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ELogistics internet impact to logistics management


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

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

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
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,

Paper-based Low-tech Interaction
Example Shipping 3 pallets from HKG to Tianjin
Interaction costs
Pick up And delivery
Terminal handling
Order Processing Disposition Sales
Mgmt. Accounting HR IT
Price to shipper
Shipper Interaction costs
Total cost
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
  • 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

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
  • Re-assortment/sorting (consolidation/breakbulk)
  • Routinize transactions (transport, lot-size,
  • Facilitate searching (matching buyers and
  • Impact of Internet E-Commerce on the distribution

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
  • 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?

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
  • 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

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

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
New Logistics Landscape
Supply Chain Configuration and SC Execution
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
Leasing companies / asset owners
Component provision
Labor pools
IT services
Traditional integrated transportation company
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
The Grand Vision of Global E-Logistics
Suppliers, manufacturers, distributors, packaging
plant, etc.
Banks, credit authority Invoicing, funds
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.
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)

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

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?

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,

GT Nexus,
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.
  • Niche e.g. same-day courier-style deliveries,
    value-added service, e.g. mobile communications
    for proof of delivery and postcode lookup
    (Courier Exchange)

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
  • Market pressure
  • Globalization of trade
  • E-Commerce
  • Internal operational pressure
  • Demand for better customer service
  • Demand to minimize duty and tax payments

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

Business Process of an International Trade
Source Stephens Inc.
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.)
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
  • Establish a framework to promote and facilitate
    the operation of Certification Authorities (CAs)
    so as to ensure trust and security in electronic
  • Public Key Infrastructure (PKI) Certification
    Authorities (CA)
  • HongKongPost, DigiSign (subsidiary of Tradelink),
  • Tradelink
  • Joint venture of HKSAR Government and private
  • 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

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
  • launched in 2006, 40 members so far

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

  • 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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