All the articles and lectures for the exam of E-Commerce Supply Chain Management. It's a subject of semester 2 of the minor: Introduction to E-business and online commerce.
• Growth:
o Global retail e-commerce reached $5.8 trillion in 2023, projected to
exceed $8 trillion by 2027.
o Rapid growth fueled by increasing online retail adoption.
• Definitions:
o B2C: Direct sales to individual consumers. (focus of this course)
o B2B: Transactions between businesses or organizations.
o C2C: Consumers selling to other consumers (e.g., eBay).
o C2B: Individuals providing goods/services to businesses.
• Trends:
o Dominance of Wal-Mart and Amazon, with Amazon rising from rank 157 in
2001 to rank 2 in 2021.
o Rapid expansion of Chinese e-tailers like JD.com and Alibaba.
Supply Chain Management (SCM)
• Definition: The coordination of processes to manage supply and demand,
sourcing, manufacturing, inventory, and delivery at optimal cost.
Other definition: the design and management of seamless, value-added
processes across organizational boundaries to meet the real needs of the end
customer.
• Components:
o Drivers: Transportation, storage, and facilities.
o Integration: Information sharing, sourcing, and pricing strategies.
o Goals: High service levels with minimal cost.
Supply chain is 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
→ it can be:
product flow (materials, components, services, finished products)
reverse product flow (returns for repair, replacements, recycling, disposals)
Information flow (Invoices, Orders, Rules & Regulations, Forecasts)
Cash flow (payments of products)
What is the difference between Aliexpress & Amazon?
• Both are e-commerce firms
• Both are leaders in their respective markets
• Both are technology firms
• But they have different supply chain structures. What is this difference?
,E-Commerce Supply Chains
1. Types:
o Direct Manufacturer-Customer: Ship directly from producers.
o E-tailers: Maintain warehouses for direct sales.
o Marketplaces: Platforms like Amazon or AliExpress where sellers and
buyers interact.
o Third-Party Logistics (3PL): Outsourcing logistics.
2. Strategic Decisions:
o Network Design: (where to position facilities?)
▪ Spreadsheet modelling, labour cost, labour availability, and
industrial relations laws.
How to fulfill demand?
• Integrated fulfilment: building e-fulfilment capability into existing distribution centers
that also deliver to conventional stores
• Dedicated fulfilment: via purpose-built facilities
• Store fulfillment: picking online orders from regular retail shelves for separate,
dedicated delivery
• Dropshipping: delivering customer orders directly from their suppliers’ inventories
When to go for store pickup vs dedicated facilities?
• Volume & lead-time targets drive decision
• Pick from store: 100 - 3000 orders per week
• Pick from dark store: 10000 - 20000 orders per week
• Pick from dedicated warehouse: ≥ 20000 orders per weekTactical Decisions:
Which products to stock? How much to stock? When to replenish?
• Inventory service level to target per product
• Ordering & holding costs
• Substitutes of products
• Perishability
• Obsoloscence
• Return flows
• Sustainability
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)
• Time window/time slot flexibility
Operational Decisions:
o Returns Management: Addressing customer returns efficiently.
o Technological and Legal Developments:
▪ Legal compliance with emissions rules city delivery
▪ → NL: transport license required >500 kg
▪ Ever later cut-off times
▪ More flexible delivery options:
• Location flexibility
• Time window/time slot flexibility
▪ Automation
• Automated picking
• Automated delivery
• Drone deliveries
▪ Sustainability: Reducing carbon footprints and embracing green
logistics.
, Summary of the Amazon Supply Chain Management Case
Overview: The case details Amazon's rapid evolution from an online bookstore founded
in 1994 to one of the world's most valuable companies by 2018, with a market
capitalization of $702 billion. Its innovative supply chain has been a key driver of growth,
supporting its expansive product range, from books to groceries, and services like
Amazon Web Services (AWS) and Prime Video.
Key Sections:
1. Amazon’s Achievements by 2018:
• Fourth-quarter 2018 revenues reached $60.5 billion, with a 30% year-over-year
increase.
• Amazon Web Services (AWS) generated $17.5 billion in 2017.
• Innovative devices like Echo, powered by Alexa, gained traction.
• Diversified operations included Amazon Go stores, the Whole Foods acquisition,
and expansion into logistics.
2. Retail Industry Context:
• U.S. retail sales were $5.1 trillion in 2017, with e-commerce accounting for $450
billion.
• Amazon led with 43% of the U.S. e-commerce market, competing with Walmart
and Target.
3. Traditional vs. Amazon's Supply Chain:
• Traditional Retail: Relies on large-scale, seasonal inventory management and
partnerships with logistics providers for bulk shipping.
• Amazon’s Approach:
o Full control of its supply chain: from procurement to final delivery.
o Developed Fulfillment by Amazon (FBA) for third-party sellers.
o Built its logistics network (air hubs, truck fleets, and sortation centers) to
reduce dependency on FedEx and UPS.
4. Amazon’s Innovations in Logistics:
• FBA Services: Offered end-to-end logistics for third-party sellers.
• Prime Hubs: Enabled 1- to 2-hour deliveries in urban areas.
• Amazon Flex: A crowd-sourced delivery program similar to Uber.
• Warehouse Automation: Acquired Kiva Systems for robotic solutions.
• Global Ambitions: Launched freight forwarding services for seamless cross-
border shipping.
5. Whole Foods Acquisition:
• Acquired in 2017 to penetrate the $800 billion U.S. grocery market.
• Leveraged Whole Foods stores for distribution and Prime membership benefits.
6. Financial Challenges:
• Shipping costs in 2017 reached $21.7 billion, with a $7.2 billion loss on shipping
fees due to the aggressive Prime program.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller irisknorren. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.09. You're not tied to anything after your purchase.
