Internet Option Introduction
This session will provide an overview of business-to-business and supply chain E-Commerce, outlining the business issues to be considered when implementing an E-Commerce solution.
E-Commerce Tools
Electronic Data Interchange (EDI)
EDI was developed to eradicate the need for re-keying in data, using agreed standards to enable computers to exchange electronic versions standard forms (such as purchase orders and invoices). National, international and industry specific standards exist.
- Batch EDI
- Financial EDI
- Interactive EDI
- Hybrid EDI
- Form-based EDI
Software
EDI software fulfils the following functions:
- data extraction;
- data encoding;
- data transmission;
- data receipt;
- data decoding;
- data insertion.
There may be a separate piece of software for each function, but it is more likely that one or two integrated applications will manage them.
The Impact on the Supply Chain
Much of what has been presented so far has been presented in the context of straight business-to-business trading relationships, and this may have disguised the considerable effect that E-Commerce has had on the supply chain.
The supply chain is the mechanism by which goods are moved between:
- suppliers of raw materials;
- manufacturers;
- wholesalers;
- retailers;
- finally to the end consumer.
It can involve a vastly complicated set of trading relationships and have equally complicated logistics implications
Impact of E-Commerce on Supply Chain Management
E-commerce impacts supply chain management in a variety of key ways. These
include:
Cost efficiency: E-commerce allows transportation companies of all sizes to exchange cargo documents electronically over the Internet. E-commerce enables shippers, freight forwarders and trucking firms to streamline document handling without the monetary and time investment required by the traditional document delivery systems. By using e-commerce, companies can reduce costs, improve data accuracy, streamline business processes, accelerate business cycles, and enhance customer service. Ocean carriers and their trading partners can exchange bill of lading instructions, freight invoices, container status messages, motor carrier shipment instructions, and other documents with increased accuracy and efficiency by eliminating the need to re-key or reformat documents. The only tools needed to take advantage of this solution are a personal computer and an Internet browser.
Changes in the distribution system: E-commerce will give businesses more flexibility
in managing the increasingly complex movement of products and information
between businesses, their suppliers and customers. E-commerce will close the link
between customers and distribution centers. Customers can manage the increasingly
complex movement of products and information through the supply chain.
Customer orientation: E-commerce is a vital link in the support of logistics and transportation services for both internal and external customers. E-commerce will help companies deliver better services to their customers, accelerate the growth of the e-commerce initiatives that are critical to their business, and lower their operating costs. Using the Internet for e-commerce will allow customers to access rate information, place delivery orders, track shipments and pay freight bills.
E-commerce makes it easier for customers to do business with companies: Anything that simplifies the process of arranging transportation services will help build companies' business and enhance shareholder value. By making more information available about the commercial side of companies, businesses will make their web site a place where customers will not only get detailed information about the services the company offers, but also where they can actually conduct business with the company.
Ultimately, web sites can provide a universal, self-service system for customers. Shippers can order any service and access the information they need to conduct business with transportation companies exclusively online. E-commerce functions are taking companies a substantial step forward by providing customers with a faster and easier way to do business with them.
Shipment tracking: E-commerce will allow users to establish an account and obtain real-time information about cargo shipments. They may also create and submit bills of lading, place a cargo order, analyze charges, submit a freight claim, and carry out many other functions. In addition, e-commerce allows customers to track shipments down to the individual product and perform other supply chain management and decision support functions. The application uses encryption technology to secure business transactions.
Shipping notice: E-commerce can help automate the receiving process by electronically transmitting a packing list ahead of the shipment. It also allows companies to record the relevant details of each pallet, parcel, and item being shipped.
Freight auditing: This will ensure that each freight bill is efficiently reviewed for accuracy. The result is a greatly reduced risk of overpayment, and the elimination of countless hours of paperwork, or the need for a third-party auditing firm. By intercepting duplicate billings and incorrect charges, a significant percent of shipping costs will be recovered. In addition, carrier comparison and assignment allows for instant access to a database containing the latest rates, discounts, and allowances for most major carriers, thus eliminating the need for unwieldy charts and tables.
Shipping Documentation and Labeling: There will be less need for manual intervention because standard bills of lading, shipping labels, and carrier manifests will be automatically produced; this includes even the specialized export documentation required for overseas shipments. Paperwork is significantly reduced and the shipping department will therefore be more efficient.
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