1 / 48

Adapted from E-Logistics

Adapted from E-Logistics. H. Donald Ratliff don.ratliff@isye.gatech.edu Pinar Keskinocak pinar@isye.gatech.edu www.tli.gatech.edu. E-business: changes the way we think!!!. Buying Selling Fulfillment Inventory Transportation Software Investment Outsourcing. Internet.

selina
Download Presentation

Adapted from E-Logistics

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Adapted from E-Logistics H. Donald Ratliff don.ratliff@isye.gatech.edu Pinar Keskinocak pinar@isye.gatech.edu www.tli.gatech.edu

  2. E-business: changes the way we think!!! • Buying • Selling • Fulfillment • Inventory • Transportation • Software • Investment • Outsourcing

  3. Internet • The worldwide number of Internet users: 196 million in 1999 (International Data Corporation) • The number of users is expected to reach one billion by 2008 • Users who have been online for more than three years spend an average of 10.5 hours per week online, compared with 6.6 hours a week for newcomers • By 2002 there will be over 85 million smart hand-held devices in the world

  4. E-commerce growth • E-commerce volumes double every 9-12 months • B2B volumes are expected to exceed B2C by a factor of 6 to 12 by 2005 • By 2002, E-commerce revenues will exceed 1% of Global Economic Product

  5. On-line Retail founded 1873 1000 stores in the U.S. on-line presence: May 1997 founded 1971 1100 stores in the U.S. on-line presence: late 1998 founded 1994 no physical stores on-line presence: July 1995

  6. Revenues $3.1 B (+10%) $2.7 B (+17%) $0.6 B (+313%)

  7. Profits

  8. 40 30 $2.2 B 40 30 20 $1.3 B 200 150 100 50 $19.2 B Market Cap

  9. Amazon.com • $300 million distribution-center initiative • Books, music videos, toys and electronics • New DCs in Nevada, Kentucky and Kansas • “Fastest expansion of distribution capacity in peacetime history” Bezos Ref: Wall Street Journal Sept 8, 1999

  10. Challenges • Don’t outsource -- keep skills they develop • Design flexible DC’s -- don’t know what will go in them • Features: • Orders with many address and message on each • Wish lists • Tracking searches: Pokedex?

  11. E-services Shipment rating Document preparation Tracking E-mail alerts Programmer APIs UPS 55% of online Christmas FedEx 1994 tracking web site “Smarter companies” Dismissed residential Dismissed mail order 10% of online Christmas USPS Cheap home delivery 34% of online Christmas Package Delivery Wall Street Journal Nov 4, 1999

  12. Package Delivery Challenges • 20 million customers expected to purchase over the Internet by 2007 • Home Deliveries • Currently 10% of the package delivery volume • Average revenues per delivery • Commercial Areas: $28.00 • Suburban Areas: $10.40 • Core business • Capacity • Cost -USPS

  13. E-Grocery • $450 billion brick-and-mortar industry • E-grocery growth forecast • $148 million • $3.5 billion by 2002

  14. Webvan Automation! • Management • Lewis Borders (Borders Books) • George Shaheen (Andersen Consulting Chief Exec) • Financial • ½ year revenue = $395,000 • ½ year net loss = $33,500,000 • Market cap = $4.9 billion • Logistics • $1 billion with Bechtel Group for 26 giant warehouses • Focus on automation (carousels) Ref: Wall Street Journal Sept 22, 1999

  15. Delivery parameters • WebVan • Free for orders > $50 • $3.95 for orders < $50 or redeliver • Scheduled 30 min window (2 pm to 10 pm) • Streamline • $30/mo • Peapod • $5-$20 per delivery in Chicago • HomeGrocer • Free for orders > $75 • 90 minute window • Next day delivery

  16. Keys to home delivery • Efficient customer receiving • Routing efficiency • Frequency • Multi-product delivery • Logistics expertise

  17. B2C Personalization • Pink Dot • Amazon.com • CDNow • Collaborative filtering technology • Net Perceptions • Andromedia • LikeMinds server • Vignette Ref: USA Today 11/15/99

  18. Top 10 online businesses • Intel Corp. ($10.5 billion) • Cisco Systems Inc. ($9.5 billion) • IBM Corp. ($8.8 billion) • Dell Computer Corp. ($6.1 billion) • Federal Express Corp. ($5.6 billion) • United Parcel Service of America ($5.4 billion) • America Online Inc. ($4.4 billion) • Ingram Micro Inc. ($3.0 billion) • Nortel Networks Corp. ($2.4 billion) • Tech Data Corp.($1.7 billion)

  19. E-commerce revenues

  20. B2B vs B2C • Smaller number of clients • Larger volume per transaction/client • Restricted sales to certain clients • Interface with back-end systems • Complex buy/make/sell decisions • Computer to computer

  21. Electronic Business Integration (EBI) Enterprise Resource Planning (ERP) E-business transactions Intra Company Rigid Interfaces Inter Company Flexible Interfaces

  22. e-Procurement • Advantages • Broader base of suppliers • Automatic billing • Lower transaction cost • Office Depot • Processing purchase order and paying invoice >$100 • Using the Web $15 to $25 • Shorter cycle time

  23. e-Procurement • GE TPNPost • Pre-screened suppliers • Requests for Quotes (RFQs) • Multi-round bidding process • Commerce One • Electronic procurement • Multiple languages/currencies • International date • Number and address formats • International tax requirements

  24. E-Cars • Ford • Microsoft alliance • Minority interest in CarPoint • GM • 42 days to fill a special order • New initiative • Toyota • New system at a plant in Canada • Production within 5 days of order • Another 10 days to the dealer Ref: Wall Street Journal Aug 25, 1999, Sept 21 1999

  25. Integrated Business Communities (IBCs) • Ford-Oracle (AutoXchange) • Ford's extended supply chain online • Ultimately $300 billion in annual transactions • GM-Commerce One (GM MarketSite) • Transactions between GM suppliers, dealers and other business partners

  26. Build to order • Direct sales • Virtually integrated with suppliers and service providers • Daily production requirements to suppliers • Inventory levels and replenishment needs • Direct shipment from suppliers (e.g. Sony) • Real time information on service measures • High involvement in planning customers' PC needs (e.g. Boeing) • Inventory turns 30 times per year • Founded in 1984

  27. B2B Personalization • Dell Computer • > 1,500 personalized Premier Pages for corporate customers, linked to the customer’s intranet. • Configure PCs, direct access to corporate-specified personal computers, negotiated discounts, records of orders and payments, track delivery status, access to technical support. • Staples • Customized supply catalogs that can run on a company’s intranet, containing only those items and prices negotiated in contracts with that company. • Maintain lists of previously ordered items: easy reordering • Price discounts, recommending new items

  28. Collaboration • Collaborative forecasting • Wal-Mart: Collaborative forecasting for a new test product (medicine for flu and allergies). • Incorporate information about everything from planned changes in store layouts to precise meteorological data about pollen counts and when flu season will hit a certain region. • Eliminated a full 2 weeks of inventory from the supply chain, halved order cycle times and eliminated stock-outs. • Collaborative design • Collaborative replenishment • Vendor-managed inventory (VMI) programs

  29. CPFR • CPFR.org • Create collaborative relationships between buyers and sellers

  30. Electronic Business Integration (EBI) • “Traditional” EDI • 30 years • Very rigid • XML (eXtensible Markup Language) • Pure Internet standard - Feb 1998 • Flexible “tags” • Easy for humans to read • Easy for machines to process • Makes data portable • Will rapidly replace EDI

  31. Can FedEx reinvent itself? Wall Street Journal Nov 4, 1999 • Tracking shipments • Discount air carriers • Low cost truck lines • Ocean carriers • Deal with Cisco • Merge-in-transit • Up to 100 shippers/merge • Plan shipments and coordinate customs • Command and control center • Tens of millions of dollars

  32. E-hubs • Trading hubs • Products • Logistics services • Transaction hubs • Decision hubs

  33. Why use a hub? • Volume efficiency (Do it cheaper!) • Special knowledge or technology (Do it better!) • Neutrality (Do it fairer!) • Outsourcing (I don’t want to do it!)

  34. Info hubs • Trading hubs • Products • Logistics services • Transaction hubs • Decision hubs

  35. Truck Load-matching “Hubs” • DAT Services - 1978 • Largest load-finding service • Internet Truckstop - 1995 • 1st exclusively internet • National Transportation Exchange • 2,000-20,000 lb • mySAP.com Marketplace portal • 30 new load-matching sites last year Source: Heavy Duty Trucking, 1999

  36. Ocean Load-matching “Hubs” • Raterequest • Request best rate • Specify bid to match • Celarix

  37. Trading hub issues • Catalog models • Standards • Updating • Auction models • Price uncertainty • Service uncertainty • Exchange models • Price determination • Service uncertainty

  38. Info hubs • Trading hubs • Products • Logistics services • Transaction hubs • Decision hubs

  39. EDI hub • EDI via the internet - ECnetTM • Focus on Electronics Manufacturing

  40. Ship & track hub • Shipment planning & booking • Ship and delivery notices • Electronic payment • Tracking and tracing • Celarix - iSuite • UPS Worldwide - eLogistics.net

  41. Buy & ship hub • Procurement consolidation National Golf Course Owners

  42. Info hubs • Trading hubs • Products • Logistics services • Transaction hubs • Decision hubs

  43. Route planning hub • Easyroute.com • Descartes • On-line routing • Focus on small fleets

  44. “Do everything” hub

  45. E-commerce in Asia • One in five CEOs of Asian companies expects to see a fifth of their revenue come from e-business in the next five years (Pricewaterhouse-Coopers and the World Economic Forum) • The number of Internet users in Asia will triple to 60 million by 2003 (Goldman Sachs) • E-commerce volume $35 billion by 2002 (International Data Corp)

  46. Opportunities New transportation demand Capacity utilization Paperless transactions Visibility Connectivity technology Decision technology Outsourcing Concerns Speed of change Lack of expertise New technology Complexity Short lead-times E-business future

  47. Collaboration Vendor managed replenishment Fulfillment Home delivery Personalization Collaborative filtering Build to order Electronic Business Integration (EBI) Tracking Disintermediation Merge in transit Sourcing Integrated Business Communities (IBCs) Trading exchanges Information exchanges E-hubs Collective buying Planning E-logistics opportunities

  48. Questions Comments

More Related