is suitable for relatively fast-moving items that are needed qnickly and for which some level of aggregation is beneficial. Auto parts required by car dealers fit this description. 

The information infrastructure with last-mile delivery is similar to that for distributor storage with package carrier delivery. However, it requires the additional capability of scheduling deliveries. 

Performance Characteristics of Distributor Storage with Last-Miie Deiivery... 

Inventory Higher than distributor storage with package carrier delivery. 

Facilities and handling Facility costs higher than manufacturer storage or distributor storage with package carrier delivery, but lower than a chain of retail stores. 

Manufacturer or Distributor Storage with Customer Pickup... 

Inventory costs using this approach can be kept low, with either manufacturer or distributor storage to exploit aggregation. W.W. Grainger keeps its inventory of fast-moving items at pickup locations, whereas slow-moving items are stocked at a central warehouse or in some cases at the manufacturer. 

The performance characteristics of manufacturer or distributor storage with consumer pickup sites are summarized in Table 4-5. The main advantages of a network with consumer pickup sites are that it can lower the dehvery cost and expand the set of products sold and customers served online. The major hurdle is the increased handling cost and complexity at the pickup site. Such a network is likely to be most effective if existing retail locations are used as pickup sites, because this type of network improves the economies from existing infrastructure. In particular, such a network can be effective for firms like Seven-Eleven Japan, Walmart, and W.W. Grainger, which have both a network of stores and an online business. Unfortunately, such... 

Response time Similar to package carrier delivery with manufacturer or distributor storage. Same-day delivery is possible for items stored locally at pickup site. 

Product variety Similar to other manufacturer or distributor storage options. 

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