E-Logistics and E- Supply Chain

Management

By
Dr. Nguyen Van Hop
1
Expected learning outcome

· Understand the differences between

traditional Supply Chain Management
(SCM) and e-SCM.
· Apply various techniques to solve e-
SCM problems.
 Course outline
· Introduction to e-SCM.
· E-SCM models and strategies: e-
Marketplace, VMI, e-Tailer, etc.
· E-SCM functions: e-CRM, e-
Procurement, e-Warehousing, e-
delivery,…..
· E-SCM problems and tools in OR
 Learning materials
·Textbooks:
- Dave Chaffey, E-Business & E-Commerce Management:
Strategy, implementation, and practice, 5th ed. Harlow: Pearson
Education Limited, 2011.
- David F. Ross, Introduction to E-Supply Chain Management:
Engaging Technology to Build Market – Winning Business
Partnerships, St.Lucie Press, 2003.
- Yingli Wang and Stephen Pettit, e-Logistics: Managing your
digital supply chains for competitive advantage, KoganPage,
2016.
·Lecture notes
 Assessment

• HWs, Quizs:
15%
• Group project: 15%
• Mid-term exam (open book) 30%
• Final exam (open book) 40%
Chapter 1: Introduction to E-Logistics and
E-Supply Chain Management
1. SCM Rewind
2. E-SCM Definition
3. E-SCM (B2C) Process
4. Information Technology Evolution
 1. SCM Rewind Ocean

Customs
Agent liner

Supplier Plant Port

Roadways Roadways Airways Road
+

+ Rail

Home Consumer Customer Customer’s RDC

(Retailer) Warehouse Roadways
 SCM Rewind (cont.)
¨ SCM is a set of approaches utilized to efficiently integrate
suppliers, manufacturers, warehouses and stores, so that
merchandise is produced and distributed at the right quantities,
to the right locations, and at the right time in order to minimize
systemwide costs while satisfying service level requirements
(Simchi-Levi, Kaminsky and Simchi-Levi, 2008)
¨ Logistics is that part of the supply chain process that plans,
implements, and controls the efficient, effective flow and
storage of goods, services, and related information from the
point-of-origin to the point-of-consumption in order to meet
customers’ requirements (Council of Logistics Management )
 SCM Stages
Warehousing & Weak internal
Transportation linkages
• Operations
between
performance
• Inventory control
logistics function
• Transportation
efficiencies

60s

First stage
 Second stage

Warehousing &
Transportation
• Operations
performance
• Inventory control
• Transportation
efficiencies

60s 80s

Application of
Total Cost computer, The rising
Management of new management
• Logistics as a methods (JIT, zero
competitive inventory, quality
advantage management)
• Customer service
 Third stage

Integrated Logistics Support for

Warehousing &
Transportation Management TQM, expansion
• Operations • Logistics planning of logistics
performance • SC strategies management
• Inventory control • Integrations with functions
• Transportation channel ops
efficiencies functions

60s 80s 90s

Total Cost
Management
• Logistics as a
competitive
advantage
• Customer service
 Fourth stage

Warehousing & Integrated Logistics

Transportation Management
• Operations • Logistics planning
performance • SC strategies
• Inventory control • Integrations with
• Transportation channel ops
efficiencies functions

60s 80s 90s 00s

Deployment of
channel optimization
Supply Chain
Total Cost software (ERP,
Management
Management CRM), and
• Use of extranet
• Logistics as a
technologies communication
competitive enabling tools (EDI)
Collaboration to
advantage
• Customer service leverage channel
competencies
 Fifth stage
e-Supply Chain
Warehousing & Integrated Logistics
Management
Transportation Management • Internet-enabled
• Operations • Logistics planning
• SC strategies collaborative channel
performance
• Integrations with partnership
• Inventory control • Application of e-
• Transportation channel ops
business
efficiencies functions
technologies

60s 80s 90s 00s 00+

Supply Chain
Total Cost
Management
Management • Use of extranet
• Logistics as a
technologies
competitive • Collaboration to
advantage
• Customer service leverage channel
competencies
 2. E-SCM Definition
E-SCM = Internet + SCM
¨ E-SCM is a tactical and strategic management philosophy that
seeks to network the collective productive capacities and resources
of intersecting supply channel systems through the application of
Internet technologies in the search for innovative solutions and the
synchronization of channel capabilities dedicated to the creation of
unique, individualized sources of customer value. (David F. Ross,
2003)
¨ E-logistics: the use of information and communication technology to
support the provision and execution of a broad range of logistics
activities in Supply Chains
e-SCM enables enterprises to form customer-winning
relationships with SC partners
seconds or minutes

Public E-Commerce
Internet Integration Software

E-Catalogs,
Consumer E-Procurement,
Messaging, EDI, ERP Packaged
E-Payments,
Interactive Apps. Application Changes in
technology
drive the
fulfillment
processes
faster

Retailer Warehouse Courier Manufacturer

E-Logistic Available
to promise
E - file transfer / EDI
days or weeks
 Other Definitions
¨ E-Business:  all of the business relationships that exist
between trading partners driven by and operating with the
Internet. Activities: market research, through collaborative
product development, and ending with billing, payment, and
channel transaction and data analytics
¨ E-Commerce: the process of performing transactions utilizing
the Internet. Actions: placing and receiving orders over the
Web, activities happening in the supply channel.
¨ E-Fulfillment: the activity of physically delivering products and
services placed in the network supply system through e-
commerce transactions
 E-SCM characteristics
e-SCM extends the function of information

Crowdsourcing model - Delivery technology solution

for last-mile problem
 Needs for e- SCM
¨ Avoid costly disasters
¨ Reduce administrative overhead
¨ Reduce unnecessary inventory (thereby increasing
working capital)
¨ To make it a more efficient channel
¨ Speed up production and responsiveness to consumers
¨ To gain higher profit margins on finished goods
3. E- Supply Chain (B2C) Process

1 – Method of payment
2 – Check product
availability
3 – Arrange shipments
4 – Insurance
5 – Replenishment
6 – Contact with
customers
7 – Returns
 Payment Methods

¨ Possible payment methods:

¨ At the time of order: e-payment (e.g. PayPal), credit card
¨ At the time of delivery: COD
¨ For electronic payments, a system of verification of
payment is needed before shipping
 Check product availability
¨ If possible, inform
customer of availability
before order is placed.
¨ If out of stock or the
product will take time to
manufacture, inform
customer of the delay.
 Arrange shipments
¨ Electronic shipping – quick and immediate

¨ Physical product – determine best shipping

method for level of service

¨ It is the biggest activity (labor, energy, money,

etc.) for E-Logistics
 Insurance
¨ This option needs to be available for customers since
product can be lost or damaged in the shipping
process.
 Replenishment
¨ This is an overview step. It should be examining all
aspects of physical inventory at a location and
reordering as needed:
¨ Product – product sitting on shelves or material to
manufacture product
¨ Non-product – shipping materials, parts for machines in
process, items that are part of the shipping process
(scanners, totes, carts, etc.)
 Contact with customer
¨ With an invisible process (back-door operations), the
customer needs to be informed as much as possible.

¨ Most common types of communication:

¨ Order confirmation
¨ Payment success
¨ Shipping confirmation
¨ Tracking information
¨ Any problems in the process
 Returns
¨ The flow of product from customer back to the
vendor is called reverse logistics.

¨ Possible reasons for customers to return or

exchange product:
¨ Damaged
¨ Doesn’t work
¨ Don’t like it
¨ Wrong product/type/color
4. Information Technology Evolution
 Traditional approach
Material and Information flow

Raw Key Outlet

Manufacturer Distributor Consumer
Materials Supplier Retail

Material flow Information flow

 Information Integration

Key Raw
Supplier Materials

Manufacturer Consumer

Outlet
Distributor Retail

Material flow Information repository Information flow

Communication plays an important role in information flow

 Major Development Trends

¨ Connectivity (between people, applications and

devices);
¨ Capacity for distributed storage and processing
of data;
¨ Reach and range of information transmission;
¨ Rate (speed and volume) of information
transmission.
 Social Media
¨ Social media acts as a digital platform for people to
interact to create, share and exchange information
and ideas in virtual communities and networks.
¨ Common social media
¨ Blogs, microblogs
¨ social networking sites: Facebook, LinkedIn, Twitter and
Instagram
¨ Wikis and video- or content-sharing sites
 Big Data and IoTs
¨ IoTs: the pervasive presence around us of a variety of things or
objects – such as RFID tags, sensors, actuators and mobile
phones – which are linked through wired and wireless networks
and are able to interact with each other, often using the same
internet protocol (IP) that connects the internet  ‘sensor data’.
¨ Big data: datasets whose size is beyond the ability of typical
database software tools to capture, store, manage and analyze.
¨ Big data attributes:
¨ volume: scale of data;
¨ velocity: analysis of streaming data, velocity as the rate at which data arrives
at the enterprise and the time that it takes the enterprise to process and
understand that data;
¨ variety: different forms of data: structured and unstructured;
¨ veracity: uncertainty of data, refers to the quality or trustworthiness of the
data.
Building an E-Logistics Capability

People

Process Technology
 Homework 1

¨ Case: Amazon vs. Alibaba

¨ What are their market (products, customers)? What are
the differences?
¨ How do they perform e-fulfillment? What are the
differences?