Electronic supply chains. Virtual warehouse and direct delivery strategy

Let us recall that e-business technologies enable the separation of two streams occurring in the supply chain –

the product flow stream and the information flow stream –

which remain in close interdependence in a traditional chain. Thanks to this, the manufacturer gains the possibility of a new organization of the supply chain, in which they maintain their advantageous position at the beginning of the product flow stream, while changing their disadvantageous position at the end of the information flow stream to a position located closer to the end customer.

The considered model is presented in Fig. 1. The model includes a virtual warehouse, created and controlled by the manufacturer, and a strategy of direct deliveries to retail, bypassing the physical warehouse. The red arrow indicates the flow of orders, the black one –

the flow of goods. The virtual warehouse is an IT system that allows retail stores to place orders via the Internet directly with the manufacturer. A centralized order collection system enables the manufacturer to globally optimize distribution. The manufacturer can group orders and organize direct transport to several retailers who have independently placed their orders. In another variant, the execution of distribution can be entirely outsourced to an external logistics company that uses modern distribution techniques and performs global optimization of orders coming from many independent manufacturers. By eliminating the physical warehouse and optimizing distribution, the manufacturer captures the wholesaler’s profit and converts the wholesaler’s own costs, in particular storage, personnel, and administrative costs, into their own profit.

Constant contact with retail allows the manufacturer to improve quality, shorten time, and reduce the costs of market research, and offers the possibility of effective and inexpensive promotion.