E-commerce in International Trade Impact on Supply Chain and Warehouse Management Kamil Ismagilov Bachelor’s thesis October 2015 Degree Programme in Logistics Engineering Technology, communication and transport
E-commerceinInternationalTrade
ImpactonSupplyChainandWarehouse
Management
KamilIsmagilov
Bachelor’sthesisOctober2015
DegreeProgrammeinLogisticsEngineeringTechnology,communicationandtransport
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Description
Author(s)Ismagilov,Kamil
TypeofpublicationBachelor’sthesis
Date26.10.2015Languageofpublication:ENGEnglishNumberofpages:64
Permissionforwebpublication:X
TitleofpublicationE-commerceinInternationalTrade:ImpactonSupplyChainandWarehouseManagement
DegreeprogrammeLogisticsEngineering
Tutor(s)PakarinenRisto,FranssilaTommiAssignedbyJAMKUniversityofAppliedSciencesAbstract
Thisthesisstudiedhowtheintroductionofe-commerceintheinternationaltradehasinfluencedthesupplychainmechanismsandlogisticsoperationsintheglobaltradecontext.Asaresult,thestudyraisestheissueoftherelationshipbetweenthematerialflowandinformationflow.
Themethodologyofthepaperwasthatofaninductivecasestudywithqualitativemethodsofdatacollection.Basedonaliteraturereviewandaseriesofinterviews,thedeterminantsofe-commerceinfluenceweredefined.Casesofsupplychainmanagementandwarehouseoperationswereusedtovalidatetheframework.Theoutcomeontheresearchwastheoryabouttherelationshipbetweentheinformationandmaterialflow.Thetheoryisbasedonthepresentexperienceanddevelopmentofthekeyissuesoftheresearch.Thetheorypredictsthefuturedevelopmentsine-commerce,supplychainmanagementandwarehouseoperations.Althoughthetheorywasbasedonadeepliteraturereviewandsemi-structuredinterviews,therewerecertainlimitations.Thestudydidnottakeintoaccountseveralfactorsintheinternationaltradeoperations.Forexample,monetary,politicalandeconomicissueswerenotstudied.Companiescouldusethetheoryproposedbythisworktodeveloptheirstrategicsupplychainandwarehousemanagementplans.However,agreatervalueofthisresearchisthatstudentscanbecomefamiliarwiththepresentedissueandstudyitfurther.
Keywords/tags:e-commerce,internationaltrade,supplychain,warehouseoperations,informationflow,materialflowMiscellaneous\Asas
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Contents
1 Introduction..........................................................................................................6
1.1 Motivation.....................................................................................................7
1.2 ResearchMethods.........................................................................................8
1.3 ResearchProblems........................................................................................9
1.4 ResearchQuestions.....................................................................................10
1.5 Importanceofthestudy..............................................................................11
2 Theoreticalbasis..................................................................................................11
2.1 InternationalTrade......................................................................................11
2.1.1 SilkRoad..............................................................................................12
2.1.2 ModernTrade......................................................................................12
2.2 E-commerce................................................................................................14
2.2.1 ClassificationofE-commerceModels..................................................15
2.2.2 E-commercelogistics...........................................................................16
2.2.3 E-fulfilment..........................................................................................17
2.2.4 E-commercebarriers...........................................................................18
2.3 SupplyChainandWarehouseManagement...............................................19
2.3.1 SupplyChainManagement.................................................................19
2.3.2 SupplyChainInnovation......................................................................23
2.3.3 WarehousemanagementandInnovation...........................................26
3 LiteratureAnalysis...............................................................................................28
4 Interviews............................................................................................................31
4.1.1 Qualitativeinterviewtypes.................................................................31
4.1.2 Preparation..........................................................................................32
4.1.3 Intervieweeselection..........................................................................34
4.1.4 Conductinginterviews.........................................................................37
4.1.5 Analysisofinterviews..........................................................................39
5 Results.................................................................................................................43
6 Discussion............................................................................................................45
7 Conclusion...........................................................................................................48
8 References...........................................................................................................50
9 Appendices..........................................................................................................53
9.1 Appendix1...................................................................................................53
9.2 Appendix2...................................................................................................55
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9.3 Appendix3...................................................................................................55
9.4 Appendix4...................................................................................................57
FIGURES
FIGURE1.Researchstructure.......................................................................................7
FIGURE2.Inductiveapproachstructure.......................................................................8
FIGURE3.FivebasiccomponentsofSupplyChainManagement...............................20
FIGURE4.ManualEDIDocumentExchange(Source:OpenTextGXS)........................24
FIGURE5.EDIDocumentExchange(Source:OpenTextGXS).....................................24
FIGURE6.Exampleofchanneling...............................................................................26
FIGURE7.Currentsituationisanalyzed......................................................................31
FIGURE8.Intervieweeselectionguide.......................................................................35
FIGURE9.Interviewdataanalysisprocessmap.........................................................40
FIGURE10.AnalysisClassificationTree......................................................................41
FIGURE11.Trendsarepredicted................................................................................47
TABLES
Table1.Scientificliteratureonthetopicofe-commerceininternationaltrade.
(Burinskiene,2011).....................................................................................................10
Table2.ClassificationsofE-CommerceModels.(RayportandJaworski,2001;Kinder,
2002)...........................................................................................................................16
Table3.ShortListofcompaniesfromtwoexhibition................................................36
Table4.Listofinterviewedcompanies.......................................................................38
Table5.Descriptionofimplementedanalysisoftheinterviews(Leechand
Onwuegbuzie,2008)...................................................................................................39
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Abbreviations
B2B–BusinesstoBusiness
B2C–BusinesstoConsumer
B2G–BusinesstoGovernment
C2C–ConsumertoConsumer
C2B–CustomertoBusiness
EDI–ElectronicDataInterchange
G2C–GovernmenttoConsumer
G2G–GovernmenttoGovernment
GATT–GeneralAgreementonTariffsandTrade
GDP–GrossDomesticProduct
ICT–InformationandCommunicationsTechnologies
IMF–InternationalMonetaryFund
OECD–OrganizationforEconomicCo-operationandDevelopment
SCM–SupplyChainManagement
SME–SmallandMedium-SizedEnterprises
WMS–WarehouseManagementSystem
WTO–WorldTradeOrganization
XML–ExtensibleMarkupLanguage
VAL–ValueAddedLogistics
VAS–ValueAddedServices
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1 Introduction
Overthelastfewdecades,internationaltradehasexperiencedseveralrapid
changes.Thesechangescharacterizethedynamismofthemoderntrendsin
internationaltrade.Evidently,thesignificanceofe-commerceinthedevelopmentof
internationaltradehasagrowingtendency.Burinskienė(2011)statesthatunderthe
modernglobalizationcircumstances,theapplicationofinformationand
telecommunicationtechnologieshasbecomeacrucialfactorofdevelopmentinboth
internationaltradeandeconomyingeneral.Forthepastyears,e-commercehashad
itsinfluenceontheinternationaltradeandlogisticsoperations.Therapidgrowthof
e-commerceintheglobalizedworldhasledtoagreatpressureonthelogistics
operations.Manycompanieshavehadtoadjusttheiroperations.Supplychain
strategiesandwarehouseoperationshavebeenmodifiedrapidly.
Itisnoticeablethatthoselogisticsoperationsareevolvingwiththeimplementation
ofnewtechnologiesandthatthereisgrowthintrading.Researchhasintroducedthe
ideathatthemaindrivingforceofchangesise-commerce.Inthisresearch,thefocus
wasonB2BandB2Cbusinessmodels.
Thestudyassumedthattherecentchangesinlogisticsoperationswereunderthe
influenceofe-commerce.Hence,thestudyfocusedontherelationshipof
informationalandmaterialflows.
Thestudywasdividedintothreetimeframes,asshowninFigure1.First,thehistory
ofinternationaltradeandthedevelopmentofe-commerceandtheirrelationto
supplychainmanagementandwarehouseoperationswerereviewed.Secondly,the
currentsituationinlogisticscompaniesregardingthisphenomenonwasanalyzed.
Finally,theroleofe-commerceinthedevelopmentoflogisticstrendswas
examined.Thesetimeframeswereanalyzedinordertofindcertainpatternsand
developthetheory.
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FIGURE1.Researchstructure
ResearchwasperformedastheBachelor`sgraduatethesisfortheLogistics
departmentofJAMKTechnology.
1.1 Motivation Personalinterestinthematterhelpedtochoosethistopic.Duringtheauthor’s
exchangeperiodinSouthKorea,hetookseveralclassesrelatedtointernational
trade.Theseclassesrevealedtheimportanceoflogisticsfromtheeconomicpointof
view.Whilereadingallthearticlesrelatedtothisissue,theauthordiscoveredthat
therewereonlyafewexploringmorethanoneidea.Mostofthearticlesfocusedon
thesuccessfullyimplementedsolutionsbasedone-services.Thus,theauthor
decidedtoconductastudythatwouldcoveralltheseexamplesinonepiece,
examinethem,andpresentoneconstantvectorofthefuturedevelopmentofthe
industry.Hopefully,thosewhoreadthisstudy,willatleastbecomefamiliarwiththis
issue.Thehighestachievementwillbeifthestudyinspirespeopletolookintothis
matterfurther.
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1.2 ResearchMethods
Theaimofthestudywastoprovideabetterunderstandingofthee-commerce
phenomenon.Anotheraimwastoexamineitsinfluenceonsupplychain
managementandwarehousing.
Fromthebeginning,itwasclearthatthistopicrequiredacomprehensiveliterature
reviewaswellasaqualitativein-fieldstudyinordertoreachtherootsofthis
matter.Inordertoprovideacompletepictureaninductiveapproachanda
qualitativeresearchmethodwereselectedforthestudy.
Aninductiveapproachfirstlyinvolvesmakingspecificobservations.Moreover,data
relevanttotheresearchedtopiciscollected.Onceasubstantialamountofdatahas
beencollected,certainpatternscanbediscoveredinthedata.Next,atentative
theoryisdevelopedthatcouldexplainthosepatterns.Schutt(2006)summarizesthe
processofasinductiveapproachasfollows:
Whenresearcherstakeaninductiveapproach,theystartwithaset
ofobservationsandthentheymovefromthoseparticular
experiencestoamoregeneralsetofpropositionsaboutthose
experiences.Inotherwords,fromdatatotheory,orfromthe
specifictothegeneral.
Figure2.outlinesthestepsinvolvedwithaninductiveapproachtoresearch.
FIGURE2.Inductiveapproachstructure.
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Qualitativeresearchischaracterizedbythecollectionandanalysisoftextualdata
(surveys,interviews,focusgroups,conversationalanalysis,observation,
ethnographies(Olds,2005)),andbyitsemphasisonthecontextwithinwhichthe
studyoccurs.Theresearchquestionsthatcanbeansweredbyqualitativestudiesare
questionssuchas:
• Whatisoccurring?
• Whydoessomethingoccur?
• Howdoesonephenomenonaffectanother?
Answerstothesequestionsgenerallyrequirerich,contextualdescriptionsofthe
data.Byimplementingqualitativeresearchmethods,theauthorreviewsliterature
andbringstothelightquestionsandtheoriesoftheresearchtopic.Literatureis
analyzedusingaqualitativecomparativeanalysis.Inthisstudy,aseriesofsemi-
structuredinterviewsthatallowedaskingopen-endedresearchquestionswas
implementedinordertosupporttheliteraturereview..Theinterviewswere
analyzedbycombiningconstantcomparisonandqualitativecomparativeanalyses.
Whenusingaqualitativemethod,apatternisanalyzedafterwhichtheoryis
presented.Thetheoreticalperspectiveofastudydescribestheapproachusedto
explainrealityinrelationtopastdevelopmentsandfuturetrends.Thedatais
examinedwithoutpreconceptionsoftheexistingtheoryorpre-determined
categories.Thisallowsthemesorcategoriestoemergefromthedata.Thisprocess
allowsnewinsightthatwouldnotbepossibleifanexistingtheoryorconceptwere
imposedonthedata.(Crotty,2003).
1.3 ResearchProblems
Thesurveyofliteraturepublishedbyleadingworldpublishersshowedthatonly6%
ofallresearchfocusedonthetopicoftheapplicationofe-commerceininternational
trade(Burinskiene,2011)(SeeTable1).ThesameresultcamefromtheGoogle
Scholarplatform:forthesearchterm“internationaltrade”thesearchengine
provided2800000results,whereasfor“internationaltrade,e-commerce”theresult
was153000.Theratiobetween153000and2800000is5.5%.
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Table1.Scientificliteratureonthetopicofe-commerceininternationaltrade.(Burinskiene,2011)
YearsLiteraturededicatedto
internationaltrade
E-commerceresearchinthe
literaturededicatedto
internationaltrade
1976-1980 1562 4
1981-1985 2001 3
1986-1990 2823 12
1991-1995 3568 18
1996-2000 2148 353
2001-2005 2139 436
2006-2010 1174 108
Total 15415 934
% 100% 6,1%
Theconclusionisthatthereisalackofworksinscientificliteratureabouttheuseof
e-commerceininternationaltrade.
Performinginterviewswastimeconsumingandrequiredacertaintravelbudget.A
majordrawbackintheresearchwasthattherewasaninfluenceofbiasesfromthe
interviewsandliteraturereview.Nevertheless,asmentionedinthepreviouschapter,
theauthortriedtobeopen-mindedandfocusedonthedataitself,ratherthanon
theconclusionsoftheothers.
1.4 ResearchQuestions
Specifically,thestudyattemptedtoanswerthefollowingquestions:
I. Whatistheinfluenceofe-commerceoninternationaltrade?
II. Canmanagerialskillsine-commercebringacompetitiveadvantage?
III. WhatistheeffectofE-commerceontheglobalsupplychain?
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IV. WhatistheeffectofE-commerceonsupplychainmanagementand
warehouseoperations?
1.5 Importanceofthestudy
Thestudycouldshedlightontheproblemoftherelationshipbetweene-commerce
andlogistics.Asaresult,itcouldtracetheimpactofe-commerceonlogistics.This
studyreflectsmodernissuesinsupplychainandwarehousemanagement.Logistics
operationsareapartoftheglobaltrade,thereforelogisticiansneedtoreactsingle-
mindedlytonewchallengesandtackleproblemsthataremorecomplicated.The
developmentlevelofinformationtechnologiesisgrowing,andtheneedsare
perceivedinanewway,whichisapparentinthepracticeofe-commerce.
Apparently,theimportanceofe-commercetechnologiesinthedevelopmentof
internationaltradeisimmenseandhasatendencytogrow:underthemodern
globalizationcircumstances,theapplicationofinformationandtelecommunication
technologieshasbecomeacrucialfactorofdevelopmentinboththeinternational
tradeandeconomyingeneral.
2 Theoreticalbasis
Inqualitativeresearch,documentanalysisisanimportantpartofthestudy.Inthis
research,thetheoreticalbasisprovidesthegroundideasforabetterunderstanding
ofthestudyoutcomes.Thetheoreticalbasiswasusedasachanneltothepast.
Milestonesoftheinfluentialeventsarediscussedinthischapter.
2.1 InternationalTrade
Throughouthistorywecanseethattradehasbeenthedrivingforceofprogressand
thetooltospreadinnovationsanddiscoveries.Ancientmerchantstravelledmany
daysandlongdistancestofindexoticanduniqueitemsinordertoincreasetheir
wealth.Forthesepeopletradewasawayoflive.Itisknownthatsometradesmen
werericherthantheirrulers.Anunknowntrader,whoselifewasdescribedinabook
called“IsaactheJew”,writtenin10thcenturybythePersianauthorBuzurg,hada
cargoworthanestimatedmilliondinars–anincredibleamountgiventhatamiddle
classfamilycouldhavesubsistedon24dinarsperannum(Clarke,2015).
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2.1.1 SilkRoad
Alittleinsightintotheworldoftheancienttradeiscrucialforunderstandingthe
merchants`incentivesfortrading.Inthecontextoflogistics,thefamousSilkRoadis
reviewedhere.Judgingbytheroad’sname,silkwasthemainandmostvalued
commodity.Thankstoitslittleweight,compactness,enormousdemandandhigh
price,itwasidealfortradeandlong-distancetransportation.Mainlythegoods
movedfromtheEasttotheWest.However,caravansrarelytraveledallthewaydue
tosecurityreasons.Therefore,throughouttheroutecitieswithbigmultilingual
bazarsemerged.Thegovernorsofthesecitiescollectedtaxforasafepassageand
participationinthebazar.
ThegreatestvalueoftheSilkRoadwastheexchangeofculture.Ideasrelatedtoart,
religion,philosophy,technology,language,science,architectureandeveryother
elementofcivilizationwereexchangedontheSilkRoadalongwiththecommercial
goods.
ThelessonlearntfromtheinsightofSilkRoadisthattradeisacrucialpartofthe
world’seconomyandhumancivilization.SilkRoadprovidesagreatexamplewhere
informationtraveledalongwiththematerialflow.Thegreatestsourceofknowledge
wasbooks.WiththeintroductionoftheInternet,weenteredintoaneweraoftrade
wherenewrulesemerge.Withtheintroductionofe-commercetechnologies,agap
betweentheinformationalandmaterialflowemerged.
2.1.2 ModernTrade
Moderninternationaltradeistiedtotheeconomiesofcountrieswillingto
participateinglobaltrade.Thewell-beingofsomecountriesishighlydependenton
tradingactivitiesthatthecountriesareperforming.Theprinciplesofthemodern
internationaltradewerecreatedduringandaftertheSecondWorldWar.Duringthe
SecondWorldWar,severalcountriesbenefitedfromsellingarmorytotheiralliances.
However,mostofthegoodsweredeliveredasloans.Thus,inordertomakesure
thatthedebtswouldbepaidoff,thecountriescreatedtheInternationalMonetary
Fund(IMF)andtheWorldBankattheBrettonWoodsConferenceinJuly1944.
Moreover,theysignedtheGeneralAgreementonTariffsandTrade(GATT)atan
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internationalconferenceinGenevainOctober1947.Inadditiontothat,the
countriesthathadlostthewarhadtobecontrolledandtoldwhattheycouldand
couldnotdo.
In1995,theWorldTradeOrganization(WTO)replacedGATT.Accordingtothe
officialwebsite,theWorldTradeOrganization(WTO)istheonlyinternational
organizationdealingwiththeglobalrulesoftradebetweennations.Itsmainfunction
istoensurethattradeflowsassmoothly,predictablyandfreelyaspossible.
Forcountriesthathaveadoptedtheinternationaleconomicpoliciespromoting
greatertradeandinvestment,suchasjoiningtheWTOorreducingtradebarriersby
bilateralagreements,evidencesuggeststhatthishasinfluencedonrapideconomic
growthandincome.Forexample,accordingtotheOfficeoftheU.S.Trade
Representative,from1994to2000increasedexportsaccountedforapproximately
one-fifthoftheU.S.economicgrowth,andnearlyone-thirdoftheU.S.growth
between1992and1997.Forthedecadeendingin1999,theOrganizationfor
EconomicCo-operationandDevelopment(OECD)reportsthatcountriesthatare
“moreopen”achieveddoubletheannualaveragegrowthofothercountries.Even
developingcountrieshavebenefitedfromthegreaterinternationaltradeand
investmentastheCouncilofEconomicAdvisersreportedin1999:
Datafrom1974-1985and1986-1992showdevelopingcountries
withinward-orientedeconomicpoliciesexperiencinglessannual
growthofGDP(GrossDomesticProduct)percapitathanthosewith
outward-orientedeconomicpolicies.
Governmentsandtheimport/export,shipping,logisticsandtransportcommunities
haveestablishedanexhaustive,butbynomeanscomplete,rangeofagencyand
country-specificregulatoryandoperationalrequirementsforinternationaltrade.
Internationalproductionfragmentationbecamerealisticwiththeinceptionofthe
informationandcommunicationstechnology(ICT)revolution,whichenabledthe
coordinationofspatiallydispersedcomplextasksatarelativelylowcost.Inother
words,theinformationflowhasincreasedthespeedanddecreasedthecost.
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Theinadequateandinappropriateusageofe-commercetechnologiesaffectsthe
developmentoftheinternationaltrade.Thedevelopmentofinstrumentationthat
allowsevaluatingtheperspectivesandopportunitiesoftheapplicationofe-
commercetechnologiesisanimportantpreconditioninthedevelopmentof
internationaltrade.Solutionswhichareorientedtotheefficiencyofthe
internationaltradeandtheincreaseofcompetitionusuallyexploitinonewayor
anothertheopportunitiesprovidedbye-commercetechnologies.
2.2 E-commerce
Theterme-commerceisquitebroad,butthedefinitionisgivenalongsidethecontext
oftheresearch.Inthebeginning,ahistoricoverviewispresented.
Thefundamentofe-commerceistheInternet.TheoriginsoftheInternetgobackto
the1960slongbeforethedaysofthemoderne-commerce.Thepredecessorofthe
Internet,APRANETwasestablishedasaresearchnetworklinkingonlyafewresearch
institutionsintheUSA.(Andrews,2013)
ThecommercialuseoftheInternetwasonlyallowedfromtheearly1990.Thus,itis
agreedthattheevolutionofe-servicesstartedaroundthattime.Amongthefirst
largecommercialpartiestakingadvantageoftheInternetpossibilitieswereDell,
CiscoandAmazon.Afewyearslater,however,manybusinessorganizationswere
attemptingcommerciallyontotheInternet,leadingtoanescalationofe-commerce.
ThefirstwaveofE-commercewasalittlemorethana“pamphlet”withstatic
homepages.Thisprovidedthebasicfunctionofdeliveringcontentandcontactsto
thecustomers.ThesecondwaveofE-commercewasabletohandletransactions
electronically,suchasbuyandsellfunctions,overtheInternet.Itwasamajor
milestonebecausethereweremanyissuesregardingthesecurityofpayments.The
firstcompanythatmanagedtoofferasecurepaymentmethodwasPAYPAL.
(GrabianowskiandCrawford,2005).ThethirdwaveofE-commercewasdesignedto
integratewiththecustomers,suppliers,businesscommunitiesandother
stakeholdersinrealtimeforsharingandexchanginginformation(Fingar,2000).
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E-commerceincludesanypracticeofelectroniceconomicactivities,suchasWeb
services,orevenmerelyapresenceofwebinformationwiththepossibilityofleading
totransactionswiththehelpoftelephoneandfaxmachines(Coffee,1998;Riggins
andRhee,1998;Riggins,1998).Thisunderstandingofe-commerceisquiteoutdated.
ThisstudysupportsthefollowingdefinitionofE-commerce:
…E-commercecanbedefinedastheuseofelectronicnetworked
computer-basedtechnologytobringnewproducts,services,or
ideastomarket,andsupportandenhancebusinessoperations…
RobandCoronel,2009
Theonlyadditionisthatmobile-basedtechnologiesarealsopartofcomputer-based
technologies.
IndustryorganizationsupportersandtheeconomicefficiencytheorysuggestthatE-
commerceisabletoreducethetransactioncostsandsearchcosts(Kalakotaand
Whinston,1997;Tapscott,2000;JanssenandSol,2000).Itwillfurtheracceleratethe
shiftofpowertowardthecustomers,whichwillleadtoperfectcompetition,and
thereforereducetheoverallprofitabilityofthefirmsandtheindustryasawhole
(Slywotzky,2001;Porter,2001).
2.2.1 ClassificationofE-commerceModels
Thereareseventypesofbusinessmodelswheree-commerceispresent(seeTable2)
(RayportandJaworski,2001;Kinder,2002).
BusinesstoBusinessandBusinesstoCustomerarethekeymodelsinmostofthe
markets.CustomertoBusinessandCustomertoCustomerareconsumer-centered
models.Customer-to-Businessreferstocaseswhereindividualsareformingbuyer
groupsforbetterbargainswithonlinesuppliers,e.g.onlinecoursesandtravelling
tickets.Customer-to-Customerreferstoacommunityformedtopursuespecial
interestswheretheyexchangeideas,servicesandproductsasindividuals.For
example,tori.fianddifferenttopicorientedforums.Thelastthreegroupsreferto
governmenttransactionsamongbusinesses,otherauthoritiesandconsumers.
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However,somescholarsincludeBusiness-to-GovernmentintotheBusiness-to-
Businesscategory.Thegovernmentisassociatedwithabusinesscontractor.This
researchmakesthisassumptionandincludesB2GintotheB2Bcategory.
Table2.ClassificationsofE-CommerceModels.(RayportandJaworski,2001;Kinder,2002)
TypesofE-commerceModels Description
B2B–Business-to-Business Estimatedabout75%ofE-commerce
B2C–Business-to-ConsumerMainlyforhomeshopping,banking,on-linebrokerage,travel.
C2B-Customer-to-BusinessC2Breferstoagroupofindividualsformingasabuyergrouptotransactactivitieswithbusinesses,e.g.Marcata.com,voxcap.com
C2C-Consumer-to-ConsumerOn-linecommunityforresearch,salesoranyotherexchange,e.g.tori.fi
B2G–Business-to-
GovernmentTenderingviaE-commerce,Customsdeclaration
G2G–Government-to-
GovernmentElectronicGovernment,On-lineschool,GlobalICTplanningandimplementation
G2C–Government-to-
Consumer
Electronicvotes,TravelinformationKiosk,
Electroniclicensesrenewal
Thisstudyfocusesonthefirsttwomodels:B2BandB2C.Thereasonforthisisthat
thesetwomodelshavethegreatestimpactonthemarketsand,hence,onglobal
trade.
2.2.2 E-commercelogistics
Thegrowthofe-commercehasaprofound impactonthetraditionalsupplychains,
wheretheinformationalandmaterialflowswerecombined.Inthecaseofe-
commerceoperations,theinformationalandmaterialflowsaredividedbutoperated
dependently.Thischangesthesupplychainfroma“push”toa“pull”process.The
physicalplaceswherethischangeisfeasiblearethedistributioncentersor
17
warehouses.Theywerepreviouslystructuredtohandlelargeandprearranged
shipmentsatfixedtimestofixeddeliveryaddresses.Thekeyfactorisnowadirect
deliverytotheconsumers(B2C)and,assuch,thefulfilmentofconsumer
requirements.
Nowconsumersareplacingtheirindividualorderswhichhavetobeprocessed
directlybythedistributioncenter.Duetothischange, thenumberofordersinthe
distributioncenterhasincreasedsubstantially.Moreover,eachorderusuallyconsist
ofsmallamountofproducts,whichinturnaffectstheoverallorderlinesparameters.
2.2.3 E-fulfilment
Ine-commerce,thedistributionprocessisnolongerjustanefficientlogistics
operation,butalsoameanstosupporttheexpectationsofthecustomer.The
Internetgivesanoptiontochangethedecisiontothecompetitor’ssidequickly.
Thus,itisimportanttomeetthecustomers’expectations.
Thus,E-commerceischangingthecommercialchannelintoadistributioncenter.As
aresult,reliablelogisticsservicesaremoreimportantthanever.Errorsinthe
logisticsprocesswillhaveadirectimpactontheconsumerandlateronanyother
follow-uppurchases.
Inordertomeetconsumerexpectations,manysupportingactivitieshavetobe
implemented.Theseincludeservicesthataddvaluetotheproducts,control
shipmentsorfulfiladministrativeduties.Theseservices,generallyreferredtoas
“ValueAddedLogistics”(VAL)and“ValueAddedServices”(VAS),havealready
increasinglybeenimplementedinthetraditionaldistributioncenters,particularly
whenitcomestointernationaloperations.Suchadistributioncenterwithahigh
levelofVAL/VASactivitieshasbeennamedaLogisticsServiceCentre.Ine-
commerce,however,thescopeandintensitywithwhichVALandVASareneeded
areofadifferentmagnitude.Thedirectimpactoncustomersatisfactionandsales
performanceisthemainreasonforthis.Theresultistheemergenceofanenhanced
typeoflogisticsserviceoperation,callede-fulfilment.Thee-fulfilmentcenter
distinguishessuchadditionalprocessesincomparisontoabasicdistributioncenter
andthetraditionallogisticsservicecenterwhereVALandVAShavealreadybeen
18
implemented.Theapplicationreceivingmostoftheattentionforreal-time
enterprisesisthesupplychain.Forexample,HermesFulfilment,acompanythat
providesE-fulfilmentsolutionsforRussianconsumers,hasinstalledareal-time
enterprisesoftwarepackageforreal-timesupplychaintracking.HermesFulfilment
usesareal-timesystemfromYantraInc.tomovedataacrosspaymentprocessing,
authorizationandsettlementsystemsandtriggeralertsifpackagesdonotarriveat
theirdestinationaspromised.Inaddition,thissystemprovidesanopportunityto
followthereversesupplychaindirection.
2.2.4 E-commercebarriers
Complicatedcustomsclearanceproceduresaregeneraldifficulttoallinternational
trade.However,theycanbeevenmoreproblematicforB2Ce-commercetradersas
theysendmanysmallconsignments.Thesecompaniesareoftensmallbusinesses
and,asaresult,theyaremoresensitivetothecustomsclearancecosts.Some
companieshavestatedthatcustomsprocedureshavecontributedtotheirdecisions
nottoentercertainmarkets.
AccordingtoDIST(2005),thefactorsthattendtoinhibittheadoptionofinformation
andcommunicationtechnologiesinproductioninclude:
•Resistancefrommanagement
•TightprofitmarginswhichmakeitdifficulttofundinvestmentinanIT
infrastructure
•LackofITawareness
•Lackofemployeeeducationandtraining
•Degreeoforganizationalchangerequired
•AbeliefthattheindustryisdoingwellwithoutIT
Corruptionisamajorproblemintheinternationaltradeaswell,ofteninrelationto
thecustomsprocedures,anditrelatestoanythingfrombriberytothedisappearance
ofitems.Anincreasingnumberofbusinessesbelievee-commercetobeparticularly
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sensitivetocorruption,asitisoftenmanysmallconsignmentsthatareshipped,
whichareeasiertolose,andsmalle-commercecompaniesoftendonothaveenough
employeestofollowupalltheproblems.
Lackofstandardsisgenerallyviewedasanimpedimenttothetraditionaltrade,and
thesameappliestoe-commerce.Thisimpedestheadoptionofvariousonline
solutionsandmakestheuseofe-invoicesdifficult.
2.3 SupplyChainandWarehouseManagement
2.3.1 SupplyChainManagement
Beforeglobalizationforcedcompaniestodesigntransportationtechnologies,
countriesproducedmostofwhattheyconsumed.Bairoch(1990)givesanexampleof
afeasibleimpactoffeasible(material)innovationsonglobaltrade.However,
efficientSupplyChainManagementisanonmaterialwaytoincreasetheproductivity
oftradingoperations.
KeithOliverfirstcoinedtheterm“supplychainmanagement”in1982(Heckmann,
Shorten,andEngel,2003).However,theconceptofasupplychaininmanagement
hadbeentherelongbefore.Thisstartedalreadywiththecreationoftheassembly
line.Backthen,organizationspaidattentiontointernaloperationsonly.Therefore,
thesupplychainofthateraneededchangestowardstheglobalapproachaswellas
re-engineeringandcostreductionprograms.Indecadessince,SCMhasreceived
considerableattention,initiallystartingwithinthebusinesscommunity.Fromthe
early1990s,academicresearchstartedfollowingsupplychainsandtriedtoestablish
sometheoreticalstructure(ChenandPaulraj2004).
ThedefinitionofSupplyChainManagementaccordingtoHarald(1996)isthe
managementofanetworkofinterconnectedbusinessesinvolvedintheultimate
provisionofproductandservicepackagesrequiredbyend-customers.The
companiesororganizationsthatparticipateinthesupplychainare“linked”together
throughmaterialandinformationflows.Materialflowinvolvesthetransformation,
movementandstorageofgoodsandmaterials.Informationflowallowsthevarious
20
supplychainpartnerstocoordinatetheirlong-termplansandtocontroltheday-to-
dayflowofgoodsandmaterialupanddownthesupplychain(Handfield,2011).
Figure3showsthefivebasiccomponentsofSCM.
FIGURE3.FivebasiccomponentsofSupplyChainManagement
Plan.Aplanorstrategymustbedevelopedtodesignthewayagivengoodorservice
willmeetcustomers’requirements.Asignificantportionofthestrategyshouldfocus
onplanningaprofitablesupplychain.
ThisisthestrategicportionofSCM.Companiesneedastrategyformanagingallthe
resourcesthatgotowardmeetingcustomerdemandfortheirproductorservice.A
bigpieceofSCMplanningisdevelopingasetofmetricstomonitorthesupplychain
sothatitisefficient,costslessanddelivershighqualityandvaluetocustomers.
Develop.Itinvolvesbuildingatightrelationshipwithkeysuppliers.Thisphase
involvesnotonlyidentifyingreliablesuppliersbutalsoplanningmethodsfor
shipping,delivery,andpayment.
Companiesmustchoosesupplierstodeliverthegoodsandservicestheyneedto
createtheirproduct.Therefore,supplychainmanagersmustdevelopasetofpricing,
deliveryandpaymentprocesseswithsuppliersandcreatemetricsformonitoringand
improvingtherelationships.Andthen,SCMmanagerscanputtogetherprocessesfor
managingtheirgoodsandservicesinventory,includingreceivingandverifying
shipments,transferringthemtothemanufacturingfacilitiesandauthorizingsupplier
payments.
Make.Atthethirdstage,productismanufactured,tested,packaged,andscheduled
fordelivery.Thisisthemanufacturingstep.Supplychainmanagersschedulethe
21
activitiesnecessaryforproduction,testing,packagingandpreparationfordelivery.
Thisisthemostmetric-intensiveportionofthesupplychain-onewherecompanies
areabletomeasurequalitylevels,productionoutputandworkerproductivity.
Deliver.Then,atthelogisticsphase,customerordersarereceivedanddeliveryof
thegoodsisplanned.Thisfourthstageofsupplychainmanagementstageisaptly
nameddeliver.
ThisisthepartthatmanySCMinsidersrefertoaslogistics,wherecompanies
coordinatethereceiptofordersfromcustomers,developanetworkofwarehouses,
pickcarrierstogetproductstocustomersandsetupaninvoicingsystemtoreceive
payments.
Return.Duringthisstage,customersmayreturndefectiveproducts.Thecompany
willalsoaddresscustomerquestionsinthisstage.
Thiscanbeaproblematicpartofthesupplychainformanycompanies.Supplychain
plannershavetocreatearesponsiveandflexiblenetworkforreceivingdefectiveand
excessproductsbackfromtheircustomersandsupportingcustomerswhohave
problemswithdeliveredproducts.
Amainissuethatsupplychainstriestosolveisthatthesebasiccomponentsfrom
differentorganizationshavetoworktogethersmoothly.Manyorganizationsina
supplychainhavetheirownobjectivesandtheseareoftenconflicting.Supplychain
managementisastrategythroughwhichdifferentfunctionsalongthesupplychain
canbeintegrated.
ThepurposeofSCMistocoordinatetheactivitiesofvariousplayersinthechain.
AccordingtoCooperandEllram(1993),asupplychainmanagementisawell-
balancedandwell-practicedrelayteam.Suchateamismorecompetitivewheneach
playerknowshowtobepositionedforbetteroverallperformance.
Toensurethatthesupplychainisoperatingasefficientaspossibleandgenerating
thehighestlevelofcustomersatisfactionatthelowestcost,companieshave
adoptedSupplyChainManagementprocessesandassociatedtechnology.Supply
22
ChainManagementhasthreelevelsofactivitiesthatdifferentpartsofthecompany
willfocuson:
• strategic
• tactical
• operational
Strategic.Atthislevel,companymanagementwillbelookingtohighlevelstrategic
decisionsconcerningthewholeorganization,suchasthesizeandlocationof
manufacturingsites,partnershipswithsuppliers,productstobemanufacturedand
salesmarkets.
Strategicactivitiesincludebuildingrelationshipswithsuppliersandcustomers,and
integratinginformationtechnology(IT)withinthesupplychain.
Tactical.Tacticaldecisionsfocusonadoptingmeasuresthatwillproducecost
benefitssuchasusingindustrybestpractices,developingapurchasingstrategywith
favoredsuppliers,workingwithlogisticscompaniestodevelopcosteffect
transportationanddevelopingwarehousestrategiestoreducethecostofstoring
inventory.
Benchmarkingandmakingdecisionsregardingproductionanddeliverywouldfall
underthetacticalcategory.
Operational.Decisionsatthislevelaremadeeachdayinbusinessesthataffecthow
theproductsmovealongthesupplychain.Operationaldecisionsinvolvemaking
schedulechangestoproduction,purchasingagreementswithsuppliers,takingorders
fromcustomersandmovingproductsinthewarehouse.Theoperationalcategory
includesthedailymanagementofthesupplychain,includingthemakingof
productionschedules.
Enteringintoanewera,SCMisinaneedforITsolutionsforsupportingdecision-
makingoneachlevel.
23
Foroperationaldecisions,thesystemmustbeabletohandleday-to-daytransactions
ande-commerce.Acrossthesupplychainandprovideinstantinformationonorders
anddailyscheduling.
Formid-termdecisions,thesystemmustfacilitateplanninganddecisionmaking,
supportingthedemandandshipmentplanningandmasterproductionscheduling
neededtoallocateresourcesefficiently.
Forstrategicvalue,thesystemmustprovidetools,suchasanintegratedsupplychain
networkmodel,thatsynthesizedataforuseinhigh-level"what-if"scenarioplanning
tohelpmanagersevaluateplants,distributioncenters,suppliers,andthird-party
servicealternatives.
2.3.2 SupplyChainInnovation
AstheSCMmaturesandmarketsbecomemoreglobal,innovationsinthisindustry
arebecomingmorechallenging.Nevertheless,thereareseveralsuccessfulexamples
ofmulti-nationalcorporationsthatgainbenefitsandmaintaintheircompetitiveedge
duetoefficientSCMs.SomerepresentativesofindustrypractitionersincludeProcter
&Gamble(P&G),Wal-Mart,Coca-Cola,HewlettPackard,Cisco,IBM.Themarketfor
SCMkeepsgrowingduetothemergersamongcorporations,newe-commerce
virtualenterprises,change/expansionincompanyfocus,newcustomerdemandsand
globalcompetition(Wailgum,2007).
ThenecessitytoreengineertheseissueswasrelievedbyimplementingICTsolutions.
ElectronicDataInterchange(EDI)isthecomputer-to-computerexchangeofbusiness
documentsinastandardelectronicformatbetweenbusinesspartners.
Computer-to-computer–EDIreplacespostalmail,faxandemail.Whileemailisalso
anelectronicapproach,thedocumentsexchangedviaemailmuststillbehandledby
peopleratherthancomputers.Havingpeopleinvolvedslowsdowntheprocessingof
thedocumentsandintroduceserrors.Instead,EDIdocumentscanflowstraight
throughtotheappropriateapplicationonthereceiver’scomputerandprocessing
canbeginimmediately.AtypicalmanualprocessshowedonFigure4,withlotsof
paperandpeopleinvolvement.
24
FIGURE4.ManualEDIDocumentExchange(Source:OpenTextGXS)
Figure5showstheEDIprocess—nopaper,nopeopleinvolved
FIGURE5.EDIDocumentExchange(Source:OpenTextGXS)
ThemostcommondocumentsexchangedviaEDIarepurchaseorders,invoicesand
advanceshipnotices.BecausecomputersmustprocessEDIdocumentsratherthan
humans,astandardformatshouldbeimplemented,sothatdifferentplatformscould
exchangeinformationflawlessly.ThereareseveralEDIstandardsinusetoday,
includingANSI,EDIFACT,TRADACOMSandXML.ThemostcommonstandardisXML,
whereXMLstandsforExtensibleMarkupLanguage.MainfunctionofXMLwas
25
describedabove.However,XMLsupportsextrafeatures,suchasencodingand
translationofdata.Additionally,XMLstandardsupportslesssophisticated,Internet
basedapplications.Thisfeatureisgreatforsmallercompanies,whocannotafford
completeEDIsolutions.
Chabrow(2000)givesseveralinterestingexamplesofhowsupplychainsareworking
atgloballevelbyusingamixtureofEDIandXMLtechnologies.Aspecificexampleis
theLucentTechnologiesMicroelectronicsGroup`ssupplychainsystemthatcould
deliversiliconchipshalfwayaroundtheworldin2days.ThisSCMwasdevelopedin
collaborationwithDHL–aglobalshippingcompany.AnotherexampleistheStride
RiteCorp.,a$573millionretailerofathleticandcasualfootwear.ThisSCMcutbya
thirdthetimeittakestoshipshoesfromAsiatoitsdistributioncenterinLouisiana,
Kentucky.Theretaileralsocutitstransportationcostby30%andinventory
turnaroundtimeby25%.Thus,lessmoneyistiedupininventoryandisfreedupfor
otherpurposes.ThiswasaccomplishedbyusinganInternet-basedpackagethatuses
XMLforoverseasdealers.Thissupplychainmanagementsystemkeepstrackof
shipmentsandassemblyoperationsfromChinatothewarehouseinLexington,
Massachusetts.
Themaincharacteristicsoftheseglobalsupplychainsystemsare:
• Web-basedviewingandmanipulationofinformationatallstagesinthe
supplychain
• HeavyuseofEDItechnologybetweenestablishedlargescaletradingpartners
• UseofXMLtoexchangedatabetweenlesstechnologicallysophisticated
overseaspartnersthatlacktheresourcestohandleEDI
Anotherchallengeformodernsupplychainmanagementistheomni-channel
approach.Channelsrepresentthewaysofinteractionbetweensupplierand
customer.Omni-channelapproachmightbeusedinseveralareaswithinthe
company.Forexample,inmarketing,distributionorretail.However,theconceptof
thisapproachincustomeroriented.Customerexperiencesservicesfromdifferent
channelsasone.
26
Figure6showsthedifferenttypesofchanneling.
FIGURE6.Exampleofchanneling.
ThegreatexamplewouldbeanAliexpress.AliexpressisaChineseanalogofAmazon.
Chinesemanufacturesandsellersareusingthisplatformtofindandselltheir
productsabroad.Recently,Aliexpresslaunchedmobileapplicationwiththesame
setsoftoolsasonthewebsite,e.g.ordering,tracking,andcustomerservice.
Basically,therearetwochannels,howevercustomersfeelthatheisjustusing
Aliexpress`sservices.
2.3.3 WarehousemanagementandInnovation
Warehousinghistorybeginsfromtheestablishmentofseatraderoutesbetween
Europeandothercontinents.Increasingamountoftradingcommoditiesrequiredto
buildstoringfacilities.Laterwiththeinventionofsteampoweredtrains,warehouses
infiltrateddeeperintothecontinent.
Twentiethcenturywascrucialperiodinwarehousingdevelopment.Inlate20sand
early30s,firstpalletwasintroduced.Laterin50swhen,mass-productionofforklifts
started,palletsbecameessentialintransportationandhandlingoperations.Inthe
endofthecentury,warehousemanagementsystemshelpedtoabandonpaper-
intensivewarehousecoordination.Instead,ITsolutionsstartedperformingthese
activities.Computerbasedsolutionshelptooptimizefullspectrumofwarehouse
27
operations.Inturn,itallowedtoadjusttofluctuationindemandandtopreparefor
futurechanges.
Todaythereisahugedemandforlogisticsfacilitiesandhandlingoperations.Even
though,demandisvariable,thisissueworthexamininginthee-commercecontext.
Because,thee-commerceoutcomesarepushingexistingwarehouseoperationstoits
limits.
E-commercebusinessmodelsthatwereanalyzedintheE-commercepartofthe
reportarevaryinginsizeofoperations,productfocus,andproductvalueandretailer
model.Thesebusinessdimensionsaffectonwhichfacilitytypesandlocationsare
required.Asindividualcustomerrequirementsevolve,consistentpatternsare
emerging.Requirementsgenerallyfallintooneoffourbuckets,including:
Combinedoperations.Attheoutset,e-commercefulfillmentisamodestoperation.
Thesizeandgrowthoftheconceptisonlyinitsearlystages.Therequirementcan
residealongsidein-storedistributionwithinasinglelogisticsfacility,leveraging
existingsupplychaininvestments.However,combinedoperationsareanadhoc
approach thattypicallydoesnotscalewellasthee-commercefulfillment
requirementexpands.Forpure-playonlineretailers,theearly-stagerequirement
typicallytakestheformofleasedspacewithinmultitenantfacilities.
Sharedfacilities.Asdemandgrows,e-commercefulfillmentcanbecome
cumbersomeandexpensivewithinsmall andsharedfacilities.Many3PLsbring
existingphysicalinfrastructureandhavethespecializedcapabilitiestogrowthee-
commercefulfillmentrequirement.
Dedicatedfacilities.Oncethee-commercerequirementreachesscale,fulfillment
mayrequireoneormultiplededicatedfacilities.Initially,asinglefulfillmentcenter
mayserve,oftenincentralizedlocations.Retailersusingthismodelrecognizethat
onlinefulfillmentanddistributiontostoreshavedistinctneedsandchallenges.This
strategyisparticularlyrelevantformidsizeandlargerretailers,whohavethescaleto
separatestand-alonein-storedistributionandonlinefulfillment.
28
Distributedfulfillment.Asthee-commerceconceptgrows,andfulfillment
requirementsincrease,multiplefacilitiesareneeded.Atthisscale,retailerspursuea
disseminatedfulfillmentstrategy,usingmultiplefacilitiesandlocatingclosertotheir
customers,suchasweseetodaywithlargerretailers.Thebenefitsofthisapproach
arefasterdeliverytimes,moreresponsiveserviceandlowertransportationcosts.
Alibaba,biggestChinesee-commerceplayer,issearchingforstorageinRussian
facilities.Inordertodeliverbestsellerinthesameregioninshortertime.(Korotkin
andHachataryan,2015).
Intheformer,wherepurchaseditemsaretypicallydistributedviaapostalorparcel
network,e-commercelogisticsmodelshaveledtoawaveofnewdemandforthree
distincttypesoflogisticsfacilities:
• Megae-fulfillmentcenterswherethemerchandiseisstockedandpickedat
itemlevel.Thesefacilities,whichareeitheroperatedbytheretailerora
logisticsserviceprovider.
• Parcelhub/sortationcenterswhichsortorders
• Parceldeliverycenterswhichhandlethe‘lastmile’deliverytothecustomer
(R-kioski,Matkahulto)
Theproductscannolongerbestoredonpallets,butaremostlykeptincratesor
boxes,oronshelves.Theproductsmustbereadilyaccessiblefororderpicking,soa
floorlocationispreferredabovestorageinracks.Theresultisastrongreductionin
thestockdensity,comparedtotraditionalstoragesolutions.
3 LiteratureAnalysis
Theliteraturereviewisanimportantpartofthequalitativeresearch.Intheprevious
chapter,theoreticalbasisprovidedanunderstandingofresearchtopicdevelopment.
Theliteratureanalysisissupportingtheinductionmethodapproach.Ithelpsto
identifypatternsinthedata.Thedatafortheliteraturereviewwascollectedusing
searchenginesforscholars.Forexample,nelliportaali.fiandscholar.google.com.In
addition,articlesfromwell-knownpublishers,suchasForbes,NewYorkTimes,
29
Bloombergetc.werereviewed.SearchedconductedintwolanguagesEnglishand
Russian.
Followingkeywordswereusedtogetfindrelevantliterature:
• E-commerce
• Logistics
• E-commerceinInternationalTrade
• E-commercebarriers
• SupplyChainManagement
• E-business
• Warehouseinnovations
• Etc.
TheanalysiswasperformedaccordingtoJ.L.Galvan`s(2006)guidelinefeaturedinhis
book“Writingliteraturereviews”.Mainpointsoftheguidelinearefollowing:
• Groupthearticlesbycategories.
• Takedetailednotesoneacharticle.Usingthesameformatforallarticles.
o Inthisresearchformatconsistedoffollowingnotes:
§ Articletitle
§ Authors’names
§ Publicationyear
§ Mainpointofarticle
• Lookforexplicitdefinitionsofkeyterms.
• Lookforkeystatistics.
• Lookformethodologicalstrengthsandweaknesses.
• Distinguishbetweenanauthor’sassertionsandevidenceinsupportofthe
assertions.
• Identifyrelationshipsamongstudies.
• Notehowcloselyeacharticlerelatestothetopic.
ThelistofresearchedliteraturewithnotesshowninAppendix1.
30
Theanalysisoftheliteraturesynthesizedthereviewintoseveraltopics.Thesetopics
formtheessenceofthetheorydevelopment.Manyarticlesrelatedtoe-commerce
studymodernbarriers,thatthebusinessesmeet.TheSwedishNationalBoardof
Tradestudiedtheissuesrelatedtoe-commerceactivityofnon-EUcountries.Mainly
theiroutcomeswerefocusedontheGovernmentinfluenceinE-commerceactivities.
Identifiedrisksassociatedwiththelackofinformation,focusesontheauthorities.
…lackoftransparencyintheinformationprovidedbythe
authoritiesineachofthesecountrieswithregardtothelabellingof
productsandtherulesofconsumerinformation…
E-commerceispushingauthoritiestodesignregulationsthatwillhelptodissolve
barriersformaterialandinformationalflows.
ThereisanevidencethatE-commerceisshapingsupplychainoperationsofmany
organizations.IntheB2Csector,deliverycompaniesaredemonstratingnewshipping
options.UPSandRoyalMailintroducedtheSundayDeliveryoptionintheselected
areas,inordertofulfillthedemandononlineshopping.Anothertrendappearing
acrossseveralarticlesemphasizedtheroleofglobalcorporationsinimplementing
newsolutions.OliverWyman,business-consultingfirm,providedstatisticson
internationalorganizationthatlaunchedthe“same-day”deliveryservice.
InB2Bsector,thedeliveryoptionsarerevisedaswell.Rollingwarehouseisasolution
thatisdescribedbyLeeandWhang(2001).Makingchangestoorderwithout
deliverytimerestrains,achievedbyrefrainingfromspecifyingquantitiesinadvance.
Thus,productonthetruckarenotpre-assignedtoadestination.Decisionis
postponedtothetimeofunloading.Sincematerialflowismoreexpensive,
substitutingitwithinformationalflowisgenerallygoodidea.
E-fulfilmentisthenextactivity,thathasitsinfluence.Increasingdemandand
customer’sexpectationsareresultingdevelopmentofmegae-fulfillmentcentersand
sortingcenters.Thesenewcenterswillimplementnewautomationsolutions,which
decreasesthepicktoordertimeandmistakeprobability.
31
4 Interviews
Interviewsaretheprimarydatacollectingtechniqueinqualitativeresearch.Inorder
toprovideanoverviewonthecurrentsituationinresearchedtopic,theresearcher
interviewedseverallogistics,productionandretailcompanies.
FIGURE7.Currentsituationisanalyzed.
Interviewsaresupportingoutcomesoftheliteraturereview,byinvestigatingcurrent
situationinSupplyChainManagementandWarehouseManagement.Inaddition,
interviewshelptoforeseefuturetrends.
Inthefollowingchapterdifferenttypesofinterviewingmodelspresented,
preparationdiscussedandinterviewsanalysisdone.
4.1.1 Qualitativeinterviewtypes
Therearethreemaintypesofinterviews,whichsupportsqualitativeresearch
method:
• Structured
• Semi-structured
• Unstructured
32
Structuredinterviewsconsistofasetofquestionspreparedinadvance.Data
collectedbyconductingthistypeofinterviewisassumedwithhighlevelofvalidity.
Eachintervieweeisaskedthesamesetsofquestions,andtherefore,therearefewer
chancesforfavoritismsorprejudices.(Cohen,2006).
Unstructuredinterviewsdonothaveanypre-determinedspecificdirection.Thistype
ofinterviewusuallyisconductedinaninformalmanner.However,thereisagreat
potentialforbias,andthereforethistypeofinterviewslackreliabilityfromresearch
perspectives.Nevertheless,datacollectedthroughunstructuredinterviewfromthe
respectedsource,mayprovideagreatinsight.(Rubin,2005;Cohen,2006)The
importanceisonobtainingthoroughknowledgeandauthenticityofpersonal
experiences(GubriumandHolstein,2001).
Semi-structuredinterviewscombineboth,structuredandunstructuredinterviews
elements.Interviewerneedstopreparemainquestionsinadvance,tocover
necessarytopicsduringtheinterview.However,follow-upquestionscanbeaskedin
interviewsinordertoclarifysomepointsstatedbyinterviewees,ortoclarifyany
otherrelatedpoints.(Rubin,2005;Cohen,2006)Thistypeofinterviewallowsforthe
explorationofup-and-comingtopicsandideasratherthanrelyingonguidelinesand
questionsdefinedinadvance.
4.1.2 Preparation
Studyrequiredlatestdatatotheresearchedtopicinadditiontotheknowledgeand
experienceofdevelopment.Basedontheseobjectives,semi-structuredand
unstructuredinterviewswereselected.
Certainpatternhasemergedfromliteraturereview.Nevertheless,interviewswere
preparedandconductedinawaytoavoidanybiases.AsMilesandHuberman(1994)
pointout:
Fromthebeginningofdatacollection,thequalitativeanalystis
beginningtodecidewhatthingsmean,notingregularities,
patterns,explanations,possibleconfigurations,causalflowsand
propositions.Thecompetentresearcherholdstheseconclusions
33
lightly,maintainingopennessandskepticism,buttheconclusions
arestillthere,inchoateandvagueatfirstthenincreasinglyexplicit
andgrounded.
AccordingtoBernard(1988),theinterviewershouldhaveapaper-basedinterview
guidethatheorshefollows.Sincesemi-structuredinterviewsoftencontainopen-
endedquestionsanddiscussionsmaydivergefromtheinterviewguide,itisgenerally
besttotape-recordinterviewsandlatertranscriptthesetapesforanalysis.(Bernard
1988)
Basedontheliteraturereviewoutcomestheguidelinewithmainquestionswas
developed(seeAppendix2).Thisguidelinehelpstostayonthemaintopicduringthe
interview.Inaddition,thereisspaceforfollow-upquestionsnotesandpre-
determinedanswersforeasingtheinterviewingprocess.Theguidelinewas
developedaccordingtotheCohen`s(2006)vision:
Theinclusionofopen-endedquestionsandtrainingofinterviewers
tofollowrelevanttopicsthatmaystrayfromtheinterviewguide
does,however,stillprovidetheopportunityforidentifyingnew
waysofseeingandunderstandingthetopicathand.
Inthebeginning,itwasassumedthattheinterviewswouldbeheldinavideoformat
withtherepresentativesofinternationalcompaniessuchasDBSchenker,Maersk.
However,therewereissuescontactingrepresentativesandreceivingfeedback.
Duetotimeandtravellimitations,interviewswereperformedinawaytododge
thoseissues.Inaddition,Beiske(2007)warnsthatsemi-structuredinterviewsare
bestwhenyouhaveonlyoneopportunitytohaveaninterview.Therefore,itwas
decidedthatthebestsolutionistovisitprofessionalexhibitions,wherecompanies
representthemselves.Suchfairsaregreatplaceforgatheringdatabecause
companiescomethereforbenchmarkingandsharingtheirfutureperspectiveswith
thecustomers.Inaddition,duringfairs,representativesaremoreopentothe
interviews.
34
Twovenueswereselected:
• TransportationLogisticsFair“Logistiikka–Kuljetus2015”inHelsinkiheld
between11-13.06.2015
• Production,ImportandExportFair“Международнаяспециализированная
выставка«Импортозамещение»(InternationalSpecializedfair«Import
substitution»)inMoscowheldbetween15-17.09.2015
Beforeeachevent,shortlistofpotentialintervieweecompanieswasprepared.Inthe
nextsectionitisdiscussedhowtheselectionprocesswascompleted.
4.1.3 Intervieweeselection
Toensurethatinterviewssupportedtheliteratureoutcomeswithoutbiases,itwas
importanttodevelopcredibleinterviews.AccordingtoRubin(2005),thekeyfor
conductingcredibleinterviewsistofindexperiencedandknowledgeable
interviewees.First-handexpertiseandthereputationaretheessencefor
experiencedinterviewees.Casesoftheinnovativeoperationsandsuccessful
examplesofimplementingnewsolutionsthataffecttheindustryevidencethelevel
ofknowledgeoftheinterviewee.Mainrequirementofthisresearchwasthat
intervieweesoughttobesupplychainparticipants.Thus,companieswerechosen
accordingtotheirparticipationinsupplychain.
Inordertoexpeditetheselectionprocessofsuitableinterviewees,followingguide
wascreated(seeFigure8).
35
FIGURE8.Intervieweeselectionguide.
Thelistsofexhibitorsfromtheofficialexhibitionwebsitewereanalyzedusingthe
selectionguide.FollowingTable3showstheshortlistofsuitablecompanies.Listwas
compiledbydecreasingtheattractivenessofthecompanies.Informationaboutthe
companieswascollectedthroughopensources.
36
Table3.ShortListofcompaniesfromtwoexhibitions.
No. Company Description
1 3PLogistiikkaGroupOy Logisticsservicesprovider
2 AholaTransportOyAb Transportationlogistics
3 BlueWaterShippingOy Shipping
4 ConstructorFinlandOy(Kasten) Warehousingsolutions
5 DimexOy Professionalclothingretail
6 eSendFinlandOy LogisticsProvider
7 ExclusiveLogisticsFinlandOy CityDeliverySolutions
8 GEFCOBaltic SupplyChainSolutions
9 NFleetOy ITSolutions
10 TrimicoOy ITsolutions
11 UnitedParcelServiceFinlandOy SupplyChainSolutions
12 VantaanRahtikeskusOy SupplyChainSolutions
13 АВТОГАЗТРАНС,ООО(Avtogaztrans) Liquidgasproductionandtransportation
14 МЕТМАШ,ООО(Metmash) Production
15МТГ.БИЗНЕС-РЕШЕНИЯ,ООО(MTG.
BusinessSolutions)
Consultingcompany,SupplyChain
management
16 НАНОСОФТ(NanoSoft) ITsolutions
17 РИВ-ПАК(Riv-Pack) PackagingSolutions
18 САНДВИК(Sandvick) Serviceprovider
19 ТЕПЛОСТАР,ООО(Teplostar) Production
20 X5RetailGroup Retail
37
Numberofinterviewseffectsreliabilityaswell.AccordingtoBeizke(2007),10to15
semi-structuredinterviewsareenoughforaphenomenalityresearch.
4.1.4 Conductinginterviews
Cohen(2006)agreesthatsemi-structureinterviewscanprovidereliable,comparable
qualitativedata.Besides,aimofthesemi-structuredistoletinformantsexpresstheir
viewsintheirownterms.
Thefollowingthreeconditionsofvalidresearchinterviewsasspecifiedby
Hutchinson(2007)weremetduringsemi-structuredinterviews:
• Interviewershouldhaveanopenmind.Eveniftheinterviewerdoesnot
agreewithintervieweehe/sheshouldstayobjectiveandshouldnot
displaydisagreementwiththepersonalopinionsofinterviewees
regardingtheresearchquestions.
• Interviewersshouldaskquestionseffectively.Anyquestionsshouldbe
avoidedthatcouldleadintervieweestospecificanswers
• Thetimingandenvironmentfortheinterviewshouldbeeffective.
Interviewsshouldbeconductedinrelaxedenvironment,andinterviewees
shouldbefreeofanykindofpressurewhatsoever.
Beforeeachinterview,theresearcherintroducedhimselftotheintervieweeandtold
abouthisresearch.Thepermissiontorecordtheinterviewwasaskedeach
intervieweeduetoethicreasons.However,notallcompanyrepresentativesagreed
toberecorded.Inaddition,theguidelineoftheinterviewwaspresentedinorderto
easetheinterviewprocess.Somerepresentativesevenfilledtheguideline
themselves.Overall,theinterviewingprocesswentwellduringbothexhibitions.
Interviewswereconductedinaninformalmanner,sothattherepresentativesand
theresearcherfeltcomfortable.
DuringthefirstexhibitioninHelsinki,ninecompaniesfromtheshortlistwere
interviewed.Fromthesecondexhibition,fivecompanieswereinterviewed.Seethe
Table4forthefulllist.Mostoftherepresentativeswereopentotheinterview.
38
Nevertheless,someinterviewswerequickandcapaciousandsomewerealittle
lasting.
Table4.Listofinterviewedcompanies.
No. Company Description
1 3PLogistiikkaGroupOy Logisticsservicesprovider
2 BlueWaterShippingOy Shipping
3 ConstructorFinlandOy(Kasten) Warehousingsolutions
4 eSendFinlandOy LogisticsProvider
5 GEFCOBaltic Shipping/SupplyChainSolutions
6 NFleetOy ITSolutions
7 TrimicoOy ITsolutions
8 UnitedParcelServiceFinlandOy SupplyChainSolutions
9 VantaanRahtikeskusOy SupplyChainSolutions
10 АВТОГАЗТРАНС,ООО(Avtogaztrans) Liquidgasproductionandtransportation
11 МЕТМАШ,ООО(Metmash) Production
12МТГ.БИЗНЕС-РЕШЕНИЯ,ООО(MTG.
BusinessSolutions)
Consultingcompany,SupplyChain
management
13 РИВ-ПАК(Riv-Pack) PackagingSolutions
14 САНДВИК(Sandvick) Serviceprovider
15 RostekNorthEast Warehousing
16 VetnaLtd Wholesaler/Retail
Bothexhibitionswereattendedontheseconddayofopening.Unfortunately,some
ofthecompaniesdidnotexhibitonthesecondday.Somecompanieswerehardto
39
findduetothesizeofbothevents.However,inadditiontothesemi-structured
interviews,twounstructuredinterviewswereconducted.Bothofthecompaniesare
previouspracticaltrainingplacementsfortheresearcher.Nevertheless,both
companiesfulfilltheselectioncriteria.RostekNorth-Eastisacustomsservice
providerforimportersandexporters.Thecompanyhasrichexperiencein
warehousingandsupplychainmanagement.Secondcompany,VetnaLtdisthe
biggestpetretaierintheUralareainRussia.Companyhasmorethan20yearsof
experienceinretail.Todaycompanyisheavilyinvestingintowarehouseautomation
technologiesande-commerce.
Overallinterviewinggoalswereachieved.Appendix3displaysthelistofinterviewed
representatives.Appendix4showsthetranscriptsomeoftheinterviews.
4.1.5 Analysisofinterviews
Qualitativecomparativeanalysisalongwithconstantcomparisonanalysiswereused
toexaminetheinterviewdata.
Table5.Descriptionofimplementedanalysisoftheinterviews(LeechandOnwuegbuzie,2008)
No. TypeofAnalysis ShortDescription
1 Constantcomparisonanalysis
Systematicallyreducingsourcestocodesinductively,andthendevelopingthemesfromthecodes.Thesethemesmaybecomeheadingsandsubheadingsintheliteraturereviewsection.
2 Qualitativecomparativeanalysis
Systematicallyanalyzingsimilaritiesanddifferencesacrosssources,typicallybeingusedasatheory-buildingapproach,allowingthereviewertomakeconnectionsamongpreviouslybuiltcategories,aswellastotestandtodevelopthecategoriesfurther.
Interviewinganalysisprocessbasedontheframework,describedbyDr.JohnSchulzfromtheUniversityofSouthampton.Frameworkincludesfive
stages.Figure9describestheadaptedprocessofinterviewanalysis.
FIGURE9.Interviewdataanalysisprocessmap
Productofinterviewanalysisistheclassificationtree,shownonFigure10.
FIGURE10.AnalysisClassificationTree
Interviewdataanalysiswasperformedusingthequalitativeanalysistechniques.
Resultofdataanalysisistheclassificationtree.Classificationtreewasorganizedina
waythatthelowercategoriessupporttheupperones.Dataanalysisrepresentedin
threemainthemes:
• Materialflow
• Innovations
• Informationalflow
Materialflow.OutsourcingandSCMsolutionsaresubcategoriesofthematerial
flow.Manycompaniesstatedthatinordertooptimizetheiroperations,they
outsourcedsomeofthem.Forexample,BlueWaterShippingOyhassubcontracted
warehouseoperationstoapartnerwithbiggerfacilities.Itallowedthemtoincrease
theamountshipmentsthattheycouldnothandlebefore.However,thismeasureis
increasingthestressonexistingSCM.Duetonewparticipantsinsupplychain,
managementrequiressolutionstocontrolmaterialflow.Greatsolutionis
automation.Mostoftheintervieweesnoticedthattheyarelookingforwardtosee
cheaperwarehouseautomationsolutionsinthenearfuture.
GovernmentimportanceandinternationalstandardizationaresupportingRegulation
category.Companiesdonothavebigconcernsregardinggovernmentregulation.
Sinceallregulationsarethesameforcompetitors.However,companiesareeagerto
takepartinrefiningstandardsintheindustry.Forexample,Riv-Pack,thepackaging
producer,wasinterestedintheimprovementofRussianpackagesstandards.The
intervieweesaidthattheirproductiontechnologiesareontheEuropeanlevel,thus
theyhaveanexperiencetoshare.
Innovations.Thisthemeincludestheelementsofmaterialflowandinformational
flow.CompaniesseeITsolutionasnecessitytorunoperationssmoothly.Itis
recognizedthathardwareisincreasingthespeedandtherangeofdata.TrimicoOy
representativeclaimedthatsmartphonesaretheeasiestwaytobringinnovationto
thesmallcompanies.However,costsofimplementationisstillastumblingstone.An
43
unexpectedthemewas3Dprinting.Ironically,fewintervieweespredictedthat3D
printingtechnologycoulddamagelogisticsindustry.
Informationalflow.MainpartsofthistopicareAccessandCommunication.Under
theAccesssubtheme,theproblemoftheinformationavailabilityisreviewed.
RepresentativesfromVantaanRahtikeskusOyclaimedthatitwascommonthat
informationisnotattherighttimeattherightplace.Inaddition,somemighthave
accesstounnecessaryinformationthatfloodstheworkingprocess.Forinstance,
currente-mailsystemprovideshugeamountofmessagesdaily.Thereisabigchance
thattheimportantinformationwillbemissed.
Communicationsubthemediscussessimilartopic.However,theaccentisonthedata
itself.Newtechnologiesareprovidingnewsolutionsfordatainterchange.Computers
areinteractingbetweeneachotherwithouthumaninvolvement.Thedirectorof
VetnaLtd,noticedthattheirpartnersdonotsharemuchinformationwith
transportationcompanies,whichleadstomisunderstandinganddelays.Information
flowtransparencymaysolvethisissue.Becauseitwillleadtothetransparencyofthe
systems.Whichleadstogreaterinformationinterchangeandoptimizationof
operations.
Theresearchertriedtostayunbiasedduringtheinterviewing.However,aftereach
interviewthereweredifferentimpressions.Thus,whenanalyzingtheinterviewdata
usingconstantcomparativeanalysisresearcherwasundertheinfluenceofthose
impressions.Therefore,intheanalysisprocesssomeinterviewsunwillinglybeen
betterhandled.
5 ResultsMaingoalforbusinessesstaysthesame:generateprofit.Manycompaniesstillthink
thatITsolutionissomethingexpensiveandnotmuchuseful.However,costsof
technologiesaredroppingrapidly.Thus,thereisapositiveshiftrelatedtoIT
solutionsimplementation.Fortunately,therearepioneersthattakerisksandbring
innovationtothemarket.Industryleadingcompanieshavehugeresourcesto
experimentondifferentconcepts.Forinstance,Amazonhavepresentedtheiridea
44
ondeliveringparcelsusingdrones.However,innovativecompaniesarenot
necessarilyindustryleaders.Kivasystems,recentlyacquiredbyAmazon,introduced
theroboticsolutionfororderpickingoperations.
Anothertrendintheindustryistosticktothecompany`scorebusinessand
outsourceotheroperations.Companiescanfocusonbringinginnovationstotheir
partofthesupplychain.However,theissueofcommunicationsrises.Many
representativesarecomplainingthatcustomersorsuppliersareintentionallyhiding
non-preciousinformation.RepresentativeofTrimicoOy,theITsolutionsproviderfor
transportationlogisticssays:
…Subcontractorsdon’tgetthefullinformation.Iftheywouldget
moreinformation,subcontractorscouldoptimizetheiroperations…
Todaycompaniesaregeneratinglotofdata,howeveronlyfewknowhowtohandle
it.Thisabilitybringsthemthecompetitiveedge.TheUPSrepresentativedescribed
theirSupplierManagementSystemincreasestheircompetitiveness:
…Itiscalledsuppliersmanagementandthatincludessoftwareon
differentlevels,whereyoucanintegratecustomersonhowthey
wanttoreactwithsuppliersthroughus…
Stillmanybarriersneedtobeovercome,inordertobringinnovationstothemass.
However,thebiggestproblemisseemingtobeinpeoplethemselves.Employeeare
gettingusedtohandleoperationsincertainmanner.Whichmakesthemincapableto
comprehendnewideas.Forexample,intervieweefromMTGBusinessSolutions
confessed,mostoftheirclientlookingforsolutionsbasedontheexistingoperations.
Motivatingit,thatitisexpensivetoteachemployees.Itmakescompaniesvery
careful,whendecideonfulfillingnewsolutionstothebusinesses.Technologiesmay
havedroppedtheprice;however,implementationisstillcostly.
45
6 DiscussionTherearethreemajoroutcomesfromtheliteraturereview.
• E-commercehasincreasedthematerialflowininternationaltrade
• SCMhastoconsidere-commerce,byimplementingITsolutionsforeachlevel
ofactivity(strategic,operational,andtactical)
• E-commercehasatangibleinfluenceonwarehouseoperations
E-commerceisaproductofInternetrevolution.E-commerceisaninevitable
modernizationofcurrentbusinessmodels.Itischangingtraditionalsupplychainand
bringingomni-channelapproachforcustomers.
In2014AmazonandAlibabahavegenerated88.99billionU.S.dollarsand12.29
billionU.S.dollarsnetrevenuerespectively.FinlandhasGDPof267.3billionUS
dollarsin2013accordingtoWorldBank.Whichmeansthattwomajore-commerce
corporationsearned4,5%ofFinnishGDP.
Thatmeansthatthee-commerceisincreasingthepressureonlogisticsoperations.
Especiallyonwarehousing.
AccordingtoAnnunziata(2013)thereweretwomajorwavesofinnovation:Industrial
Revolutionabout1760-1903andInternetRevolutionbetween1980and2000.
Meansofdeliveringinformationhaschangedandarechangingrapidly.Today
customerswanttocontroltheprocessofdeliveryandmanufacturing.However,
currentsystemsallowdoingso.DuringtheIndustrialRevolution,theconceptsof
manufacturingwereintroduced.Obviously,IndustrialRevolutionhadamajoreffect
onthematerialflowofthattime.However,weshouldnotforgetthatbeforethat
therewasrevolutionininformationalflow,whenJohannesGutenbergfirst
introducedpaperpressintheWest.Thepressallowedprinting3600pagesperday
(Wolf,1974).Thisinnovationisratedasthemostinfluentialinsecondmillennium
(A&E,1999).
46
AccordingtoMoore`sLaw(1965)eachtwoyearsthecapacityandtheperformance
ofelectroniccomputingmachinewillincreasetwice.Indeed,from1975to2012the
lawdidwork.However,since2010thepacestartedtodecline.Andin2015Gordon
MoorepredictedthethatinthenextdecadetheMoore`slawwillslowlydecease.
GordonMooredescribedthetrendofhistimebackin1965.Todaytrendisdifferent;
however,patternstaysthesame.Judgingtheoutcomesoftheresearch,thereisa
certainpatternthatisemerging.Informationalandmaterialflowsarebindtogether.
However,theyaredevelopingaccordingtocertainformeventhoughtheircatalyst
factorsmightbedifferentorsame.
Resultoftheresearchisatheory,whichexplainsthelinksofthepast,presentand
thefuturedevelopmentofresearchedtopic.
Withintroductionofinnovativetechnology,thefirsttochangeisinformational
flow,materialflowchangeslater.Alternatively,thereisarotationoftheeffectfrom
innovations.
Todayweareprobablylivingintheeraofanothermostinfluentialinnovationofour
millennium.TheInternetRevolutionhadamajorimpactoninformationalflowinthe
world.
47
FIGURE11.Trendsarepredicted.
E-commercedependsontheInternet.Thus,thefuturegrowthofe-commerceis
basedonthedevelopmentoftheinternet.Nextmilestoneininternetprogressisits
worldwideexpansion.LeadersoftheindustrysuchasGoogleandAmazonhas
introducedtheirprojectsforinternetspreadingout.E-commercewillimplementthe
hardwaresolutionsaswell.Themostpromisingis3Dprinting.Oncecustomerhas3D
printerinitsfacilities,thematerialflowwillnarrowdowntosupplyingrawmaterial.
SupplyChainManagementhoweverhasmanyoptionstochangeaswellasobstacles
toface.Interviewsshowedthatpeopleareusedtoperformedoperationstheway
theydidallthetime.However,implementingITsolutionsonthedeeplevelcan
provideproactiveandpreventiveapproach.Systemshavecapacitiestoperformbig
calculationsinminutes.Basedontheresultspeoplecanmakedecisions.However,in
thefuturesystemswillbeabletocommunicate,discussandmakedecisionsbetween
eachother.Nevertheless,peoplestillhavetoperformascreatorstoteachthose
systems.
Warehousinghowever,mostprobablywillnotneedanyhumanassistant.Today
therearealreadyautomationprocessespresentinthewarehouse.Nonetheless,the
trendwillcontinuetogrowinthisdirection.Todayitiscommontostoregoodsin
automatedstorages.Technologiesarehelpingtosavethespace.Inthefuture,
48
roboticsolutionswillbeimplemented.Therearemanysetsofdifferentsensorsthat
alreadyinuseforautomations.Thenextmilestoneforwarehousingistoimplement
theidentificationsystem,whichcanworkautonomously,withouthuman’s
interference.
TheresearchforecaststhatnextRevolutionwillinfluencethematerialflow.Most
promisingexampleis3Dprinting.
7 ConclusionThestudyresearchedtheinfluenceofe-commerceininternationaltradeonsupply
chainandwarehousemanagement.Inordertostudythisphenomenon,inductive
approachandqualitativemethodwereimplemented.However,accordingto
inductiveapproach,thestudywasperformedonspecificphenomenon.Theoutcome
isgeneralconcept,pattern.Throughthispattern,itispossibletoanswerthe
researchquestions.
I. Whatistheinfluenceofe-commerceoninternationaltrade?
• E-commerceprovidedanopportunitytoexpandthemarketsforSMEatalow
cost.
• Howevernewbarriersareemerging.Mainissuesarerelatedtothe
interactionwithauthorities.
• Deliveringandsharinginformationwithaclickofamouseisputtingpressure
tothelogisticsactivities.Inturn,itaffectstheinternationaltraderegulations.
Forexample,newsolutionsforcustomsclearance.
II. CanE-commercemanagerialskillsbringcompetitiveadvantage?
• Definiteanswerisyes.Supplychainmanagersshouldunderstandthenew
principalsthatareemerging.Forexample,customersarebecomingmore
fastidious.Thus,thosecompanies,whocanmanagebothmaterialand
informationalflowtosatisfytheircustomers,arebetteroff.
III. WhatistheeffectofE-commerceonglobalsupplychain?
• Eachcompanyhasitsownsupplychain.However,e-commercesetatrendfor
outsourcingactivitiesfor3PL.Themainreasonsofthatisthedevelopmentof
materialflow.Increasingdemandanddecreasinglead-timeleadfortheneed
49
ofnewsolutionsinsupplychain.New,biggerfacilities,automatedprocessed
arethesolutions,whichrequireinvestments.Consequently,onlybig
companies,whosecoreactivityislogistics,supplychain,canimplement
whosesolution.
IV. WhatistheeffectofE-commerceonsupplychainmanagementand
warehouseoperations?
• Warehouseoperationsareonthevergeofhugedevelopment.As
warehousingrepresentsthematerialflow,it`schangesareinevitable.New
megae-fulfillmentcenter,e-commercehubsarethefutureofwarehousing.
Nowadays,wearewitnessingtheeffectofInternetrevolutioninmanybusinesses.
Accessandabilitytoshareinformationinstantlyaregamechangingparametersthat
burdenexistingsupplychainoperations.Inturn,itstimulatesinnovationsand
optimizationofexistingsolutionsinmaterialflow.Manyinnovationsarealready
existingandnowbeenimplementedasprototypes.However,itwilltaketimeto
makeasignificantleapforwardandexpandinnovationtotheindustries.
Globalizationismakingindustriesinterconnected.Thus,basingonthetheory,one
canpredictwhatinnovationalimpactnewtechnologieswillhaveondifferent
industries.
Eventhough,researchhasabigscopeontheissue,theeconomic,monetaryand
politicalperspectivesarenotanalyzed.Thus,theoutcomesmightprovideinaccurate
realapplication.Studywasconductedusingqualitativeresearchmethods.It
assumedtostudypeoplesexperienceandpractices.Eventhoughtheauthortriedto
beunbiased,theanalysisresultshavemoresubjectiveattitudethanobjective.
50
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53
9 Appendices
9.1 Appendix1
Appendix1.Listofanalyzedliterature.
No. ArticleTitle
Author/
Year MainpointofarticleSource
1Purchasingmustbecomesupplychainmanagement
PeterKraljic,1983
Purchasingoperationstakeimportantpartincompanies’coreactivities.Managerialskillsarethekeytosuccess.Guidetomanagingsupplychainweaknesses
https://hbr.org/1983/09/purchasing-must-become-supply-management
2
InsidetheGlobalSupplyChain:e-Commerceandanewdemandmodelforlogisticsrealestate
Prologis,2014
Omnichannelingconcepteffectingfulfilmentoperations.Newtypesoffacilitiesarerequiredfore-fulfillment
http://www.prologis.com/docs/research/supply_chain/E-Commerce_Logistics_Real_Estate_Final_July2014.pdf
3WinningtheLastMileofE-commerce
Lee,Whang,2001
Logisticsconceptsandstrategiesforoptimizingmaterialaninformationalflow.
http://www.feg.porto.ucp.pt/docentes/rsousa/Files/Le%20Havre%20Files/S4_1.pdf
4LogisticsandE-
commerceCBRE,2013
Warehouseoperationsadoptingto
afastpaceofe-commerce.E-
fulfillmentdevelopmentcreates
challengesforfacilitymanagement.
Newtypesofwarehouseare
required
http://www.cbre.nl/portal/page/
portal/nl_en?_piref1143_518362
51_1143_1_1.tabstring=Tab2
5
E-CommerceLogistics:
TheEvolutionof
LogisticsandSupply
ChainsfromDirectto
StoreModelstoE-
Commerce
Robinson,2014
E-commerceraisedthedemandfor
smallerorder.ITsolutionfor
warehousinghelpedtoadaptto
thosechanges.ForSMEitishardto
competeagainstgiantslike
Amazon
http://cerasis.com/2014/04/30/e
-commerce-logistics/
6
Maximizing
ProductivityinE-
commerce
Warehousingand
Graves,2012
Currentdistributionoperationsare
thekeyforsuccessfulcustomer
experience.Retailsturnedfor3PL
solutions.Theyprovidebetter
experienceforcustomersthanin-
http://www.inboundlogistics.com
/cms/article/maximizing-
productivity-in-e-commerce-
54
Distribution
Operations
housefulfillment.However,in
ordertostaycompetitive,3PL
shouldinvestintoautomation.
warehousing-and-distribution-
operations/
7
E-commerce-New
opportunities,new
barriers
TheNational
BoardofTrade,
2012
SurveyofSwedishcompanies,
regardinge-commerce.Analyzed
indirectbarriersthateffect
operationsofSwedishcompanies
abroad.
https://www.wto.org/english/tra
top_e/serv_e/wkshop_june13_e/
ecom_national_board_e.pdf
8
DisruptiveLogisticsThe
NewFrontierforE-
commerce
OliverWyman
(Lierow,Janssen,
D`Inca)
Futuretrendsoflogistics.3PL
innovationsbroughtby
internationalplayerssuchas
Amazon,Alibaba,DHL.Fastmoving
goodsoperationsanalyzed.
http://www.oliverwyman.com/co
ntent/dam/oliver-
wyman/global/en/2014/sep/MU
N-MKT20101-011_screen12.pdf
9
E-commerceboom
triggerstransformation
inretaillogistics
JonesLang
LaSalle,2013
Ase-commercelogisticsmodels
develop,theywilldrivehuge
changesinphysicaldistribution
networks.Thiswillgiverisetoa
newclassoflogisticsand
distributionpropertiessuchas
megae-fulfillmentcenters.
https://www.jll.com/Research/eC
ommerce_boom_triggers_transfo
rmation_in_retail_logistics_white
paper_Nov2013.pdf
10
Chinaproposesto
createinthefreeport
ofVladivostokhubof
e-commerce
TASS,2015
ChinaandRussiaareinvestinginto
hugee-commercehubintheport
ofVladivostok.
http://www.newsvl.ru/far_east/2
015/08/25/138360/
12Alibabaopensofficein
Russia
Korotkinand
Hachataryan,
2015
Alibaba,thegiantofe-commerce,
seesRussiaasahugemarket.It
opensitsofficetocoordinate
operationsclosely.Asanexample,
popularproductswillbestoredin
Russianfacilities.
http://www.gazeta.ru/tech/2015
/06/02/6743269/alibaba-opens-
russian-office.shtml
55
9.2 Appendix2
Appendix2.Semi-structuredinterviewguideline.
56
9.3 Appendix3
Appendix3.Listofrepresentativeswhowereinterviewed.
No. Company
Place,Dateand
Timeofthe
interview
Company
representative
1 3PLogistiikkaGroupOy Helsinki,12.06.15,1pm JussiKammonen
2 BlueWaterShippingOy Helsinki,12.06.15,2pm SeppoRautanen
3ConstructorFinlandOy(Kasten)
Helsinki,12.06.15,4pmJarkkoSuomalainen
4 eSendFinlandOy Helsinki,12.06.15,4pm HannuPeltomäki
5 GEFCOBaltic Helsinki,12.06.15,5pm RichardKeirans
6 NFleetOy Helsinki,12.06.15,12pm TuukkaPuranen
7 TrimicoOy Helsinki,12.06.15,11am JanneLausvaara
8 UPSFinlandOy Helsinki,12.06.15,6pm AnttiLahtinen
9 VantaanRahtikeskusOy Helsinki,12.06.15,3pm MarcoPohjalainen
10АВТОГАЗТРАНС,ООО
(Avtogaztrans)Moscow,16.09.15,1pm
EkaterinaMaryana
11МЕТМАШ,ООО
(Metmash)Moscow,16.09.15,12pm
DmitryKopeykin
12
МТГ.БИЗНЕС-
РЕШЕНИЯ,ООО(MTG.
BusinessSolutions)
Moscow,16.09.15,11am
VladislavBortsov
13 РИВ-ПАК(Riv-Pack) Moscow,16.09.15,12pm IgorLebedinski
14 САНДВИК(Sandvick) Moscow,16.09.15,2pm YuliaKandratieva
15 RostekNorthEast St.Petersburg,25.06.15,1pm PavelPolyakov
16 VetnaLtd Ufa,28.08.15,2pm JamilValishin
57
9.4 Appendix4
TrimicoOy
Whatisyourcompany`scorebusiness?
Weprovidesoftwaresolutionsforlogisticscompanies,especiallyfortransportationcompanies.
Whatkindofsolutionsyouareproviding?
Wholepackagefortransportationcompanies.Usuallysolutionsfordrivers,liketherouteplanningandthemobileintegratedsolutions.
Whereareyourcustomersfrom?Doyouhaveanyinternationalcustomers?
No,onlyinFinnishcompanies.Inaddition,ourcustomersaresmalltransportationcompaniesthatworkassubcontractors.
Howdoyouhandleordersfromyourcustomers?
Basicallyweareusinge-mails.Sinceourcustomersaresmallcompanies,theycannotaffordfullERPsolutions.Soweoperateinlittlesectorofthemarket.Sowedon’thaveanyCRMsystemneither.However,oursolutionsdoesnotrequirecomplexERPsystems,itcanbebasedonmobileapplication.
AreyoufamiliarwithInformationalandmaterialflow?Howyoursoftwaresolutionscomplywiththeseissues?
Itfastenspayment.Whendeliveryisdone,informationgoestotheofficedirectly,thusfasteningtheoperations.Routeplanningisincreasingtheefficiencyoftransportation.
Youmentionmobileapplication.Whatfeaturesithas?
Well,forexample,ifthereisadifferenceinactualdelivery,iteasilycanbechangedthroughthemobileapplications.Inthiscasethedeliverywillbeperformedandtheinformationwillbesenttotheoffice,wherepeoplecansolvethemistake.
Inyourexperience,wasthereanyinnovationintheindustry?
Yes,Ithinkthatmobiletechistheone.Because,itisalwaysincreasing,whenthetechnologyisgettingmoreaffordable.Before,onlybigcompaniescouldaffordexpensiveequipmentsuchasbarcodescannersandsoon…nowmobilesaretakingthelead.
WhatdoyouthinkaboutRFIDsystems?
Ithinkthattherearestillcertainlimitations,howeversoonwemightseeitshype.I’vebeenreadingaboutit.Nowitiscostly,in5years,whenthecostdrops,theywillbecomepopular.
58
Whataretheproblemsoftheindustrytodayandwhatisdirectionofthefuturedevelopment?
Nowyoucangetlotsofdata,butmostofthemisnotprocessed.SoIguessinthefuture,companieswillmakesoftwarethatwillanalyzemoredata.SocalledBigData.However,theproblemistounderstandthisdataandhowtouseit.Andinmyopinionthatitpeopleswork.
Whatproblemsdoyoupersonallyface?
Companiesdon`ttrusteachother,andtheydon’tshareinformationmuch.
Howwillitchangeinthefuture?
Forexample,nowthereisaproblemoftransparency.Transportationscompaniescannotknowwhattheyaretransporting.Whenthetransparencycomes,youcouldplanahead.Subcontractorsdon’tgetthefullinformation.Iftheywouldgetmoreinformation,subcontractorscouldoptimizetheiroperations.Sothetransparencyshouldincreasetheefficiency.
Whatdoyouthinkaboutwarehouseoperations?
Ihavebeenreadingabout3Dprinting,andIthinkitwillmakeahugedifferencesoon.Therewillbestilllogisticsoperations,sincetherawmaterialneedtobetransportedandstored.AndIthinkitwilleffectwarehouseoperations.
Whatcompaniescoulddotosatisfytheircustomers?
Informationflowisakeypartofthat.Sendinginformationofthedeliveryprogresstothecustomermakesdifferenceonsatisfaction
Whatwillchangeinlogisticsinnext10years?
Theinformationwillbesharedmoreopen.Andlesssmallcompanieswillbethere.Big3PLcontractorssuchasDHLandUPScananalysebigdata,thustheywillsharethemarket.
eSendFinlandOy
Howwouldyoudescribetheinnovationsinmaterialflow?
Well,materialflowisquitefastcurrently.Theyhaveveryfastdeliverysystemsnowadays.ItwillonlytakeonedayfromwhateverpartofEurope.However,thefacilitieshavetobeclosetothefinaldestinations.
Whatareproblemsofinformationflow?
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Youhavetopriortheinformationyougettoyouremail.Youreceivehundredsofnewmessagesdaily.Youhavetotakeonlythatisimportantforyourbusiness.Becausetimeisthemostimportantresource,youhave.
Whichdirectionmaterialandinformationalflowwilldevelop?
Ithinkitwillbeequalinthefuture.Becauseyouhavethose3Dscanners,soyouwillhavethematerialimmediately.Therefore,itiswillbemaderightaway.
ConstructorFinlandOy(Kasten)Whatchallengesyourcompanyisfacingwhendealinginsupplychain?
Ourproblemisthatweshouldgetbetterinformationdeliveredtoourcustomersaboutourproducts,aboutavailability,capacity.
Howyourwarehouseoperationlimitationsaffectyoursupplychain?
Thereisapossibilityoferrors,sincemostofthewarehousesarenotautomated.Someproductsneedtobeunpackedbeforecollectingtheorder,whichdecreasetheorderpickingtime,asaresultthewholeleadtime.
WhatthreatsyouseefromtheglobalcorporationssuchasAmazon?
Ithinkthesebigcompanieswilltaketheshareofthemarket.However,inourcase,situationisalittledifferent.However,weonlypackandstore.
VantaanRahtikeskusOyWhatdifferencesbetweenmaterialandinformationalflowyouseeindailyoperations?
Thedeliveryspeedisnotthatimportant.Itisimportanttoshareinformationregardingthestatusofthedelivery.
Ise-commerceaffectsthematerialorinformationalflows?
Themostimportantincentiveisthatourcustomerswantproductsandservicescheaperandcheaper.Therefore,theyforceustodevelopthesethings:informationaltechnologiesandmaterialflowsolutions.Becauseourcompetitorsarealsoinneedfordevelopment,soifwestop,theywillnot.SometimesIhaveheardthatlogisticsbusinessisslowmoving,butitisnottrue.Becauseweconstantlydevelopdifferentsolutions.
Whatdoyouthinkisthefuturedevelopmentoflogistics?
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Idon`tknowhowmuchlogisticscompanieswilldevelopinformationservicesbythemselvesortheywouldbuyit.
Howdoyouhandlelackofinformationinsupplychain?
Theproblemisthatrequiredinformationisnotattherightplaceattherighttime.IfIknowsomething,itisnotenough,becauseotherpeopleshouldknowthesameinformationthatIhave.Westillhavetheemailandphonesbutstillpeoplethatneedinformationdonothaveit,whereaspeoplewhodonothaveit.Thisthinghappensallthetimeinreallife.
Howtomakekeypeopletogetrightinformationatrightplaceandrighttime?
Ifkeypeopleinthecompanyreceiveinformationatrightplaceandrighttime,theycouldmakequickandoftenrightdecisionregardingmaterialflow.IfyoutakeanexampleofglobalcompaniessuchasDHL,DSE(whichisourcustomer),andwheyhavethousandsofpeopleemployed.Iftheyhavebigproject,peoplecanbefromdifferentcountrieswithdifferenttimezones.Inthiscase,flawlesscommunicationmightbecomeaproblem.
Howwouldyoufeeliftheinformationwasprocessbycomputers?
Ithinkthatcomputersandsystemsshouldsupportthedecision-making.However,sometimescomputersystemscan`tanalyse.Therearecertainlimitationstothesystemanyway.Sowecandependonthemcompletely.
UnitedParcelServiceFinlandOyHowdoyouhandlecustomerandsupplierorders?
Wemainlyusinge-mails,wereceivingordersfromcustomers.Thenalsowecanuseinternetplatforms,totakecareofoursuppliersorcustomerssincewehaveordermanagementsystems.Itiscalledsuppliersmanagementandthatincludessoftwareondifferentlevels,whereyoucanintegratecustomersonhowtheywanttoreactwithsuppliersthroughus.Sotheycanuseconsiderationservices,bettertrackingservices,orthingslikethat.
Howdoyouhandlematerialandinformationflows?
Manytimesinformationfollowsmaterial.Sometimesinformationgetsdelayed.Onlyforwarehouseoperations.Warehouseislikeasmallpiecefromthewholebasket.Imeanwhenthecargocomes,materialcomesfromsomewhere,usuallyitcomesfromthewarehouse,someplatformsandthingslikethat.Andonthewaytherearemanycheckpoints:ports,airports,drivers.Ateachcheckpoint,thecargoisscannedandthatinformationgoesthroughinternalsystem,whichgoestothecustomer.
Howdoyoumanageinformationalandmaterialflowsinyourcompany?
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Forthisquestion.Recently,webasicallymadeanewsupplychainforoneofourcustomerstoAustraliafromFinland.Weknew,wherewearegoingtoaim.Allwehadtodoistoputalloursubcontractorstogether.Andwehadtheinformationflowwiththemtothecustomer,tous.Thenweshowedthesolutiontothecustomer,theyaccepteditandtheyitstartedtowork.
Whatinternationalpartnersdoyouhave?
Weusemanydifferentairfreightcompanies,likeKLM,SingaporeAirlines,andFinnair.Icancountthatourinternationalsubcontractorsareourinternationalpartners.Wehaveoutsourcedourwarehouses.InFinland,weareusingspecialparceldistributionvehicles.
Whatchallengesyourcompanyisfacingwhendealinginsupplychain?
Companieswanttoprotecttheirbusiness,thussharinginformationisstillquitereluctantly.Whenwestarmeetingswiththebuyersofourservices,wegotusedtotheroleofannoyingpartythatwantstofindoutanykindofinformation.Evenifthereisnothingvaluable,somecompaniesbehaveirrationally,bynotlettingususethatinformation.Therefore,wetreatitlikenormalsalesnegotiationprocess.Howeversometimesthisprocesscantakealongperiod.
Howdoyouimproveinformationalandmaterialflowsinyourcompany?
Wearealwaystryingtoimproveexistingsolutionsforourcustomers.Welookingfornewsolutions,butalsocheckthecostfactor.Ifwecanseethatinourpipelinethecostmightbelesswithcertainsolution,thenwesendthesolutionforthecustomer.
Doyouhaveanyparticularexamples?
Well,almostallinformationisclassified.However,Icangiveanexampleofsimplesolution.WhenthecustomerhasLCLcargocominginfromsomewhereFarEast.Andtheyhavevolumethereintheport.Sowesee,thatthevolumegoeswiththeLCLandtheLCLismoreexpensivethenweshouldputthiscargotoFullcontainer,soweconsolidatethiswholeshipmenttoonecontainerandshipit.Thenwesendtheinformationtothecustomerthatwesavedroughly1000eurosonthedelivery.
Whatinnovationsyourcompanyisbringingtotheindustry?
Yeahofcourse,bigcompaniesaresettingnewfrontierinthedevelopmentdirection.Theyhavetheresourcestoinvestigatedifferentinnovationandifsomeofthemwillshowperspective,otherwillcatchup.Whatwearetryingtodoistogetinvolvementwithourcustomers,suppliers.Whencustomerhave30-40differentsuppliersinonecountry,wetrytogetthemallandthecustomer.Thenwenegotiatewiththecustomer;ifyouletusintoyourbusiness,wewillhelpyoutodiscoverthepainpointsofthelogisticssupplychain.Thenwetrytoconsolidatematerialflow,orintegrateourownsystemswiththesupplier`s.Itgoestothroughourownsystemsbacktotheactualconsignee.Becauseinmanycaseswhenconsigneeshavediscussionswithsuppliers,theactualinformationflowisusuallydonebyemails.
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Becausemanysuppliersdon’thavenecessarysystems.Whereoursystemscanintegratethisflowintotheorganization.Andourservicecanmakereal-timefollowing.
BlueWaterShippingOy
Me:Howdoyouhandleordersfromyourcustomersandsuppliers?
Theorderswegetfromclientsareconcerningtransportation.TheywanttoplaceanorderfromustocarrytheircargotoFinland.Thesearetheorderswearereceiving.Mostofthemarecomingbye-mail.WearenotusinganyInternetplatforms.However,salesdepartmenthavedifferentsystems.Weareusingsoftwareformakingtransportquotationsandcustomermanagement.
Whatsystemlimitationsyouhavetodealdaily?
Forinstance,systemdoesn’tshowamountofjobsforaparticularclient.IfIwanttocheckhowmanyshipmentswasprocessedforparticularclient,Ineedtomakearequestforthisinformationthroughanotherdepartment.Iamnotupdatedwithmyclient’svolumes.
Howdoyouthinkthisinformationcouldhelpyou?
Forexample,Ihadameetingwithmybiggestclient.Ididn`tknowhowmanyoftheirshipmentswecarried.ButIshouldknowthat.AsIsaid,Ineedtomakearequestforthatinformation.However,thisinformationIshouldgetquickly.
Howdoyoumanageinformationalandmaterialflowsinyourcompany?
Sometimesinformationiscomingfasterthantheactualmaterial.However,sometimesitisviceversa.Forexample,onepalletfromItalytoFinlandtoourclient.Thegoodscameearlier,thentheinformation.Andthereisnosystematicallyregularity.
Whatinnovationsyouhaveexperiencedinthepast5yearsinyourcompany?
Ouraimwastoimprovethecargoflow,forinstance.Andallthesupplychainmanagement.Ontheotherhand,thecompanyhasgrown.Sosomeway,wehavebeenforcedtochangesincewewereasmallercompany.Becauseourvolumesaresomuchhigher.Sothesechangedhavebeennecessary.
Howyoucompanyisimprovingitswarehouseoperations?
Wehavemanytrailerscomingtoourwarehouses.Andtheamountisincreasing.Wehavemovedloadingandunloadingoperationsfromourterminaltooursubcontractors,whohas10000sqmcomparetoour1000sqmwithfewworkers.Whereassubcontractorshavetensandhundreds.Sotheycanprocessmoretrailersinshortertime.
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InwholeFinlanddemandhasincreased.Economicreasons;freighttransportationcompanies;nobodyishavingtheirownterminalactually,exceptbigplayers.However,theirterminalworkersarehiredforshortterm.Itallowsthemtoadjustfordemandfluctuations.
Whatchallengesyourcompanyisfacingwhendealinginsupplychain?
Themainchallengesareininformationflowbetweenourcompanyandthesubcontractor’sterminal.Westartedusingthisterminalatthebeginningofthisyear,soeverythingisquitenewforus.Firstmonthswerequitechallenging.Ithinkthatinformationinourbusinessisalwaysnumberone.Itisalwaysthemostimportantmatter.Whateverhappens,informationmustcomefirstandafterthatcargo.Butthetimegapbetweenthisinformationandactualphysicalprocessmustnotbetoolong.TheinformationmustcomeonMondayforinstance,thattomorrowyouwillreceiveonepalletfromItalyfromthisandthissupplier.Notviceversa,thatpalletcomesfirstandthentheinformation.
WhatkindofITsolutionsyouuseinyoursupplychain?
Barcodessystems,thesearewhatweareusing.Andforinstance,theorderinformationwesendingtotheterminalconcerningeachtrailer,whichconsistsof20-30differentshipments.Wehavetosendtheinformationtotheterminal,whatcargothereisandwhattheyhavetodowiththiscargo.Sumofitmustbeunloaded,sumofthatmustbeleftinsidethetrailer,becausethisis,forinstance,veryheavy,oritisbigconsignmentwhichwedeliverrightaway.ThisistransferredwithEDIautomatically!Afterthejobisdonetheyaresendingconfirmation.Ifthereisdamageormissinggoods,theywillinformthat.Wehavetoreadthismessagethatsomecargowasmissing,thenwehavetodosomethingtofindit.
Whatissuesyouhavewithpartnersandhowyouaredealingwiththem?
Well,thepartnerswehaveweareonweeklycontact.Unfortunately,lackofinformationhappenssometimes,whichismoreofamisunderstanding.Usually,themainproblemrelatedtothepartnerisamoneyproblem.
Whatotherissuesyouhavetodealwithinyoursupplychain?
Itdoesn’thappenoften,butsometimesourpartnersinothercountriescanmakemistake,whichcanleadfordelaysindelivery.Sometimesitcanhappenthatinourtrailerthereisnospaceenough.Sopartoftheshipmentstaysinthewarehouse.
OutsideEU.Whentalkingaboutcontainershipping.Containersdonotbelongtous.Theybelongtoshippingcompanies.ThereisshortageofcontainersinFinland.
Concerningcustomsclearance.IfyouimportfoodfromChina,customstakesamplesofit.Whichmayresultforadelay.Sincethewholeshipmentiswaitingtheclearance.However,thisispartofthebusiness,andwearenotworseorbetterinthiscomparingtoourcompetitors.Wecan’tmakechangestothismatter.
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Therearesomanyoutsidefactorsthatcanaffecttheoperation;thereisstorminthesea,orthereissomehazardouscargothatisnotsufficientlysecuredforinstanceorthepapersarenotcorrect.Aslongaspeoplearedoingthisjobthereisalwaysariskofsomethinggoingwrong.
Howtoimproveinformationflowofdailyoperations?
Forexample,thereisatrafficoperatorinItaly,Verona,whoistypetheinformationabouttheshipment.Andthen,byEDIthisinformationcomestoouroffice.Andourtrafficoperatordoesnotneedtotypeitagain.Sooursystemsaretalkingtoeachother.Iftherearemistakesormissinginformation,wecompleteorchangeit.
Howtoimprovematerialflowofdailyoperations?
Getmorevolume,makebiggershipments.Inourregion,thereisenvironmentallimitationonthespeedofships.Only0.1%ofSulfuricisallowed.Anotherproblemisthescheduleofthedeliveries.IntheexampleofItaly,therearenotdeparturestoFinlandearlyintheweek(Monday,Tuesday)youcan`tgetthatonepallet.Becausethereisnomanyshipments.ThustheshipmentswillleaveThursday,Friday.Sospeedisnotthemainproblem.However,iftheshipmentisFLC,wecansendthetrailerrightaway.
Howdoyouseethedevelopmentoflogisticsindustry?
Ittechwillimprovealot.Automationisthenextstepofthedevelopment.Someofourcompetitorsprovidecustomeraccesstotheirinformationalsystems.Butitnotnecessaryhelpingcause,itthereisnoinformationthereisnothingtosee.IfthecargoisnotyetinFinland,itisinItalystill.Itdoesn’thelpifcargoisnotmoving.