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ELogistics internet impact to logistics management

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The Irrelevance of Location. Web accessible from any place on earth ... Automated tracking and tracing. International trade compliance and landed costs ... – PowerPoint PPT presentation

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Title: ELogistics internet impact to logistics management


1
E-Logisticsinternet impact to logistics
management
2
Outline
  • Why e-Logistics?
  • Internet impact to logistics management
  • What is e-logistics?
  • Major players in e-logistics
  • e-global logistics opportunities and challenges

3
Challenges in Logistics Management
  • Challenges
  • Poor information flow
  • Poor customer services
  • High paper intensity, low-tech interactions
  • Missing, inaccurate documentations
  • Lack of alternatives
  • Scheduling difficulties
  • High prices
  • Lack of qualified people

Source 2001 Mercer Management Consulting Survey,
in concert with Optimum Logistics and theJournal
of Commerce
4
Drivers in the Logistics Industry ...
are reshaping the industry
  • Global sourcing and distribution
  • Industry segmentation
  • Increasingly IT driven
  • Growing acceptance of outsourcing logistics
  • Market leaders continuously raising the bar
    space mgmt, inventory mgmt, JIT, continuous
    replenishment program (CRP), vendor partnership,
    dynamic forecasting, VMI, efficient consumer
    response (ECP), CPFR,

5
Paper-based Low-tech Interaction
50
400
Example Shipping 3 pallets from HKG to Tianjin
55
350
170
43
55
Interaction costs
90
10
90
80
230
60
Pick up And delivery
Terminal handling
Line-haul
Order Processing Disposition Sales
Mgmt. Accounting HR IT
Price to shipper
Shipper Interaction costs
Total cost
6
Internet is Changing the world
  • First came the phone, fax, and e-mail
  • Then ERP and EDI
  • And now, the internet
  • Ubiquity
  • Standardization
  • Real-time and lower cost communication
  • Many-to-many network configuration
  • Over 80 large businesses connected
  • B2B activity 5.7 trillion in 2004 (AMR
    Research)
  • Network/computing cost will come down
  • New commerce communities
  • Changing buyer and supplier relationship
  • eg. Amazon, E-Bay, Cisco, Dell etc.
  • Provides better information to customers

7
Distribution Logistics
  • make the right quantities of the right product
    or services available at the right place at the
    right time.
  • Function of intermediaries in the distribution
    channel
  • Re-assortment/sorting (consolidation/breakbulk)
  • Routinize transactions (transport, lot-size,
    payment)
  • Facilitate searching (matching buyers and
    sellers)
  • Impact of Internet E-Commerce on the distribution
    channel?

8
Impact of Internet on Distribution Channel
  • The Death of Distance
  • Distance no impact on electronic communication
    and electronic delivery
  • The Homogenization of Time
  • Website open 24/7, no seasonality
  • Seller need not be awake or present to serve
    buyer
  • The Irrelevance of Location
  • Web accessible from any place on earth
  • Retail location not important or even necessary
  • From marketplace to marketspace
  • Content? Context? Infrastructure?

9
Marketplace vs. Marketspace
  • Conventional Bookstore
  • Content
  • Sell books
  • Context
  • Shop (physical space) with shelves and tables
    (and a café?)
  • Infrastructure
  • Retail space with display and large stock of
    books, helpful (human) staff
  • Convenient location, pleasant surroundings, high
    traffic
  • Amazon.com
  • Content
  • Provide information about books
  • Context
  • Interface via a screen
  • Infrastructure
  • Hugh database, fast (computer) server
  • Warehouse stocks no books yet stocks all books
    in print
  • Location immaterial

10
Impact of Internet on Distribution Channel
Opportunities? Benchmarking? Competition?
11
Long term effects of E-Commerce
  • Distribution media instead of distribution
    channel
  • No longer passive conduits for products but
    active element in the production and market
    transaction of goods
  • Rise in commoditization
  • Information availability minimizes price
    differentiation
  • Drives towards mass customisation
  • Disintermediation and Reintermediation
  • Insurance brokers and travel agents bypassed
  • New intermediary search engines, auction sites,
    call centres, etc.

12
Supply Chain Technology Evolution
Intra-Enterprise Transactional Integration
Intra-Enterprise Transactional Optimization
Inter-Enterprise Transactional Integration
Inter-Enterprise Supply Chain Execution
Real time Supply Chain Optimization
13
New Logistics Landscape
Supply Chain Configuration and SC Execution
services
Customer interface
Front-end marketplaces
E-Logistics Space
3PLs / Freight Forwarders
IT Network providers
Systems management
Revenue managers / risk traders
Transaction aggregators
Back-end integration and optimization tools
Carriers
Leasing companies / asset owners
Component provision
Maintenance
Labor pools
IT services
Traditional integrated transportation company
14
What is e-logistics?
E-Logistics Information Liquidity
The ability to acquire and use information when
it is needed, what is needed, and in an
appropriate context
15
The Grand Vision of Global E-Logistics
Suppliers, manufacturers, distributors, packaging
plant, etc.
Banks, credit authority Invoicing, funds
transfer
Carriers, ship, truck, etc. Transport manifests,
insurance contracts.
Freight forwarders, 3PL Import/export
declaration, quota compliance, etc.
Customs Office, Inspection Authority, Certificate
of Origin Issuer, Customs brokers.
Source Stephens Inc.
16
E-Logistics Services
Marketplace, Execution and Collaboration
  • Freight exchange/auction
  • Purchasing portal
  • Automated billing and settlement
  • Lane optimization
  • Documentation
  • Automated booking
  • Service failure notification and resolution
  • Automated tracking and tracing
  • International trade compliance and landed costs
  • Product development collaboration
  • Pricing, revenue and profitability management
  • eMarketing
  • eFulfillment
  • Data mining (performance management)

17
E-Logistics Value Proposition
  • Logistics exchanges will bring price efficiency
    to the most segmented market
  • Load matching and other optimization tools will
    improve asset utilization
  • Integrated supply chain execution and
    collaboration tools will dramatically reduce
    business interaction costs and achieve a leaner,
    quicker and more reliable supply chain
  • Collaborative product development and revenue
    management tools will allow business to improve
    its return on investment
  • eLogistics will greatly improve the industrys
    information liquidity

18
E-Logistics PlayersSystem Providers Turned
e-Logistics Service Providers
  • Players in the space - examples
  • Manugistics, Manhattan Associates, EXE
    Technologies(SSA Global), Descartes, SAP, JD
    Edwards/PeopleSoft/Oracle, Siebel Systems,
  • Strengths
  • Domain knowledge, Proven solution components,
    Customer base, Critical mass, Existing
    partnership, Established
  • Weaknesses
  • Old tech infrastructure Have to teach an old
    dog new tricks?

19
E-Logistics Players DotComs
  • Players in the space abound
  • Aspen Associates, Capstan.com, Celerix.com,
    Clear Cross, DigiLogistics, Logistics.com,
    FreightWise, NTE, Global Freight Exchange, iShip,
    myCustoms, RightFreight, Savi Technologies,
    Nistevo, SameDay, Tradiant, Vestera, Retek, ,
    Ariba, CommerceOne,
    FreeMarkets, PurchasePro,
  • Strengths
  • Tech savvy, Faster in product development,
  • Weaknesses
  • E-Logistics network takes time and money to
    build, Lack of funding, Challenge in building
    customer trust, Shifting from heavy
    transaction-fee-based business model to
    value-added model,

FreightWise/NTE,
OpenHarbor,
GT Nexus,
20
Freight Exchanges
after the dust settles
Dot.com vision perpetual on-line global
exchanges, carriers and shippers bid for
match-ups, the exchanges take a commission.
  • Reality Smaller in scope and more focussed
  • Long-term (gt 1 yr) tenders rather than day-to-day
    match, (FreightTraders)
  • Private cooperative community of traders rather
    than open auctions and exchanges.
  • Membership fees and transaction (e.g. search)
    fees, not commissions (Teleroute)
  • Value-added service invoicing, POD processing
    and credit risk (X4freight)
  • Web-enabled software services, not exchange.
    (eLogistics)
  • Niche e.g. same-day courier-style deliveries,
    value-added service, e.g. mobile communications
    for proof of delivery and postcode lookup
    (Courier Exchange)

21
Driving Force for e-global logistics
  • Government regulatory pressure
  • Global customs modernization convention
  • U.S. Exporter/Importer of Record Rules, Ocean
    Shipping Reform Act
  • Security regulations C-TPAT (Customs Trade
    Partnership Against Terrorism), 24-hr advance
    manifest
  • Market pressure
  • Globalization of trade
  • E-Commerce
  • Internal operational pressure
  • Demand for better customer service
  • Demand to minimize duty and tax payments

22
e-global logistics for international trade
  • International trade compliance
  • International transportation management
  • International trade settlement
  • Language and cultural awareness solutions

23
Business Process of an International Trade
Source Stephens Inc.
24
Market Opportunities for e-global logistics
  • Global sourcing
  • Searching trade leads
  • Buyer/supplier screening and qualification
  • Contract negotiation
  • Global logistics
  • Arrange international shipping
  • Customs clearance
  • Document preparation
  • Shipment of goods
  • Global settlement
  • Credit management
  • Financing and settlement

(See handout from Stephens, Inc.)
25
Hong Kong
  • Electronic Transactions Ordinance (2000)
  • Give electronic records and digital signatures
    used in electronic transactions the same legal
    status as that of their paper-based counterparts
    and
  • Establish a framework to promote and facilitate
    the operation of Certification Authorities (CAs)
    so as to ensure trust and security in electronic
    transactions.
  • Public Key Infrastructure (PKI) Certification
    Authorities (CA)
  • HongKongPost, DigiSign (subsidiary of Tradelink),
    HiTrust.com
  • Tradelink
  • Joint venture of HKSAR Government and private
    firms
  • Facilitate electronic transactions between
    businesses and HKSAR government
  • Import/export declarations, certificate of origin
  • Automated manifest service for the 24-hr rule for
    U.S. Customs
  • Customer base of 53000 companies, 80000
    transactions per day

26
Hong Kong the future
  • Closer Economic Partnership Arrangement (CEPA)
  • Trade liberalisation, zero-tariff for 273
    categories of import to China
  • E-logistic services JingMaoLink, China-HongKong
    Cargo Manifest Interface, Road manifest (ROMAN)
  • Pan-Asian E-Commerce Alliance
  • Secure Cross Border Trade Transaction Service
  • pilot between Hong Kong, Japan, Korea, Singapore
    and Malaysia
  • Digital Trade and Transportation Network (DTTN)
  • Hong Kong Logistics Council initiative
  • neutral, open, non-exclusive, transparent
    electronic document exchange
  • 1) Standards and protocols
  • 2) Core message infrastructure
  • 3) Value-added service
  • Tradelink to be non-exclusive DTTN service
    provider
  • launched in 2006, 40 members so far

27
Integrated e-logistics service
  • Streamlined information flow for planning
  • Seamless integrated Logistics Management and
    Enterprise Resource Planning function
  • Real-time tracking and exception reporting

(From DigiLogistics.com Ltd.)
28
E-logistics systems
  • Business benefits
  • On-time delivery and fulfilment, lead-time
    reduction
  • Customer service improvements increased
    collaboration and co-ordination
  • Increased sales
  • IT benefits
  • Reduced time for data entry, management and
    integration
  • Plug Play, easy integration with existing and
    third-party systems
  • Transaction processing and monitoring
  • Network effect benefits
  • Lower transportation cost, improved capacity
    utilisation
  • Flexible and responsive supply chains
    (co-mingling, merge-in-transit)
  • Single point of connection for participants

29
References
  • Changing Channels The Impact of the Internet on
    Distribution Strategy, L. Pitt, P. Berthon and
    J.-P. Berthon, Business Horizons, Kelley School
    of Business, Indiana University, 1999.
  • e-Global Logistics The Engine Powering
    Globalization, R. Y. Roberts, Industry Report,
    Stephens, Inc., November, 2000.
  • Freight exchanges Finding their second wind?,
    e.logistics magazine, Spice Court Publications
    Ltd., January, 2003.
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