Garden.Com Case Study
Supply Chain Management Individual assignment 2012/ 12/ 11
Garden.com At the End of the Runway
Linda Schädler Student ID: 1202010203
1. Garden.com’s supply chain
Garden.com’s business model is based upon its virtual supply chain which provides customers with a convenient location for one-stop shopping. Garden.com’s supply chain includes four different actors: Suppliers, retailer (Garden.com itself), end-customers and Fedex. The company fulfils the function of a facilitator that acts as a bridge connecting suppliers and end-customers. With regard to the design of Garden.com’s supply chain, two different kinds of structures can be distinguished. These will be presented in the following.
The structure depends on the respective product attributes, the volume and the relationship with the supplier. When it comes to garden supplies and further related products, Garden.com has opted for two different approaches: In the first case, the product comes from the supplier and passes Garden.com’s distribution centre where it is kept as inventory until it finally reaches the customer. However, Garden.com only maintains a nominal inventory for a few products like specialty gifts, promotional merchandise and some safety stock for high-volume products. In the second case, the supplier ships the product directly to the customer. Garden.com acts as intermediary, but the product never passes its warehouse and the company never holds its possession. Garden.com merely transfers the customer order to the supplier. This is called “drop shipping”. Highly perishable goods such as live plants, flowers and bulbs are usually directly shipped by the supplier to the end-costumer.
All in all, drop shipping predominates. Thus, in most cases, Garden.com’s involvement is limited on being a consolidator of information whereby its own physical involvement is minimised. Information flow between Garden.com and its suppliers is via extranet. The physical transportation of the goods is
Garden.com At the End of the Runway
Linda Schädler Student ID: 1202010203
1. Garden.com’s supply chain
Garden.com’s business model is based upon its virtual supply chain which provides customers with a convenient location for one-stop shopping. Garden.com’s supply chain includes four different actors: Suppliers, retailer (Garden.com itself), end-customers and Fedex. The company fulfils the function of a facilitator that acts as a bridge connecting suppliers and end-customers. With regard to the design of Garden.com’s supply chain, two different kinds of structures can be distinguished. These will be presented in the following.
The structure depends on the respective product attributes, the volume and the relationship with the supplier. When it comes to garden supplies and further related products, Garden.com has opted for two different approaches: In the first case, the product comes from the supplier and passes Garden.com’s distribution centre where it is kept as inventory until it finally reaches the customer. However, Garden.com only maintains a nominal inventory for a few products like specialty gifts, promotional merchandise and some safety stock for high-volume products. In the second case, the supplier ships the product directly to the customer. Garden.com acts as intermediary, but the product never passes its warehouse and the company never holds its possession. Garden.com merely transfers the customer order to the supplier. This is called “drop shipping”. Highly perishable goods such as live plants, flowers and bulbs are usually directly shipped by the supplier to the end-costumer.
All in all, drop shipping predominates. Thus, in most cases, Garden.com’s involvement is limited on being a consolidator of information whereby its own physical involvement is minimised. Information flow between Garden.com and its suppliers is via extranet. The physical transportation of the goods is