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E-business and Online commerce supply chain management summary
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A summary for E-business and Online commerce supply chain management within the minor E-business and Online commerce on the VU Amsterdam.
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E-commerse Supply Chain Management samenvattingLecture 1
Introduction to E-SCM
B2C is the focus of this course
What is a supply chain?
• All processes involved with the flow of products and services from/to:
- Raw material producers
- Intermediate product manufacturers
- End product manufacturers
- Wholesalers and distributors
- Retailers
• Main drivers: Transportation, Storage, and Facilities
• Integration drivers: Information, Sourcing, Pricing
,• Goal: Achieve high service levels at low cost
Formal definitions of Supply chain management
- The design and management of seamless, value-added processes across
organizational boundaries to meet the real needs of the end customer (Institute for
Supply Management).
- Managing supply and demand, sourcing of raw materials and parts, manufacturing
and assembly, warehousing and inventory tracking, order entry and order
management, distribution across all channels, and delivery to the customer (The
Supply Chain Council).
Difference between Alibaba and Amazon
Alibaba is a platform, a marketplace for sellers and buyers. They use dropship companies
(3rd party sellers).
Amazon is a reseller and has inventory.
They require different supply chains.
- Both are e-commerce firms
- Both are leaders in their respective markets
- Both are technology firms
- Alibaba is solely a marketplace
- Uses drop-ship companies (3rd party sellers)
- Amazon is a primarily/historically a reseller
Types of supply chains
- Manufacturer ships directly to customer
- E-tailers
- Marketplace
- Third-party logistics (3PL) (per example DHL, PostNL)
E-commerce supply chains
,supported by supply chain network structure
How to fulfill demand?
Pick from dark store is ideal for medium number of orders
Strategic decisions: Network design
Where to position facilities?
, • Spreadsheet modelling
- Gravity models
- Facility location models
• Labour availability
• Labour cost
• Industrial relations laws
Strategic decisions: Decisions you can’t change for a few years
Tactical decisions: Decisions you make every year
Operational decisions: Decisions you make every day
Tactical decisions: Inventory management
Which products to stock? How much to stock? When to replenish?
- Inventory service level to target per product
- Ordering and holding cost
- Substitutes of products
- Perishability (expiration of fresh (but also clothing, electronics) products)
- Obsolescence (becoming obsolete, there is a new version)
- Return flows
- Sustainability
Operational decisions: Last mile delivery
How to organize last mile deliveries? when to deliver?
• Customer pickup at supplier/warehouse
• Lockers
• Store pickup
• Third-party collection points
• Home delivery
- Attended
- Unattended
• Lead-time targets
• Cutoff times (transaction is official) (order before 23:59, delivery is tomorrow > 23:59 is
cutoff time)
• Time window/time slot flexibility
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