-System limited inventory costs and decreases lead time by decreasing storage time. -Difficult to Manage:
1.Distribution centers retailers, and suppliers must be linked with advanced information system to ensure that all pickups and deliveries are made within the required time windows. 2.A fast and responsive transportation system is necessary for cross-docking system to work. 3.Forecasts are critical, necessitating the share of information 4.Cross-docking strategies are effective only for large distribution systems in which a large number of vehicles are delivering and picking up goods at the cross-dock facilities at any one time.
1.Focus on Core Strengths
- 3PL provide a company with the opportunity to focus on that company’s particular area of expertise.
2.Provide Other Flexibilities
-Flexibility in geographic location
-. provide for warehousing a company meet customer requirements within committing capital and limiting flexibility by constructing a new facility or committing to a long-term lease.
- It is necessary to employ advanced technology, which is often expensive. -It is essential to develop trust in what once may have been an adversarial supplier – retailer relationship. -In a strategic partnership the supplier often has much more responsibility than formerly. -Expenses at the supplier often increase as managerial responsibilities increase.
Push – Based Supply Chain
-Inability to meet changing demand patterns.
-Obsolescence of supply chain inventory as demand for certain products disappears. -Excessive inventories clue to the need for large safety stock. -
-Large and more variable production batches.
-Unacceptable service levels
Pull – Based Supply Chain
-Decrease in lend times achieved through the ability to better anticipate incoming order from the retailers. -Decrease in inventory at the retailers...