Definition of Ecommerce

1
Definition of Ecommerce

• Electronic commerce is the buying and selling of
  goods and services(or the enabling of such
  activity) through electronic networks, including
  the internet
• not a single technology nor the replacement of
  paper procedural trails by electronic data
  transmission

2
The Importance of EC in Carrier Management

• ABF pres. Stubblefield says that it will have a
  greater effect than deregulation upon the
  transportation industry
• Southeastern Freight Lines 2/3 of its 20,000
  shipments/day will be handled via internet or EDI
  in the near future vs. 1/15 today
• Ernst Young survey- 40 of sales within 9
  years, 5 years from now. 2008 117B, ½ of U.S.
  on-line purchases

3
Companies Investing in Internet to Improve
Competitive Position over the next 2-5 yrs.

• Definitely 21
• Probably 31
• Probably not 40
• Definitely not 8

4
Reasons Why Companies EC is not super important
today

• degree of difficulty and corporate culture not
  ready for business process changes
• lack of agreed strategic alignment, business
  goals, and end to end performance measures
• reverse logistics process does not have
  commercially available software
• lack of corp. talent-hiring for attitude and
  training for skills

5
Priority for Using Internet in Supply Chain

• Customer interactions 55
• Supplier interactions 18
• Logistic provider interactions 16
• Internal efficiencies 11

6
Marketing Solutions Provided by EC

• Able to distribute to smaller markets with high
  distribution and return costs
• Means to provide differentiated customer service,
  order fulfillment, value added services
• Automating business transactions-buying selling
  of products can amount to 40 of non-automated
  cost
• Scan an entire industry to seek best price

7
Supply Chain Improvements-EC

• reduced inventory levels
• competitive pricing
• more accurate forecasts
• quick replenishment
• reduce working capital
• reduce response times

8
Other Effects of EC

• raise customer expectations regarding price,
  sourcing, ordering, delivery and service
• broaden product lines through customization even
  for smaller customers
• effective supply chain mgmt. use of EC can
  restore linkages and connectivity of sales
  mktg. to supply chain and reduce delays due to
  sequential information

9
B2B B2C Ecommerce

• 5 container lines have formed a joint venture of
  an internet portal that will allow shippers and
  forwarders to transact a variety of business
  through a single Web site, Inttra
• OP Nedloyd, Maersk , Mediterrean Shipping Co.
  and two others
• B2C, B2B functions provided-track and
  tracing,booking confirmation,bill of lading
  info. Etc.

10
B2B B2C Ecommerce(cont.)

• most ocean container lines have been reluctant to
  commit millions of to take their systems online
  or to form partnerships with internet startups
• making it hard for internet cos. and their
  auction sites to become established
• this Inttra alliance is using Manugistics as a
  consultant not as a provider
• will not involve pricing or cust. service

11
B2B Ecommerce

• Two B2B exchanges formed by airlines and
  aerospace manufacturers have combined to provide
  a neutral and global e-marketplace
• the goal is to provide the aviation industry with
  an end to end system comprising procurement,
  supply chain management, and technical
  information services
• i2 software system will provide the core business
  platform and business solutions

12
B2B Ecommerce (cont.)

• Services provided by the air industry venture
  will include online catalogs, reverse and forward
  auctions, inventory and supply chain mgmt. tools
  and transaction support
• Condiem- airline trading exchange between
  airlines and aeronautical mfg.

13
Internet Service Providers(ISP)

• only 20 operate nationally
• not relying only on internet but other accesses
  including wireless, DSL, and cable
• despite growth many ISPs have laid off staff

14
Impact of EC on Carriers

• Electronic transaction costs-once installed 1/15
  of paper transactions
• internet will grow 45/yr. while EDI 7 Why?
  less expensive and less expertise
• Freight matching-easier for carriers to find
  loads-can reduce empty miles(8 to 12) and space
  in trailers can be bought and sold like a
  commodity- will increase load factor

15
EC Impact on Carriers(cont.)

• Sales mktg.-Customer service deal with
  exceptions rather than routine info., cut down on
  number of sales calls, transmit rate and bid
  info. via e-mail saves days
• partnership between shippers and carriers-evolve
  from internet portals to specialized info. hubs,
  ex., shipment tracing, pickup requests, invoice
  processing, and claim filing

16
EC Impact on Carriers (cont.)

• E-fulfillment-break down shipments and pack to
  order
• in past got order to storefront now directly to
  the home
• UPS and FedEx battleground-online supply chain
  manager as well as delivery company
• Large LTL carriers trying to enter home delivery
  market

17
Impact of EC on Fulfillment Shippers

• marketing forgets to tell distribution of online
  ad and promotion
• unpredictable demand
• individual orders more time consuming and greater
  order volume
• lack of integration between on-line order taking
  and warehouse
• usually wider range of products

18
Impact of EC on Shippers (cont.)

• Higher through-put demands especially holiday
  seasons
• E-fulfillment d.c.s handle product 3-10 times as
  often as 3PL fulfillment centers
• catalog buyer more forgiving for delivery times
  but returns are twice that of retail stores
• online buyer has higher expectations-order picked
  and shipped today and delivered tomorrow

19
Impact of EC on Shippers(cont.)

• Order confirmations within an hour
• FedEx tracking number in confirmation with
  expected delivery times to customer
• returns-instead of back to store now back to the
  D.C. or to the shipper-reverse logistics
  challenge
• Apparel returns for E-tailers can run 45, order
  more than one size to ensure fit-no question
  return money back returns

20
Security Issues for eCommerce

• Data backup is crucial, only 6 of all co.s
  suffering a catastrophic data loss are able to
  recover.
• Latest technology is electronic
  vaulting-provides continuous backup and data
  recovery via web-not as expensive as duplicate
  systems and no need to ship tapes to storage
  sites.
• Hacking into sites and credit card number theft

21
Foreign Techies

• H-1B visa programs allow 500,000 immigrants to
  work in U.S. industry-loss of jobs for U.S.
  citizens and loss of critical data and system
  intelligence
• now coming under attack due to rising
  unemployment and loss of proprietary info.
• National security issues