LAHORE COLLEGE FOR WOMEN UNIVERSITY

SUBMITTED BY:

AYESHA WAQAR 1925106007

JAVERIA ASLAM 1925106018

SESSION:
BBA VII (2019-2023)

SUBMITTED TO:

Ma’am ASVIR

DEPARTMENT OF MANAGEMENT SCIENCES

 SUPPLY CHAIN MANAGEMENT

ASSIGNMENT

DESIGN OPTIONS FOR A DISTRIBUTION NETWORK

Manufacturer Storage with Direct Shipping and In-Transit Merger:

In-Transit Merger: is a distribution method in which several shipments from

suppliers originating at different locations are consolidated into one final customer
delivery. This removes the need for distribution warehouses in the supply chain,
allowing customers to receive complete deliveries for their orders. Under a merge-
in-transit system, merge points replace distribution warehouse.
In today's global market, merge-in-transit is progressively being used
in telecommunications and electronic industries. These industries are usually
dynamic and flexible, in which products have been developed and changed rapidly
It combines pieces of the order coming from different locations so that the
customer gets a single delivery.

Inventory –as with drop-shipping, the ability to aggregate inventories and postpone
product customization is a significant advantage of in-transit merge.
Transportation –although an increase in coordination is required, merge in transit
decreases transportation costs relative to drop-shipping by aggregating the final
delivery.
Facility and handling –facility and processing costs for the manufacturer and
retailer are like those for drop-shipping. The party performing the in-transit merge
has higher facility costs because of the merge capability required.
Information –The investment in information infrastructure is higher than for drop-
shipping. In addition to information, operations at the retailer, manufacturers, and
the carrier must be coordinated.
Response time, product variety, availability, time to market– like drop-shipping.
Response times may be marginally higher because of the need to perform a merge.
Customer experience –better than with drop-shipping because the customer
receives only on delivery for an order instead of many partial shipments.
Order visibility –important requirement. Initial setup is difficult, however, tracking
itself becomes easier because of the merge that occurs.
Return ability–similar to that with drop-shipping
Manufacturer storage with in-transit merge is best suited for low- to medium-
demand, high-value items the retailer is sourcing from a limited number of
manufacturers.

Merge-in transit has various advantages comparing to the traditional method,

which includes the following:
1. Lower Transportation Cost
2.Improved Customer Service
3.Lower Effort During the Merge

Merge-in transit has several disadvantages over the traditional way, which
includes the followings:
1. Additional Effort During the Merge
2.Difficult to Coordinate and Implement
EXAMPLE: Furniture retailers merge couches and coffee tables produced by
different manufacturers.