E-Commerce: Order Fulfillment, E-CRM, and Other Support Services

Module 03

Order Fulfillment, E-CRM, and Other Support Services:

Overview of Order Fulfillment:

Order fulfillment: All of the activities needed to provide customers with ordered goods and services, including related customer services.

Back-office operations: The activities that support fulfillment of sales, such as accounting and logistics.

Front-office operations: The business processes, such as sales and advertising, which are visible to customers.

E-Commerce Services:

EC Applications:

•         E-Infrastructure

•         E-Process

•         E-Market

•         E-Communities

•         E-Service

•         E-Content

Fig. E-Commerce Services:

Overview of Logistics:

Logistics: The operations involved in the efficient and effective flow and storage of goods, services, and related information from point of origin to point of consumption.

The EC Order Fulfillment Process:

–        Step 1: Making sure the customer will pay

–        Step 2:Checking for in-stock availability

–        Step 3:Arranging shipments

–        Step 4: Insurance

–        Step 5: Replenishment (to make full or complete again, as by supplying what is lacking, used up, etc.)

–        Step 6: In-house production

–        Step 7: Use suppliers

–        Step 8: Contacts with customers

–        Step 9: Returns

Reverse logistics: The movement of returns from customers to vendors.

E-logistics: The logistics of EC systems, typically involving small parcels sent to many customers’ homes (in B2C).

Traditional Versus EC Logistics:

-Traditional logistics deal with movement of large amounts of materials to a few destinations

-E-logistics shipments typically are small parcels sent to many customers’ homes.

Problems in Order Fulfillment:

Typical Supply Chain Problems:

–        The inability to deliver products on time

–        High inventory costs

–        Quality problems due to misunderstandings

–        Shipments of wrong products, materials, and parts

–        Cost to expedite operations or shipments is high.

Why Supply Chain Problems Exist:

Problems along the EC supply chain stem from uncertainties and from the need to coordinate several activities, internal units, and business partners.

Third-party logistics (3PL) suppliers:

External, rather than in-house, providers of logistics services.

Solutions to Order Fulfillment Problems:

•         Improvements in the Order-Taking Process

•         Improvements of Warehousing and Inventory Management

•         Speeding Deliveries

•         Partnering Efforts and Outsourcing Logistics

•         Handling Returns

•         Innovative E-Fulfillment Strategies.

Fig : B2B Buy and Ship Options:

CRM and Its Relationship with Electronic Commerce:

Customer Relationship Management (CRM): A customer service approach that focuses on building long-term and sustainable customer relationships that add VALUE both for the customer and the company.

Types of CRM Activities:

•         Operational

•         Analytical

•         Collaborative

Classification of CRM Programs:

•         Loyalty programs.

•         Prospecting.

•         Save or win back.

•         Cross-sell/up-sell.

eCRM: Customer relationship management conducted electronically.

The Scope of CRM:

The three levels of CRM:

1.      Foundation of service

2.      Customer-centered services

3.      Value-added services.

The Extent of Service:

1. Customer acquisition (pre-purchase support)
2. Customer support during purchase
3. Customer fulfillment (purchase dispatch)
4. Customer continuance support (post-purchase)

CRM Implementation Issues:

Five factors that are required to implement a CRM program effectively:

1. Customer-centric strategy
2. Commitments from people
3. Improved or redesigned processes
4. Software technology
5. Infrastructure

Metrics in Customer Service and CRM:

•         Response time

•         Site availability

•         Download time

•         Timeliness

•         Security and privacy

•         On-time order fulfillment

•         Return policy

•         Navigability

Fig: CRM Applications:

Delivering Customer Service in Cyberspace: CRM Applications and Tools:

Customer-Touching Applications

–        Personalized Web pages

–        E-commerce applications

–        Campaign management

Online Networking

•         Forums

•         Chat rooms

•         Usenet groups

•         E-mail newsletters

•         Discussion lists

E-Mail Newsletters

Discussion Lists

Why Outsource EC Services?

–        A desire to concentrate on the core business

–        The need to have services up and running rapidly

–        Lack of expertise (experience and resources) for many of the required support services

–        The inability to have the economy of scale enjoyed by outsourcers, which often results in high costs for in-house options

–        The inability to keep up with rapidly fluctuating demands if an in-house option is used

–        The number of required services, which usually are simply too many for one company to handle

Fig: E-Commerce Application Development Process:

E-Commerce: E-Supply Chains, Collaborative Commerce, Intra-business EC, and Corporate Portals:

Module 06
E-Supply Chains, Collaborative Commerce, Intra-business EC, and Corporate Portals:

E-Supply Chains:

Definitions and Concepts:

Supply chain: The flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers.

E-supply chain: A supply chain that is managed electronically, usually with Web technologies.

Supply Chain Parts:

–        Upstream supply chain

–        Internal supply chain

–        Downstream supply chain

Managing Supply Chains: Managing supply chains can be difficult due to the need to coordinate:

•         Several business partners

•         Several internal corporate departments

•         Numerous business processes

•         Possibly many customers

•         Information technology provides two types of software solutions:

1.      SCM

2.      ERP and its predecessors MRP and MRP II

E-supply chain management (e-SCM): The collaborative use of technology to improve the operations of supply chain activities as well as the management of supply chains.

The success of an e-supply chain depends on:

-          The ability of all supply chain partners to view partner collaboration as a strategic asset

-          Information visibility along the entire supply chain

-          Speed, cost, quality, and customer service

-          Integrating the supply chain more tightly.

Activities and Infrastructure of e-SCM:

-          Supply chain replenishment

-          E-procurement

-          Supply chain monitoring and control using RFID

-          Collaborative planning

-          Collaborative design and product development

-          E-logistics

-          Use of B2B exchanges and supply webs

Infrastructure for e-SCM:

-          Electronic Data Interchange (EDI)

-          Extranets

-          Intranets

-          Corporate portals

-          Workflow systems and tools

-          Groupware and other collaborative tools.

Typical Problems along the Supply Chain:

–        Supply chains can be very long, involving many internal and external partners located in different places

–        Both materials and information must flow among several entities, and these transfers, especially when manually handled, can be slow and error-prone

–        Companies can improve their demand forecasting by using IT-supported forecasts, which are done in collaboration with business

–        A lack of logistics infrastructure exacerbates uncertainties that exist in delivery times

–        Quality problems with materials and parts can contribute to deficiencies in the supply chain

–        Pure EC companies are likely to have more supply chain problems because they do not have a logistics infrastructure and are forced to use external logistics services.

–        Other problems along the EC supply chain mainly stem from the need to coordinate several activities and internal units and business partners.

Bullwhip effect: Erratic shifts in orders up and down supply chains.

The Need for Information Sharing along the Supply Chain:

A supply chain includes the flow of information to and from all participating entities.

It includes:

•         Product pricing

•         Inventory

•         Shipping status

•         Credit and financial information

•         Technology news

EC Solutions along the Supply Chain:

–        Order taking can be done over the Internet, EDI, EDI/Internet, or an extranet, and may be fully automated

–        Order fulfillment can become instant if the products can be digitized

–        Electronic payments can expedite both the order fulfillment cycle and the payment delivery period.

–        Managing risk to avoid supply-chain breakdown can be done in several ways

–        Inventories can be minimized by introducing a build-to-order (on-demand) manufacturing process as well as by providing fast and accurate information to suppliers

–        Collaborative commerce among members of the supply chain can be done in many areas.

Collaborative Commerce

Electronic Commerce

•     Spend Management –    A data warehouse repository designed to manage data from multiple data sources –    Data management of contracts, supplier catalogs, and product content –    Data management of pricing –    Detailed standard and ad hoc purchasing activity analysis and report tools –    Updates, notifications, and alerts regarding purchasing

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Collaborative commerce (c-commerce): The use of digital technologies that enable companies to collaboratively plan, design, develop, manage, and research products, services, and innovative EC applications.

Collaboration hub: The central point of control for an e-market. A single c-hub, representing one e-market owner, can host multiple collaboration spaces (c-spaces) in which trading partners use c-enablers to exchange data with the c-hub.

Mobile Collaborative Networks and Grid Computing:

Grid computing: A form of distributed computing that involves coordinating and sharing computing, application, data, storage, or network resources across dynamic and geographically dispersed organizations.

-Mobile networks have the ability to share valuable business information in mobile scenarios with those who are co-located or remote and who are not necessarily from the same enterprise.

Vendor managed inventory (VMI): The practice of retailers making suppliers responsible for determining when to order and how much to order.

RFID Technology Contributes Value at Three Levels:

–        Immediate value

–        Short-term value

–        Long-term value

Limitations of RFID:

–        For small companies, the cost of the system may be too high

–        Radio frequency interference and RFID’s limited range (30 to 50 feet) also may be problematic  

           

Collaborative Commerce and Knowledge Management:

–        Knowledge management is the process of capturing or creating knowledge

–        C-commerce is essentially an integration of KM, EC, and collaboration tools and methodologies that are designed to carry out transactions and other activities within and across organizations.

Barriers to C-Commerce:

–        Technical reasons involving integration, standards, and networks

–        Security and privacy concerns

–        Internal resistance to information sharing and to new approaches

–        Lack of internal skills to conduct collaborative commerce

–        Lack of defined and universally agreed-upon standards.

Collaborative planning, forecasting, and replenishment (CPFR): Project in which suppliers and retailers collaborate in their planning and demand forecasting to optimize flow of materials along the supply chain.

Advanced planning and scheduling (APS) systems: Programs that use algorithms to identify optimal solutions to complex planning problems that are bound by constraints

Product lifecycle management (PLM): Business strategy that enables manufacturers to control and share product-related data as part of product design and development efforts.

Internal Supply Chain Solutions:

Intrabusiness and B2E:

The internal parts of the supply chain are related to the value chain and include:

–        Inbound logistics

–        Production processes

–        Outbound logistics

–        Marketing and sales

–        Customer services

Intra-business EC: E-commerce activities conducted within an organization.

Intrabusiness can be done:

1.      Between a business and its employees

2.      Between units within the business

3.      Among employees in the same business.

Business-to-employee (B2E): Intrabusiness EC in which an organization delivers products or services to its employees.

Some Representative Applications of B2E include:

–        Providing field representatives and employees in yards, warehouses, and other non-office places with electronic communication tools

–        Training and education provided over intranets

–        Employee use of desktop purchasing

–        Employee use of the corporate intranet for both corporate and personal use to purchase discounted insurance, travel packages, and tickets to events.

–        Providing office employees with electronic tools for communication, collaboration, and information discovery

–        Offering corporate stores on the intranet that sell the companies’ products to their own employees, usually at a discount

–        Systems that disseminate information or allow employees to manage their fringe benefits via the intranet

Activities between Business Units:

–        Transactions between strategic business units can be easily automated and performed over the organization’s intranet

Activities among Corporate Employees:

–        Many large organizations also provide a system by which employees can collaborate on an individual (sometimes nonbusiness) level.

Integration along the Supply Chain:

Enabling Integration:

–        To ease the task of integration, vendors have developed integration methodologies and special software called middleware

–        In addition, major efforts are being undertaken to develop standards and protocols that will facilitate integration.

Corporate (enterprise) portal: A gateway for entering a corporate Web site, enabling communication, collaboration, and access to company information

Reasons for implementing corporate portals:

–        To cut costs

–        To free up time for busy executives and managers

–        To add to the bottom line

Types of Generic Portals:

–        Portals for suppliers and other partners

–        Customer portals

–        Employee portals

–        Executive and supervisor portals

–        Mobile portals

Mobile portals: Portals accessible via mobile devices, especially cell phones and PDAs.

Functionalities of Portals:

Information portals: Portals that store data and enable users to navigate and query these data.

Collaborative portals: Portals that allow collaboration.

Corporate Portal Applications:

–        Knowledge bases and learning tools

–        Business process support

–        Customer-facing (front-line) sales, marketing, and services

–        Collaboration and project support

–        Access to data from disparate corporate systems

–        Personalized pages for various users.

–        Effective search and indexing tools

–        Security applications

–        Best practices and lessons learned

–        Directories and bulletin boards

–        Identification of experts

–        News

–        Internet access

Collaboration-Enabling Tools:

Workflow: The movement of information as it flows through the sequence of steps that make up an organization’s work procedures.

Workflow systems: Business process automation tools that place system controls in the hands of user departments to automate information processing tasks.

Workflow management: The automation of workflows, so that documents, information, and tasks are passed from one participant to the next in the steps of an organization’s business process.

Types of Workflow Applications:

–        Collaborative workflow

–        Production workflow

–        Administrative workflow

The benefits of workflow management systems include:

–        Improved control of business processes

–        Improved quality of services

–        Lower staff training costs

–        Lower management costs, which enables managers to concentrate on nurturing employees and handling special cases rather than on routine reporting and distribution issues

–        Improved user satisfaction

Groupware: Collaboration Tools:

Groupware: Software products that use networks to support collaboration among groups of people who share a common task or goal.

Synchronous versus asynchronous products

•         synchronous communication and collaboration are done in real time

–        Web conferencing

–        Instant messaging

–        Voice-over-IP (VOIP)

•         asynchronous communication and collaboration are done by the participants at different times

–        Databases

–        Browsers

–        Online workspaces

Virtual meetings: Online meetings whose members are in different locations, even in different countries

 Group decision support system (GDSS): An interactive computer-based system that facilitates the solution of semi-structured and unstructured problems by a group of decision makers

Real-Time Collaboration Tools:

–        Real-time collaboration (RTC) tools help companies bridge time and space to make decisions and collaborate on projects

–        RTC tools support synchronous communication of graphical and text-based information

–        These tools are used in distance training, product demonstrations, customer support, e-commerce, and sales applications.

Electronic Teleconferencing:

Teleconferencing: The use of electronic communication that allows two or more people at different locations to have a simultaneous conference.

Video teleconference: Virtual meeting in which participants in one location can see participants at other locations on a large screen or a desktop computer

Data conferencing: Virtual meeting in which geographically dispersed groups work on documents together and exchange computer files during videoconferences

Voice-over-IP (VOIP): Communication systems that transmit voice calls over Internet Protocol-based networks

Other Groupware Tools:

–        Interactive whiteboards

Screen sharing: Software that enables group members, even in different locations, to work on the same document, which is shown on the PC screen of each participant

–        Instant video

Virtual reality (VR): System that delivers interactive computer-generated 3D graphics to a user through a head-mounted display

Implementation Issues for Online Collaboration:

–        An organization needs an effective collaborative environment

–        The need to connect collaborative tools with file management products on an organization’s intranet

–        Protocols are needed for easy integration of different applications and for standardizing communication