B2B Integration : A Practical Guide to Collaborative E-commerce

Downstream activities
Supply Chain Management (SCM) 415
Last but not least, downstream activities of a supply chain involve the
distribution of the finished product to the distributors for sale to the end
consumers. In the downstream activities, logistics function plays a vital
role. It includes transportation management — selecting and managing
the internal and external fleet of carriers, packaging, warehousing and
handling of finished products at the warehouses and retail outlets
receiving them. All these activities are integral and need strong links
with one another to maintain the flow of supplies unobtrusively.
14.3. Legacy Supply Chain
Let's review the definition and limitations of a legacy supply chain.
14.3.1. Push-based supply network
A legacy supply chain is primarily forecast driven, which relies on
push-based supply network for the procurement of materials.
In a push-based supply network, the materials department procures,
based on the marketing forecasts; the production department produces,
based on the production cycle demand; and the distribution department
distributes according to the replenishment demand (see Figure 14.4). A
forecast is after all based on expectations, subject to various factors in
the market. This may be faulty, as the gap in the expected and the real
may lead to accumulated inventories or shortage of materials.
Materials
Supply
Campaign
Demand
Production Distribution Consumption
Production
Demand
Push
Repl eni shm ent
Demand
Figure 14.4. — Push-based supply chain
Consumer
Demand