What is E-commerce and How Does It Affect Logistics - Essay Example

Table of Contents Table of Contents 2 Introduction 3 E-commerce growth 4 Effect of internet 5 Effect on integrated logistics by Ecommerce 6 Conclusion 9 References 10 What is e-commerce and how does it effect integrated logistics? Abstract This paper will discuss what is e-commerce and its impact on the traditional business methods. This is a age of technology and the whole world has become a global village, so in this age distances have been vanished, you can sale, advertise, trade and business from one corner of world to other by means of internet (web). This is the basic concept of the e-commerce. So this paper mainly focuses on the e-commerce and its effect on the integrated logistics. Introduction What is E-commerce? The application of the internet technology to established business and administrative activities has introduced extensive advantages and services those have given the business a new life. E-commerce presents buyers and sellers an innovative environment of communication and offers an opportunity to generate new marketplaces. In common it is recommended that the development of E-commerce outcomes in higher firm productivity and competence as a consequence of lower search and transaction expenses (Kotler et al, 1997). Internet allows millions of people throughout the world to correspond with each other by transferring computer files, searching databases, exchanging electronic mail, and even chatting with others (Kalakota, 1997). The application of internet-based electronic commerce or Ecommerce in manufacturing is at the moment getting a wide-reaching awareness for the reason that its promise of plummeting the manufacturing costs and just-in-time or JIT applications (Godin, 1995). The universal convenience of the internet for the exchange of transactions between buyers and sellers is fueling the development of electronic commerce. Electronic commerce is the practice of buying and selling goods and services electronically with computerized business transactions by means of the internet, networks, and other digital technologies. It also deals with the actions supporting market transactions, such as promotion, marketing, customer support, delivery, and payment. By changing manual and paper-based activities with electronic alternatives, and by using information flows in innovative and dynamic ways, electronic commerce can accelerate ordering, delivery, and payment for goods services while dropping companies operating and inventory costs (Kenneth, 1998). E-commerce growth The Internet-based electronic commerce is swiftly rising as an entirely novel method to carry out business and to act together with customers, suppliers and competitors. Ecommerce covers a lot of aspects of buying/selling dealings. It as well covers numerous operations inside the production processes (Kalakota, 1997). Throughout the prior decade, consumers have made use of internet as an innovative information medium and corporations have standardized it as an innovative organization for distribution. Certainly, the internet is touching the socioeconomic behaviors and cultural features of organizations and individuals (Soliman, 1997). In particular, younger age group those are awarded with latest telecommunication and information devices, are disposed to place additional worth in its use for spare time behavior, spend additional time on the internet for their personal requirements, and direct online spending by participating in e-shopping and e-auctions. For these causes the analysis and forecasting of the innovative generation’s behavior patterns are a significant feature in setting up business models in a number of zones of the economy, mostly in distribution and telecommunication industries (Cawley, 1997). E-commerce is most likely one of the majority popular subjects among studies on the effects of the internet. A number of studies concerning business to customer internet shopping done to recognize main factors influencing buying decisions on the internet, which comprise, in common, the psychographic and demographic characteristics of customers and the superiority of products or services (Kotler et al, 1997). Effect of internet Numerous reported their results regarding Ecommerce and internet practice, declaring the potential of e-commerce as an innovative retail channel. Though, the greater part studies have not taken into account the computer network environment as a main part of their analysis. In current few years, a multiplicity of business activities and transactions on the internet has augmented and gone on to rise swiftly. Ecommerce has been transformed from tentative and hazardous business adventures into legitimate and sophisticated business carry outs. At the same time as the traditional ways of doing business are up till now in existence, e-commerce has opened up a bright frontier for individuals and companies to join economic, business, and trade activities. Sales capacities in Ecommerce are added up in billions of dollars (Cronin, 1996). The expansion of business on the internet has significant impacts on business information services in terms of distribution, access, information production, organization and retrieval. Web sites contribution on the internet is propagating in a range of formats and wraps virtually each business area. While governments at all stages and well established publishing corporations that conventionally proffer business information are up till now dominant in providing most important products, thousands of small businesses have designed their own websites to market, promote and sell their goods and services (Liu et al, 2000). Effect on integrated logistics by Ecommerce In terms of a wide-ranging study for the composite effects of e-commerce on established integrated logistics, a difference has to be drawn among the two key practices of online management those are acknowledged as business- to-business or B2B and business-to-consumer or B2C. B2B business is normally distinguished by a match among trade chains of the old and fresh financial system. For the fraction driven by main companies, B2B markets and consequential business direct from the logistical perspective, to large volumes per order to a relatively little amount of various consumers. This B2B practice of online transacting and ecommerce permits the accomplishment of cost proficient and eminence proficient retail chains and incorporated logistics, for the basis that small level of difficulty with previously established logistics systems. 1 An augment in the amount of different consumers, in blend with a smaller volume for every order, guides to the effect that the complicatedness of the incorporated logistics develops noticeably and ends up in an atomization of delivery which is a foremost confront for B2C transactions. It is the transforms in transaction that mainly demand a absolutely diverse point of view on incorporated logistics. Believing these consequences on retail chains and trade integrated logistics, it appears practical that the internal and external procedures have to be optimized. From the interior/internal perspective, a grouping of e-commerce integrated logistics into usual supply chain administration systems necessitates the formation of interfaces for information systems, mutually software and hardware, in addition to the formation of efficient alternative structure for the single customer units2. On the outside or external side, the delivery incorporated logistics as the edge among the supply and the clandestine consumer is becoming a more and more imperative issue of proficient e-commerce incorporated logistics. The ‘last mile’ of supply to the consumer is yet the preponderance cost comprehensive part in ecommerce supply chains. The development of global business is made probable by the development of integrated logistics businesses all over the globe. Nations are becoming nearer and nearer for the reason that the accomplishment in worldwide integrated logistics, and the global business is becoming additional practicable because of the expansion in integrated logistics movement. A company would be able to manufacture anyplace in the world where it is reasonable and leave the shipping from nation A to nation B to the integrated logistics professionals. Outsourcing of equipment from distant suppliers is a central part of the integrated logistics distribution chain of several companies. The main motive for outsourcing is lesser costs however access to expert technology and expertise is as well of significance. In this framework it is the accountability of global integrated logistics to form certain the refined goods are at the exact place, in the exact amount, at the precise time anyplace in the worldwide market3. Fundamentally, worldwide corporations devise policy on a global basis to build up innovative marketplace opportunities. Like these corporations which look for to influence their companies’ competitive equilibrium, relate international policy efficiently and competently. In contrast, multi-domestic business would be inclined to function inside individual marketplaces all the way through the world however does not stress on organizing the individual policy into an organized worldwide strategy. 4 The purpose of customary retail chains is based on the accessibility of trading products in the area; as a result the distribution is close to the consumer. The seller obtains a manufactured good portfolio, which is being accessible to the vendor and afterward to the consumer. From the logistics standpoint, the main purpose is based in the dipping of business costs in the course of well-organized co-ordinations among the participating partners. The fast boost of innovations, particularly in the information technology or IT and communications technology fields, facilitates all associates of the conventional value-added chain with a cost-effective responsiveness of business procedures towards the consumer. E-Commerce consequently deteriorates the previous unbendable channel of distribution. From the retail-chain-based standpoint, ecommerce behaviors driven by traders do not move away from conventional systems. It means that ecommerce value-added services have to be employed in the mainly classy means of all systems. Cost effects of value-added services cannot be engrossed by further margins. On this foundation, it can be accomplished, predominantly for incorporated logistics confronts in the ecommerce age, that the accessible infrastructures of conventional retail chains are not appropriate for carrying out well-organized e-business. Extremely sophisticated logistics elements consequently have to be shared and incorporated in the on hand structures to produce new well-organized systems. Traditional retail chains will diverge basically, although there is no need for an authentic revolution in logistics systems. The development of global trade is made probable by the development of logistics businesses all over the globe. Nations are becoming faster and faster for the rationale that of the success in international incorporated logistics, and the global trade is becoming additional viable appropriate to the enlargement in logistics action. Conclusion In this paper I have discussed about E-commerce, its growth and its impacts on the global business and economy. E-commerce has a deep impact on our daily life. Its impacts on the business are changing the whole image of global trade. As I have discussed earlier that we can manufacture in any part of world and distribute and trade our products in any part of the world. This is the real effect of the ecommerce on the integrated logistics. I have discussed and presented this concept and tried to present this in a summarized way. In other words: “The trouble is not at all how to obtain innovative, new thoughts into your intellect, although how to obtain the old ones out.” References 1. Cawley, R.A. 1997. "Interconnection, pricing, and settlements: some healthy jostling in the growth of the internet", in Kahin, B., Keller, J. (Eds), Coordinating the Internet, MIT Press, Boston, MA, pp.346-76. 2. Cronin, M.J. 1996. “Global Advantage on the Internet”; Van Nostrand Reinhold, New York. 3. Godin, S. 1995. “Presenting Digital Cash”; Sams.net Publishing, Indianapolis, IN. 4. Kende, M. 2000. “The digital handshake: connecting internet backbones”; FCC-OPP Working Paper. 5. Kenneth C. Laudon. 1998. “Management Information System Sixth Edition”; New York. Addison Wesley Publishing Company. 6. Kotler, P, Armstrong, G. 1997. “Marketing: An Introduction”; Prentice-Hall, Upper Saddle River. 7. Liu, L. 1998. “Internet Resources and Services for International Business: A Global Guide”; Oryx Press, Phoenix. 8. Retrieved on December 14, 2008. Retrieved from: http://www.touchbriefings.com/download.cfm?fileID=3201&action=downloadFile. 9. Retrieved on December 14, 2008. Retrieved from: http://www.meti.go.jp/english/information/data/cEC20004Sae.pdf. 10. Soliman, F. 1997. "Role of information technology in business process re-engineering"; Proceeding of Australasia on Conference Technology for Manufacturing, Massey 11. Vassos, T. 1996. “Strategic Internet Marketing”; Que Corp., Indianapolis, IN. Read More