The Shipping Point: The Rise of China and the Future of Retail Supply Chain Management

CHAPTER THIRTEEN

INNOVATIVE RETAIL SUPPLY CHAIN PROCESS FLOWS

PETER LEVESQUE

There are three main export retail supply chain flows that are most common out of China today and each of these flows has varying degrees of complexity. The most common program is the outbound origin consolidation process, which Michael Jacobs describes in great detail in chapter eleven. This export consolidation procedure typically utilizes an international LSP to manage the export business process using the retailer's purchase order data as the driver of the physical export operation. A description of the most common outbound consolidation process flow is shown in Figure 13.1.

DIRECT-TO-STORE FLOW

After the basic export consolidation program, the next level of complexity for retail SCM in China is a distribution center (DC) bypass or a direct-to-store model, as shown in Figure 13.2. This supply chain process calls for the building of store-ready containers at the manufacturing point of origin that contain a proper mix of products as required by an individual retail store location. The retailer utilizes the ocean carrier's inland IPI pricing leverage to create a low-cost store-door delivery option.

ORIGIN DIRECT TO CUSTOMER

The most advanced retail supply chain process from China, as shown in Figure 13.3, is the direct-to-customer model, which requires that retailers tap into the LSP's domestic home delivery expertise on the last-mile delivery part of the process. Customer-specific address labels are ...