Supply Chain Integration - The impact of the internet on supply chain strategies

8 important questions on Supply Chain Integration - The impact of the internet on supply chain strategies

The internet and the emerging e-business were supposed to reduce cost, increase service level, and increase flexibility and profits. What happened in reality?

All expectations have gone unmet. Costs were not reduced, service level not increased, flexibility and profits did not increase. Many e-businesses have not been successful. In many cases, the downfall of some highest-profile Internet businesses has been attributed to their logistics strategies.

The definition of e-business en e-commerce lead to three observations. Which observations?

  1. E-commerce is only a part of e-business.
  2. Internet technology is the force behind the business change.
  3. The focus in e-business is on the extended enterprise, that is, intra-organizational, business-to-consumer (B2C), and business-to-business (B2B) transactions.

Which strategies are implemented within the Internet business?

The Internet pushed companies away from the push strategy, but found out a pull strategy was not ideally. Thus, most use a push-pull strategy.
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Why did most online grocery stores fail?

No current online grocers have the density of customers that will allow them to control transportation costs, and therefore compete successfully with traditional supermarkets.

How does the book industry manage its supply chain?

Inventory at the warehouses are managed with a push strategy, while demand is satisfied based on individual requests, a pull strategy.

As a result of going online, the retail industry (click-and-mortar firms) have changed their approach to what?

To stocking inventory. High-volume, fast-moving products, whose demand can be accurately matched with supply based on long-term forecasts, are stocked in stores, while low-volume, slow-moving products are stocked centrally for online purchasing.

What insight provides the evolution of the supply chain strategies in various industries through e-business?

The Internet and the associated new supply chain paradigms introduce a shift in fulfillment strategies: from cases and bulk shipments to single items and smaller-size shipments, and from shipping to a small number of stores to serving highly geographically dispersed customers.

What is the impact of e-fulfillment on the transportation industry?

This is the significant increase in reverse logistics and thus parcel shipping, since this has a short lead time, which is needed to be able to serve globally dispersed consumers. Moreover, parcel transportation has a great information infrastructure which enables real-time tracking.

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