Logistics Management Activities of Online Retail Store - Assignment Example

Logistics Management Activities of Online Retail Store Name Institution Date Introduction The emergence of information communications technology and electronic commerce has enabled organizations to be flexible ad responsive to the ever changing market requirements. Due to emergence of new organizational environments ad information technologies, organizations have been able to adopt electronic supply chain which connects trading partners via several information technologies including electronic data interchange and the internet, allowing them to purchase, sell and transport services, products and cash. The conventional schemes of logistics control are unable to manage the dynamics of modern day logistics service requirements. Online logistics is the scheme of automating logistics activities and offering an incorporated, end to end fulfillment and the supply chain management services to players of logistics procedures. The e- logistics automated processes offer supply chain visibility. Most retailers have entered electronic commerce environment, driving their operation into the logistics arena and fulfillment of picking packing and shipping of small orders. How online retail store logistics activities can contribute to low product costs and add value to place and time utility In modern day increasingly competitive environment, several retail stores are becoming global in order to increase profit, market share and sales, and take advantage of efficiencies in sourcing and production. Bayles (2008) notes that a major determinant of the performance of a business is the function of logistics in making sure that there is a smooth movement of products, information and materials throughout an organization’s supply chain. Online retail store logistics activities can contribute electronic procurement to low product costs and add value to place and time utility. Electronic procurement is the sourcing of services of goods through electronic means, typically the internet. According to Baily (2008), procurement is a support action for purchase of inputs such as raw materials, production and office supplies and information systems for every part of the value chain. Procurement activities are aimed at sourcing, anticipating requirements attaining supplies, moving the supplies into the firm and evaluating the category of supplies as a present asset. Improvements of procurement procedures through online procurement in business to business markets lower the expenses incurred in identification and the consequent selection of the most superior suppliers, increases value of purchases on basis of their quality-price relationships as well as reduce costs of transactions linked with increased process efficiency. A key procedure in electronic procurement decision making is the supplier selection process. At the public level, electronic procurement enhances non-restricted and unlimited access to state information and promotes market transparency, as well as economic integration based upon complementarities. It also promotes global procurement opportunities for domestic businesses. Neef (2004) notes that identification of the possible advantages of electronic procurement for Chinese business can be reflected on development of websites by the government to enhance implementation of e-procurement. Electronic procurement has the probability of lowering overhead costs linked with purchasing and increasing an organization’s bargaining power. This power in turn leads to superior purchasing conditions and terms, superior suppliers, increased reliable supply of superior services and goods, better costs and reduced overall purchasing costs. For these reasons, electronic procurement is viewed as having the potential of playing a key role in an organization’s efforts to create a competitive price advantage that that will last for numerous years, thus grounding a long term competitive advantage. This is especially significant for China because information and communication technology is the vital enabling technology and the key contributor to national growth and productivity. Traditionally, customers, both final consumers and retailers have been supervising their levels of inventory and placing purchase orders to vendors. Recently, there has been a development in vendor managed schemes, whereby vendors supervise consumption or customer sales and inventories via electronic data interchange and decide how and when to replenish consumers. Therefore, through the use of online logistics in a retail store, vendors will be able to attain cost savings via an improved coordination of consumer deliveries without requiring customers to allot costly resources to management of inventory (Graham, & Hardaker 2000). How online retail store logistics activities can contribute to low product costs and add value to place and time utility in International transportation from China to Australia. Transportation plays a vital and connective function among the numerous steps that contribute to conversion of resources into valuable goods which are then sold to the consumer. The planning of all these sub-functions and functions into a scheme of movement of goods so as to reduce cost and maximize service to the consumers constitutes the business logistics concept. Maritime industry can play a significant role of in international freight from china to Australia It can offer a cheap as well as a greater carrying capacity for customers. To enhance competitiveness and save costs, present maritime logistics companies tend to utilize large scaled ships along with cooperative operations techniques. In addition, modern maritime consumers care more about service quality than delivery price. Therefore, it is essential to use online logistics so as to expand service satisfaction such as real time information, goods tracking schemes and accurate time windows (Williams & Ozment, 2002). Narendra and Smith (2009) note that determining the manner in which organizations transport products via the supply chain from source to consumer is an intricate challenge. It is highly vital than in the past years, because of global sourcing and multichannel nature of retailing. Multichannel retailers are supposed to depend upon relationships with trusty vendors for outbound and inbound logistics and also for handling merchandise returns. Online logistics has revolutionized the manner in which goods and products are sold as well as how they are delivered. Customers demand products that are delivered at extremely high speed with inclusive order convenience and flexibility. In addition, modern day online consumers are able to capable to instantly track their order, from the time they make an order to the time they get it at their doorstep. With a wide range of technologies, consumers have become smarter and have the ability o re-route their shipments, establish delivery costs as well as time in transit, and break up orders from several shipments to diverse addresses. All this means that the change of power from seller to buyer has led to a novel era of anticipations and buyers , who are either businesses and consumers don’t put up with bad experiences like partial shipment of products, timely back up orders or partial product return policies ( Graham, & Hardaker, 2000). The most universal type of logistics has customarily been based upon moving huge shipments of products in bulk to choose strategic customers in certain geographic locations. Online logistics management activities can thus enhance value added, timely and cost effective international transportation of products from China to Australia. Through online logistics management, Australian firms are able to transport on-line purchased products and subordinate their own business identities and plans to become an integral portion of their online business consumers’ supply chain. One line logistic management has enhanced creation of extranet that can connects and permits Chinese and Australian firms to effectively interact with supply chain (Alshawi, 2001). Angeles, (2000) argues that t through direct shipment; products can be directly shipped from manufacturers to the retailers. Direct shipments eradicate the costs of operating a direct shipment and lessen lead times. However, if a customer shipment size is not big and consumers are dispersed over a broad geographic region, a huge fleet of small track might be needed. As a consequence, direct shipment is widespread when completely loaded trucks are needed by consumers or when fresh products are required to be delivered on time. Transport scheme is the most vital economic activity amongst the elements of business logistics schemes. Proximately two thirds of operating expense of company’s logistics is directed towards transportation. According to BTRE (2001), Australian value added of storage and transport sector was 34,496 million dollars in 199 to 2000 or 5.6 percent of gross domestic product. Transportation has the highest cost and occupies 29.4 percent of logistics expenses followed y inventory costs, warehouse fee, packing fee, management fee, and movement fee and ordering fee. Transportation cost entails means of transportation, containers, corridors, labours, time, pallets and terminals. Transport schemes makes products and goods movable and offers regional and timely efficacy to enhance value added in the least price principle. Transport influences the outcomes of logistic activities as well as sale and production. Within the logistics scheme, the cost of transport is considered as a constraint of objective market. The value of transportation differs with diverse industries. For products with high value, low weight and small volume, the cost of transportation merely occupies a very minute portion of sale and is not highly considered, while heavy, big and low valued goods or products, transportation costs occupies an extremely huge portion of sale and greatly influences profits, and thus is highly regarded. According to Ablbjorn and Halldorsson, (2002), the role of transportation in logistics systems is much more intricate than carrying finished products for proprietors. Through means of excellently handled transport schemes, goods are sent to the correct place so as to satisfy the demands of the customer. It leads to efficiency and creates consumers and producers. Thus, transportation acts as the foundation of economy and efficiency in business logistics and also expands other logistics system functions. Additionally, a superior transport scheme performing within logistics activities leads to service quality as well as competitiveness of a company. How online retail store logistics activities can contribute to low product costs and add value to place and time utility in Australian Customs, Quarantine and Inspection clearance. Vendor compliance is at the center of a successful supply chain management to attain vendor compliance, its is fundamental to establish what company procedures and policies will be when working with vendors. Vendor compliance implies that goods arrives from the vendor in appropriate condition and is also delivered in agreed –upon way. In addition to the quality of the products, other vendor compliance standards entail shipping and packaging requirements, inner-case and master-case sizes, advanced shipping notices, product packaging and paperwork and accounting requirements, routing guides and logistics requirements. Through monitoring compliance requirements online, retailers will be able to get their receipts on time and be compliant than tackle with the hassles of amassing charge backs (Aponte, & Secul, 2007). Australian quarantine and inspection service offers quarantine inspection for overseas cargo, animal and plant products coming into the country, and certification and certification for a variety of agricultural goods exported from Australia. All food, animal products and plant material are cleared on passengers’ incoming passenger card when they arrive in Australia. Goods are inspected, and where necessary, treated before being permitted into Australia. Through conducting quarantine and inspection procedures online, Australia can be able to permit reasonably swift clearance of containers as well as minimum interruption to their movement within the country. The Australian customs service has implemented a novel cargo clearance and reporting scheme which requires importers and forwarders to electronically report incoming cargo to Australian customs service at least twenty four hours before the aircraft or cargo arrives at an Australian port. All products imported to Australia are cleared by the Customs and importers are liable for attaining an official customs clearance for consignment of products. The online quarantine and Inspection clearance activities, all consignments worth over 1,000 dollars are entered through an import declaration which is then electronically transmitted to customs, via the integrated cargo system (ACS, 2009). Import declarations are subjected to entry processing costs, with the declaration through electronic means being cheaper and timely than the declaration through a physical document. Infrequent or first time importers attain services of customs brokers, complete the import declaration and also perform numerous tasks connected with the import procedure on behalf of the importer. As a consequence of being online connected to customs computer systems, these brokers have access to reduced processing costs. Pre-shipment inspections are needed when mandated by the governments of importing nation. The Australian government emphasizes that pre-shipment inspections are important because they make sure that the fee charged by exporter reflects the actual value of the products, prevents poor quality goods from entering the country and alleviate efforts to prevent imbursement of custom duties (AQIS, 2009). Conclusion Online retail store logistics activities has the potential of reducing product costs and adding value to time and utility in sourcing operations, supplier selection, evaluation and procurement. They are also beneficial in international transportation of goods and customs, quarantine and inspection clearance in Australia. Improvements of procurement processes via online procurement inn business to business markets reduces the costs incurred in the identification and selection of superior suppliers, increases value of purchases and reduce costs of transactions associated with increased process efficiency. Online logistics influences the way in which goods are sold and delivered to consumers. Through placing an order online, customers are able to get their order delivered on time and are also able to instantly track their orders. Trough online quarantine and inspection procedures, Australia is able to conduct quicker clearance of containers and ensure minimum interference of their movement in the country. There is also electronic cargo reporting and clearance scheme through which importers and forwarders electronically report incoming cargo prior to its arrival. References Baily, H., (2008). Procurement principles and management. Harlow, England: Prentice Hall Financial Times. Angeles, R., (2000). Revisiting the role of internet-EDI in the current electronic commerce scene. Logistics information management, 13(2) 50-57. BTRE (2001) Logistics in Australia: A preliminary analysis. Bureau of transportation and regional economics, Canberra, http://btre.gov.au/docs/wp49-contents.html. Alshawi, S., (2001). Logistics in the internet age: towards a holistic information and processes picture. Logistics information management,14(4), 235-241. Ablbjorn, S., & Halldorsson, A., (2002). Logistics knowledge creation: reflections on context and processes. International journal of physical distribution and logistics management, 32 (1), 22- 40. Graham, G., & Hardaker, G., (2000). Supply chain management across the internet. International journal of physical distribution and logistics management, 30(3/4), 286-295. Williams, T., & Ozment, J., (2002). The electronic supply chain: the impact of the current and future structure of strategic alliances, partnerships and logistics leadership. International journal of physical distribution and logistics management, 32( 8), 703-719. Narendra, A., Smith, A., (2009). Retail Supply Chain Management.Quantitative Models and Empirical Studies. Series: International Series in Operations Research & Management Science, Vol. 122, 35-40. Australian Quarantine and Inspection Service (AQIS)., (2009). Clearance at Australian Quarantine and Inspection Service. Retrieved on December 5, 2011 from www. Affa.gov.au Australian Customs Service (ACS). Customs regulations. Retrieved on December 5, 2011 from www.customs.gov.au/travel/unaccomp.htm Graham, D., & Manikas, I., (2010). E-logistics and E-supply chain management: Applications for evolving business. London: Routledge. Bayles, D., (2008). E-commerce logistics and fulfillment: Delivering the goods. Australia: Pearson Education. Aponte, C., & Secul, D., (2007). The vendor compliance handbook. California: The Fashiondex, Inc. Neef, D., (2004). e-Procurement: From strategy to implementation. Colorado: Financial Times Press. Read More