E-COMMERCE SUPPLY CHAIN

Young Professionals chapterOctober 19th 2017

Presented by: Samanta Ruffo

What is E-Commerce? *

• Electronic commerce (ecommerce) is a type of business model, or

segment of a larger business model, that enables a firm or

individual to conduct business over an electronic network,

typically the internet.

*Source : Investopedia

• Electronic commerce operates in all four of the major market segments:

business to business, business to consumer, consumer to consumer and

consumer to business. Almost any product or service can be offered via

ecommerce, from books and music to financial services and plane tickets.

E-Commerce Supply Chain

Why this topic?

QUICK FACTS

• E-commerce started around 20 years ago: in July 1995, Jeff Bezos boxed

up the first book ever sold on Amazon.com from his Seattle garage.

Within its first 30 days of business, it sold books to online shoppers in all 50

U.S. states and 45 countries

• E-commerce sales worldwide will continue to grow in 2017, rising 23% to

reach US$2.3tn. According to eMarketer’s estimates, e-commerce sales

will account for one-tenth of total retail sales worldwide in 2017.

• Buyers in Asia Pacific continue to increase their spending on e-

commerce platforms. In 2017, retail e-commerce sales will total

US$1.4tn, an increase of 30% compared to 2016.

• Global e-commerce sales are expected to grow of the 141% between

2016 and 2021 *Source :eMarketer, Metaforespress

ROLE OF E-COMMERCE IN SCM

COST EFFICIENCY :

• E-commerce allows transportation companies of all sizes to exchange cargo documents

electronically over the internet.

• By using e-commerce, companies reduce costs, improve data accuracy, accellerate

business cycles and enhance customer services.

• E-commerce will give business more flexibility in managing the increasingly complex

movement of products and information between businesses, their suppliers and customers.

CUSTOMER ORIENTATION:

• E-commerce will help companies deliver better services to the customers, and lower their

operating costs.

• This gives instant shipping information access to anyone in the company, from any location(tracking at any point of the SC).

Advantages in E-Commerce

COMPANIES CAN:

• Have a global presence

• Improve competitiveness and quality

• Analyze customer interests

• Collect detailed information

• Shorten supply chain response times

• Realize substantial cost savings

• Create virtual companies

• Include smaller companies

• Time for delivery of physical products – fast delivery

• Supply and delivery uncertainty

• Perishable goods

• Privacy, security, payment, contract

• Shorten supply chain response times

• Returning goods (Reverse Logistics)

• Order fulfillment (order rate often exceeds ability to fulfill it)

• Inventory holding (outsourcing and costs)

• …

Constraints in E-Commerce

The Asian giant

*Source : www.ecommercefoundation.org/reports

Deliverymen are foot soldiers in a hard-fought

battle pitting Flipkart against domestic rivalSnapdeal.com and U.S. leviathan

Amazon.com, all tussling for dominance in a

market that Morgan Stanley expects to explode

by 2020.

In developed markets, purchases are typically

delivered by truck, and there's talk of using

drones to get the job done. In the chaotic cities

of India and other emerging markets,

companies do whatever it takes to get

packages to customers-by foot, bicycle, evenboat.

An estimated 85% are cash-

on-delivery(CoD)

transactions

Last-mile delivery

Challenges in E-commerce

*Source : Signifyd Blog reporting

5 Keys to fulfillment:

• Automation: Automation is both the presence and future. Consider what youcan automate and do it. Make sure the task or process you‘re automating isat such a scale, or will grow to such a scale, that automation pays off.

• Visibility: every online consumer wants to know where his or her stuff is. Buildsystems that can automatically track orders and respond to your customers‘easy questions.

• Agility: with the rise of software as a service and relatively short-termcommitments to technology solutions, be ready to try innovative approachesand be ready to change quickly if they don‘t pay off.

• Customer experience: it‘s not just the marketing and merchandising end of e-commerce. Logistics plays a huge role in building customer loyalty. Create aclear system to handle returns.

• The Amazon-Effect: consider ways you are different from Amazon, do yourbest to match Amazon speed, but think about differentiation – novel gift-wrapping, striking packaging, adding riveting content to orders.

https://www.youtube.com/watch?v=Uagk2zluunY

https://www.youtube.com/watch?v=FBl4Y55V2Z4

• Automation…

Conclusion…

Electronic commerce and the internet are fundamentally changing the nature of SupplyChains, and redefining how consumers learn about, select, purchase, and use products andservices.

*Source : Fenstermacher & Zeng, 2000

What’s next

Amazon airborne fulfillment centers concept

What’s your key take away ?

THANK YOU !