ELogistics Essay Research Paper Is Ecommerce Creating

E-Logistics Essay, Research Paper

Is E-commerce Creating a More Efficient and Effective Logistics Industry.

Electronic commerce has revolutionized not only the way goods are sold, but how they are delivered. Customers demand products delivered at very high speed with complete order flexibility and convenience. Moreover, today’s online customers want to be able to track their order instantly, from the moment they place an order until the moment they receive it at their doorstep. With all new technologies customers became smarter. They want to be able to re-route shipments, determine delivery costs and time in transit, and break up their orders for multiple shipments to different addresses. All this implies that the shift of the power from the seller to the buyer has created a new era of expectations, and buyers—whether they are consumers or businesses won’t tolerate bad experiences such as partial shipment of goods, poor product return policies or timely back orders.

The most common form of logistics has traditionally been based on moving large shipments of items in bulk to select strategic customers in a few geographic locations. Shipments have been tracked by container, pallet, or other unit of bulk measurement, not by individual item or parcel. Manufacturers have backed up their trucks to loading docks at retail stores or distribution facilities, relying on those entities to deliver the goods through the final links of the supply chain to individual customer. Often the various links of the supply chain have had limited visibility into the operations of one another. The capability for end-to-end visibility of a package from manufacturer to customer has been virtually nonexistent in a traditional logistics environment.

With the beginning of electronic commerce traditional logistics has been radically transformed. Electronic commerce is demanding an active, high speed, approach to logistics. The typical electronic commerce customer is unknown entity who orders products on an individual basis, according to impulse, seasonal demand, price, and convenience. A manufacturer or online merchant must be able o customize an individual order and ship it directly to the buyer anywhere in the world. It’s also necessary to track the location of the item at any given time along the supply chain with handling customer inquiries, product return, and even offering gift wrapping—all at ten times the speed and at fraction of the cost of traditional shipping and fulfillment. Forrester Research sums up the vastly differing characteristics between commerce site logistics and traditional logistics. For example, whether for traditional logistics the average order amount is more than 1,000 items, it is less than 100 with commerce site logistics. The demand style and inventory/order flow in the first case is push and unidirectional, whereas with e-commerce logistics it is pull and bi-directional. Destinations for traditional logistics are concentrated with the stable consistent demand, whereas for e-commerce logistics destinations are highly dispersed with seasonal, fragmented demand. All these fundamental differences in traditional logistics versus commerce site logistics are representing a shift to future of e-logistics. Opportunities are arising along to better service customer, whether it is another business or a consumer.

E-commerce is a narrow term applied to the process of conducting simple transactions on-line. Electronic business, however, is the total integration of electronic processes throughout the critical functions of an enterprise. It is a total solution that takes into account e-logistics, e-fulfillment, supply chain optimization, enhanced customer satisfaction, and a combination of other tangible and intangible benefits. Designing, building and maintaining an e-business site involves both hard costs and soft costs. Which are usually allocated in three ways: infrastructure costs, direct project costs, and distributed costs. Hard costs include tangible good such as hardware, wiring, software, telecommunications lines, and the like. These are for the most part fairly easy to quantify and allocate. Soft costs include labor, training, loss or gain of sales opportunities and represent intangible factors that are difficult to quantify and hard to allocate. This basic principle of e-business today is being implemented in various size and type organizations conducting their businesses on-line, which have created a new environment for transportation and logistics.

E-businesses are forcing a fundamental shift in the structure and services of transportation and logistics businesses. Firms are transporting more on-line purchased goods and they are actually subordinating their individual business plans and identities that becoming an integrated part of their electronic business customers’ supply chain. One solution to this change is creation of extranet that links and allows trading partners—customers, warehouses, suppliers, drivers, rail partners—independent of their internal resources, efficient interaction with the supply chain. It is that information technology provides the underlying links as well as the logistics data collection and analysis platform for all these activities. There is myriad of examples outside of the companies that have established this kind of relationship within their supply chain coverage, making this efforts not inexpensive. That