E-logistic and International SCM - Coursework Example

Running Head: essay E-Logistics and International SCM of the of the of the IntroductionOrganizations, in search of competitive edge, are resorting to innovative business models that can foster more economic benefits to them. Demand for dynamic growth, changing market structures and digitalization of information also brought about a radical change in the operations of businesses. Traditional operations and supply chain management have been replaced by virtual business models, bridging the gap between electronic supply chain and logistics system. This paper delves into the overview of E-logistics and the dire need of it amidst globalization and innovation. Factors differentiating traditional and modern logistics systems are discussed along with benefits and challenges to the business. Overview of E-Logistics and SCM Activities like transportation, manufacturing, storage, inventory control, et cetera are some of the functional activities that are repetitive in nature for an organization. Mostly, plants, materials and selling points are not located at a single place, so movement of all these entities is crucial for the value generation proposition in making raw inputs into desired output. Supply chain management or SCM is that domain of business that involves all such activities needed to fulfill customer request, right from the point of production to the point of consumption. It manages the coordination and integration of single activities in such processes to enable cost cutting, quality conformance and reduced delivery time (Ross 2003, p.50). Logistics is a sub-domain of supply chain management and caters to the movement, storage and transportation of goods and services to the end users. Logistics plays an important role in the overall supply chain management as without movement, output cannot reach its destination. When technology comes into scene and logistics processes are done with the help of internet and e-commerce, it is termed as e-logistics. With e-logistics, supply chain network turns virtual and becomes both dynamic and real time processing enabled (Chang 2000). Need for E-Logistics The need for e-logistics was realized much before when visibility and synchronization between different supply chain processes was foreseen. Customer getting quality conscious and businesses becoming responsive anchored the dire need for logistics turning digitized. A better understanding in this regard can be done through the following points: E-logistics characteristics of real time data sharing enables greater visibility across supply chain, avoiding disruptions in flow. E-logistics supports the globalization premise of businesses by providing web based comprehensive solution. E-logistics not only optimizes the supply chain but also reduces the cost of value addition to inputs. This is so because organizations need to reduce their time-to-delivery which is not possible through manual modes of operations (Bayles 2001). Collaborative buyer/supplier relationship demands transparency in relations with bilateral governance which is facilitated through e-logistics system (Cooper 1993). Differences between traditional and E-Logistics The major differences between traditional and e-logistics emanate from the following points: In traditional logistics system, high volumes of loading and unloading is done due to lack of real time information sharing, which is not the case with e-logistics. Shipments are small in volume in the latter case. Traditional logistics systems identify and recognize its customer because it is interaction driven. However, customers of e-logistics are unknown as they are interacting with the system through internet and web based technology. Destination points of traditional logistics systems are concentrated while that of e-logistics are scattered due to availability of information and responsiveness. The demand function in traditional logistics is regular, owing to limitation of proactive measures, while for e-logistics, it is lumpy and irregular. Benefits of E-Logistics E-logistics has not only facilitated inbound and outbound but also upstream and downstream movement in supply chain management. The buyer is now equipped with supplier’s information and can react proactively to coordinate the activities. Shipments and carriers that form an integral part of logistics systems are also facilitated as both the parties are aware of the dispatch and can consolidate their loads, thereby reducing transportation and storage costs (Botha 2004, p. 368). Logistics is a domain which involves huge amount of paper work, which often leads to errors and omissions. By providing a common and synchronized communication platform, e-logistics tends to reduce manual labor and also notifies the parties of any discrepancies much before so that corrective actions are taken within time. In a way, asynchronous flow is avoided by e-logistics which is a major benefit accruing. E-logistics offers dual efficiencies to both the supplier and the buyer by reducing the overheads and minimizing the appointment time schedules due to elimination of human intervention. In traditional logistics systems, suppliers’ constraints were not opened completely due to which unrealistic goals and delivery times were set. E-logistics has reduced this phenomenon by disclosing all sourcing, transportation and location restrictions to prospective buyers. Challenges faced by E-Logistics Personalized treatment and speedy delivery are the cornerstones for the success of e-logistic systems. When external environment changes, internal capabilities have to be modeled to align with the fluctuating situation. This calls for flexibility and robustness in the functioning of e-logistics. E-logistics has been implemented in many organizations so far, but even then, shortages in availability of capacities have been observed due to high traffic density fluctuations and lack of two-way communication. Till now, e-logistics have been focused upon profit approach but need of the hour is to concentrate now on customer which is the focal point of any business. The way customer sees, interacts and associates itself with the system has to be made more collaborative and participative (Kidd 2000 p. 510). The prime motive of e-logistics is to provide dynamic and logical interface to the customer as he is least interested in the back-end of processes. What it desires is consistency and accessibility in e-logistics system. Conclusion Logistics takes the front seat during the planning and controlling module of material, information and process flow for goods and services. Its mission is to make available right products at the right place at the right time at the right price and to the right people (Wiley n.d). Faring well in the performance criteria by minimizing the costs incurred in operations and constraints of budget and time makes e-logistics and e-supply chain management the most demanded tool for gaining competitive advantage over rivals. References Bayles, D 2001. E-commerce logistics and fulfillment: delivering the goods. Botha, J 2004. E-commerce. South Africa: Paarl Print Chang S. L., (2000), “Information technology in business processes”, Business Process Management, Vol. 6, No. 3, pp. 224 - 237 Cooper J 1993. Strategy Planning in Logistics and Transportation. The Cranfield Management Research Series; London, pp. 261. Kidd, P 2000. E-Business: key issues, applications and technologies. USA: IOS Press Ross, D 2003. Introduction to E-Supply Chain Management: Engaging technology to build market-winning business partnerships. USA: CRC Press Wiley n.d. Introducing Logistics Systems [online] available from < http://media.wiley.com/product_data/excerpt/77/04708491/0470849177.pdf> [accessed 22 April, 2010] Read More