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Landed Cost Engines
➢ Exchange calculators
➢
Duty calculators
➢ Tax calculators
➢ Shipping cost engines
➢ Exception handling
Customer Service Suites
➢ Email handling
➢ Call routing and tracking
➢ Customer relationship management
➢ Fulfillment house messaging
➢ Help desk applications
➢ Workflow management
Major Characteristics of E-Commerce that Impose New Requirements
on Logistics Services
➢ Larger number of small parcels or packages due to a larger number
of buyers making direct orders and a larger number of sellers than
in traditional trade;
➢ Large numbers of on-line customers, mostly unknown to the sellers;
➢ Demand for shipments is much more unpredictable and unstable
since it originates from more numerous customers;
➢ Origins and destinations of shipments are more widely dispersed,
given that more buyers place direct orders with producers and
distributors and more sellers access buyers globally;
➢ Accountability for shipments extends through the entire supply
chain, compared with traditional logistics
in which accountability
is limited to single links of the supply chain;
➢ Customers have high expectations about quality of services and
demand fast delivery of shipments;
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➢ Higher incidence of cargoes returned to the supplier than in
traditional trade;
➢ Greater demand for and availability of information covering
transactions over entire supply chain, thus allowing on-line
shipment tracking and other supply chain management functions;
➢ Greater focus on one-to-one marketing, which creates demand for
customized delivery and post-transaction
customer services;
➢ Greater complexity in fulfilling international orders than in
traditional trade, thus preventing some retailers and service
providers from being involved in international e-commerce;
➢ The emergence of demand for on-line processing of shipments,
including cargo booking, bills of lading/airway bills, freight
payment, rate quotation, landed price calculations and tariff
management;
➢ Substantial increase in the volume of small shipments, leading to
growth of demand for warehousing transport and other logistics
infrastructure that can handle larger volumes of small shipments;
➢ Greater scope for customer self-service.
As defined by the Council of Logistics Management in 2004,
logistics is that part of supply chain management that plans, implements
and controls the efficient, effective forward and
reverse flow and storage
of goods, services and related information between the point of origin and
the point of consumption in order to meet customer requirements
In the second phase, e-commerce stage, opportunities are opened
for transactions. Transactions are the core elements in commercial
activities. A transaction consists of two major parts: transaction creation
and transaction fulfillment. In the digital economy transaction creation is
done over the Internet which usually leads to reduced transaction costs.
E-commerce can be divided into two separate areas: B2C and B2B with
different e-logistics requirements.
The key words of the digital economy can be summarized to contain
the following key-words: speed, flexibility,
connectivity, interactivity, and
intangibles. The advent of this new digital economy has triggered a new
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type of logistics, which we will denote e-logistics
.
We will define e-logistics
as holistic solutions integrating information- and communication
technology (ICT) and logistics in the new strategic landscape opening up.
E-logistics can also be seen as the physical fulfillment of the new
transaction possibilities created through e-business. The agile and flexible
logistics designed for the digital economy, the e-logistics,
can be regarded
as the third phase in the evolution of logistics, following military and
business logistics (Ericsson, 2000)
According to Linster, there are seven key steps to implementing a
successful elogistics strategy. A synthesis of those steps is below:
1. Understand the potential of your partner network.
2. Identify core competencies.
3. Integrate internal business applications.
4. Implement a trading partner portal/extranet
5. Create complete and coherent processes with your partners
6. Implement “visibility applications.” By “visibility applications”
7. Focus on “command and control” after implementing the eLogistic
strategy. A successful system is continuously monitored and
modified as business demands.
The challenge confronting e-logistics include the need to overcome
➢ Poor transaction management
➢ Persistent overcapacity in inventory that result in low returns,
markdowns, shrinkage and write offs
➢ Demand imbalances that can cause frequent out-of-stocks
➢ Slow fulfilment cycle times that when
coupled with poor revenue
management systems cause unsatisfactory variations between
income and expenditure patterns
➢ On-time delivery problems
➢ Lack of differentiation between logistics service providers
➢ Obsolete technologies that can no longer be incrementally improved
➢ Inter-operability problems between online and back-end systems
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within and between different companies
➢ Overcoming fragmentation of shipping management
➢ Declining service quality and customer satisfaction levels
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