Chapter 11 Electronic Commerce logistics 11.1 The Overall Electronic Commerce Logistics 11.1.1 The Logistics And the Logistical System Interest in the Internet has changed so drastically in recent years that one can speak of a universal breakthrough. The remarkable increase in users can be attributed mainly to the appeal of the World Wide Web, the Internet feature that is enjoying the greatest growth. There is some incertainty about how much the Internet and electronic commerce(e-commerce)are being used, and especially about the expansion of such usage in the future. At the same time, e-commerce is a new phenomenon that is surely going to have an enormous impact and significantly change the way both individuals and companies shop, manage their business activities and distribute their products. The number of households in Europe connected to the Internet is expected to triple, to 50 million, by the year 2004 But usage will not expand uniformly. Persistent forecasts of explosive increases in sales of goods via the Internet have so far been wrong In Sweden, The Swedish Research Institute of Trade(hUi, recently assessed retail sales via the Internet to be SEK 600 million, which corresponds to a trifling 0.2% of total retail turnover,(Karp, 1999) Increased access to Internet services must be accommodated by improvements in flow structures The increased access to and offers of information created by the Internet must consequently be accompanied by a different distribution structure, one assuring that goods can even physically be transported to the customer quickly and rationally E-commerce will open an entirely new market for actors in the logistics field. Logistics and distribution systems that function efficiently and effectively in all respects will be crucial for the success of the companies involved This implies that manufacturing companies, and especially logistics companies, must identify and create effective logistics solutions in order to compete on the marketplace Ordering materials of various kinds electronically, and primarily via the Internet, will become more and more common This applies not only to business-to-business but also to business-to-customer. This end consumer will normally be a private person who orders everything from books, clothes and food to a new model computer. The result is that the end consumer can receive and will demand to receive the goods ordered significantly faster than via traditional distribution. The subsequent result will be shorter lead times, the disappearance of one or more physical intermediaries, and direct transports to far more addresses, especially in those cases where retail stores are circumvented. We can anticipate less use of private cars, but more employment of delivery vans, as well as smaller orders to be shipped longer distances, especially in the international context During the preliminary phase, we might expect these consequences to imply greater direct costs, while the consumers' indirect costs for seeking, ordering and having their purchases deliver to their homes will go down. Simultaneously, however, we will see new opportunities for creating entirely new distribution systems involving different flow streams than those with which we are familiar. The companies who can cope with these demands with new approaches to production and distribution will be able to create new business opportunities and prepare for a greatly increased market for their products he Internet signifies new opportunities for reaching the global market. Yet this, in turn, also signifies great demands on the actors who want to exploit these opportunities. Right now, there are several big actors who market themselves solely via the Internet(e.g the booksellers Amazon. com and bokus. se), yet there are very few who do this profitably. Making it possible to use the Internet as a marketing channel requires new knowledge about how the entire logistics system needs to be developed in various environments -and about the consequences this will imply for other actors 11.1.2 Close Relationship of e-commerce and logistics Logistics and supply chain management in the largest multinational corporations have
Chapter 11 Electronic Commerce Logistics 11.1 The Overall Electronic Commerce Logistics 11.1.1 The Logistics And the Logistical System Interest in the Internet has changed so drastically in recent years that one can speak of a universal breakthrough. The remarkable increase in users can be attributed mainly to the appeal of the World Wide Web, the Internet feature that is enjoying the greatest growth. There is some uncertainty about how much the Internet and electronic commerce (e-commerce) are being used, and especially about the expansion of such usage in the future. At the same time, e-commerce is a new phenomenon that is surely going to have an enormous impact and significantly change the way both individuals and companies shop, manage their business activities and distribute their products. The number of households in Europe connected to the Internet is expected to triple, to 50 million, by the year 2004 But usage will not expand uniformly. Persistent forecasts of explosive increases in sales of goods via the Internet have so far been wrong. In Sweden, The Swedish Research Institute of Trade (HUI), recently assessed retail sales via the Internet to be SEK 600 million, which corresponds to a trifling 0.2% of total retail turnover, (Karp, 1999). Increased access to Internet services must be accommodated by improvements in flow structures. The increased access to and offers of information created by the Internet must consequently be accompanied by a different distribution structure, one assuring that goods can even physically be transported to the customer quickly and rationally. E-commerce will open an entirely new market for actors in the logistics field. Logistics and distribution systems that function efficiently and effectively in all respects will be crucial for the success of the companies involved. This implies that manufacturing companies, and especially logistics companies, must identify and create effective logistics solutions in order to compete on the marketplace. Ordering materials of various kinds electronically, and primarily via the Internet, will become more and more common. This applies not only to business-to-business but also to business-to-customer. This end consumer will normally be a private person who orders everything from books, clothes and food to a new model computer. The result is that the end consumer can receive and will demand to receive the goods ordered significantly faster than via traditional distribution. The subsequent result will be shorter lead times, the disappearance of one or more physical intermediaries, and direct transports to far more addresses, especially in those cases where retail stores are circumvented. We can anticipate less use of private cars, but more employment of delivery vans, as well as smaller orders to be shipped longer distances, especially in the international context. During the preliminary phase, we might expect these consequences to imply greater direct costs, while the consumers’ indirect costs for seeking, ordering and having their purchases deliver to their homes will go down. Simultaneously, however, we will see new opportunities for creating entirely new distribution systems involving different flow streams than those with which we are familiar. The companies who can cope with these demands with new approaches to production and distribution will be able to create new business opportunities and prepare for a greatly increased market for their products. The Internet signifies new opportunities for reaching the global market. Yet this, in turn, also signifies great demands on the actors who want to exploit these opportunities. Right now, there are several big actors who market themselves solely via the Internet (e.g. the booksellers Amazon.com and bokus.se), yet there are very few who do this profitably. Making it possible to use the Internet as a marketing channel requires new knowledge about how the entire logistics system needs to be developed in various environments — and about the consequences this will imply for other actors. 11.1.2 Close Relationship of e-commerce and logistics Logistics and supply chain management in the largest multinational corporations have
undergone a transformation triggered by the worldwide spread of digital communications, and ecommerce in particular. In logistics and supply chain management the evolution of modern e alone cannot deliver rt are networks to add ss(B2B)e-commerce arena are stagg to over US$8 trillion by Feberary 2005 online. But, the delivery has to be an see a product online, order and even pay for it ics thus emerges as a key component in the battle for supre c shopping. Something like thre kes place in the US. The country also accoun 99 Christmas shopping season in s. First, there was the virtual explos o a meagre I per cent of total le delivery snarl-ups. Severa the first week of December Christmas holiday I ate deliveries as of expl it temporarily. some of the best-kn obvious question: Can Web merchants d particularly the distribution, war ncerned with site design and marketing. Ih ervices or Federal Express or the gove Also, the number of ite flowers, toy sand music and financial p ransportation cost turned out to be the biggest deterrent for those in favour of online purchases of physical oducts. Second, traditional warehouses and distribution centr e lal wa s prov or catering the requirements of e-commerce-. But then, this should not have come as surprise. Even in
undergone a transformation triggered by the worldwide spread of digital communications, and ecommerce in particular. In logistics and supply chain management the evolution of modern e-commerce practices may be traced back to the 1970s, when the use of electronic data interchange (EDI), or computer-to-computer digital communications began to displace traditional forms of data and information interchange; e.g., direct-link telephones, and mailed invoices and forms.11 MNEs in the triad of economic blocks – i.e., North America, European Union and Asian economic power, the latter led by Japan – dominate world trade and foreign direct investment.12 MNEs are involved in markets of extensive geographic coverage and normally need to maintain effective networks to carry out appropriate governance across borders and continents. The Internet, along with other types of information and communications technology, is naturally adopted as a tool in the networks between headquarters, regional offices, local offices and respective markets. Branch offices of MNEs that require logistics services but are distant from each other and their markets also make extensive use of e-commerce. One of the influences that the Internet has brought to the management of the supply chain and logistics is to create opportunities to integrate information and decision-making across different functional units13. The ability of the Internet to overcome problems common to previous networks was a major facilitator of the process. Firms were motivated by a common need to deliver products quickly in a customer-driven market.14 For example, US ports and waterways handled more than 2 billion tons of domestic, imported and exported cargo in 2000. Companies were using logistics software and the Internet to run their businesses more efficiently and to meet the needs of customers. pointed to the relevance of exchanges of information in avoiding the problem of Forrester’s bullwhip effect, by which the accumulation of excessive stocks might be reduced. Among other benefits, information and communication technology, including the Internet, was expected to make the flow of goods transparent17, allow for the integrated management of a physically disintegrated unit,18 and permit decentralisation and centralisation within one operating system.19 The inter-relationship of e-commerce and logistics is increasing as more logistics firms adopt e-commerce facilities in their logistics management. Firms that engage in Internet transactions realize that e-commerce alone cannot deliver goods without proper logistics processes. Logistics operators, for their part, are deploying more intensive and sophisticated information and communication technology (ICT) networks to add value to their services. Projections in the business-to-business (B2B) e-commerce arena are staggering, ranging from US$1.3 trillion by Febrary 2003 to over US$8 trillion by Feberary 2005. 11.1.3 The value of logistics in electronic commerce Electronic commerce has its limits. One can see a product online, order and even pay for it online. But, the delivery has to be physical. Logistics thus emerges as a key component in the battle for supremacy in the great Web bazaar. The US is the place for electronic shopping. Something like three-quarters of all e-commerce in the world currently takes place in the US. The country also accounts for nearly 90 per cent of all commercial Web sites. The 1999 Christmas shopping season in the US was marked by two significant developments. First, there was the virtual explosion in Internet retail sales(though the total size of such sales was still limited to a meagre 1 per cent of total retail sales). Second, and more important, there were terrible delivery snarl-ups. Several retail chains including giants such as Wal-Mart announced as early as the first week of December that they could not guarantee delivery of orders by Christmas .The 1999 Christmas holiday Internet shopping in the US thus generated as many stories of failed and late deliveries as of explosive growth. A series of hackers’ attacks also disabled, albeit temporarily, some of the best-known e-commerce Web sites. These developments therefore raised the most obvious question: Can Web merchants deliver good on time? pay much attention to the issue of logistics, particularly the distribution, warehousing and delivery aspects. They were more concerned with Web site design and marketing. The dependence on organisations such as United Parcel Services or Federal Express or the government’s postal department for delivery was total. Also, the number of items traded on the Web were (and still are)limited; mainly books, flowers, toy sand music and financial products. Two things thus became clear: First, transportation cost turned out to be the biggest deterrent for those in favour of online purchases of physical products. Second, traditional warehouses and distribution centres proved unsuitable for catering to the requirements of e-commerce. But then, this should not have come as a surprise. Even in
physical shopping, shoppers after having visited the store sand chosen the goods and paid for them at the counters, are also required to arrange for the delivery of the goods. Either they themselves carry the goods back home or fix up with others to have them delivered. In other words, they do this at their own expense, both in terms of time and money. Replicating this operation efficiently down to an individual consumer can prove to a difficult task for a Web merchant. Financing it can make the job even harder dis the delivery problems revealed that the distribution system of traditional retailers is at a sadvantage. Even Wal-Mart, which is rated highly for its distribution system, found its system unable to cope with individual orders. It, therefore, decided to outsource its distribution. I outsourcing al ways the answer? It certainly seems to work for long distance deliveries by road UPS for example has been the biggest beneficiary of the e-commerce boom. But there is a problem. Many e-commerce firms are finding it risky to opt for outsourcing for picking and packing. The contractor working for many Web merchants will not be able to give all of them equal priority. Precisely for this reason, more and more e-commerce merchants are planning to ave their own giant automated warehouses. For example, Web van, an online grocery store in the US, proposes to spend $l billion on building a string of state-of-the art warehouses throughout the uS 11.2 Electronic commerce logistics model 11. 2.1 The general model for electronic commerce logistics This is to introduce a The Cutting-Edge Logistics Model Synchronizing the Flows of Goods, Information and Funds. First, Global commerce marches on-$10B/day $10B/second Second, nature of business is becoming more complex. So, Comprehensive model is needed to solve problems the approach is as follows Utilize The UPS Store retail network for convenient drop-off of laptops Utilize UPS's package delivery network for goods movement UPS Supply Chain Solutions handles parts management and technical repair Through we can get the results Eliminated multiple transportation steps and centralize parts and repairs Saved millions of dollars by streamlining its service operations Gained better inventory visibility Gained valuable data about product performance Achieved an edge in the fiercely competitive PC market Another model is THE SUPPLY CHAIN LOGISTICS SIMULATION MODEL The purpose of the Supply Chain Logistics Simulation Model is to provide macro level education and training for Supply Chain Logistics Management that is focused on Lean Enterprise concepts using a"Live"simulation model and interactive workshop approach The model provides a platform for participants to view, and execute an operating supply chain enterprise from an integrated macro perspective encompassing suppliers, consolidators, manufacturing plants, distribution warehousing, transportation, and customers within a"Class Room"training environment. The Supply Chain Logistics workshop provides both lecture and nds-on Supply Chain Logistics model training to test new concepts and variables using Design-Of-Experiment"techniques that focus on improving and optimizing the Lean Enterprise Supply Chain System. Workshop Supply Chain Logistics Model concepts and variables include Lean Enterprise-wide integration( Marco perspective Supplier Network Outsourcing and Consolidation Operations Lean Production Manufacturing Systems Distribution Warehousing Systems Acquisition and Consolidation of Manufacturing Plants Information Systems/E-Commerce/B-To-B Information, etc Customer Fulfillment and Satisfaction A working model will be used in the demonstration. The model requires a work team of 15 individuals(minimum)who will supply, manufacture, transport, warehouse, distribute and ship products to the customer in a simulated supply chain geographic region. Simulated support functions will be included for: Demand Forecasting, Customer Order Entry, Production Planning
physical shopping, shoppers after having visited the store sand chosen the goods and paid for them at the counters, are also required to arrange for the delivery of the goods. Either they themselves carry the goods back home or fix up with others to have them delivered. In other words, they do this at their own expense, both in terms of time and money. Replicating this operation efficiently down to an individual consumer can prove to a difficult task for a Web merchant. Financing it can make the job even harder. The delivery problems revealed that the distribution system of traditional retailers is at a disadvantage. Even Wal-Mart, which is rated highly for its distribution system, found its system unable to cope with individual orders. It, therefore, decided to outsource its distribution. Is outsourcing always the answer? It certainly seems to work for long distance deliveries by road. UPS for example has been the biggest beneficiary of the e-commerce boom. But there is a problem. Many e-commerce firms are finding it risky to opt for outsourcing for picking and packing. The contractor working for many Web merchants will not be able to give all of them equal priority. Precisely for this reason, more and more e-commerce merchants are planning to have their own giant automated warehouses. For example, Web van, an online grocery store in the US, proposes to spend $1 billion on building a string of state-of-the art warehouses throughout the US. 11.2 Electronic commerce logistics model 11.2.1 The general model for electronic commerce logistics This is to introduce a The Cutting-Edge Logistics Model – Synchronizing the Flows of Goods, Information and Funds. First, Global commerce marches on– $10B/day $10B/second. Second, nature of business is becoming more complex. So, Comprehensive model is needed to solve problems the approach is as follows: ▪ Utilize The UPS Store retail network for convenient drop-off of laptops ▪ Utilize UPS’s package delivery network for goods movement ▪ UPS Supply Chain Solutions handles parts management and technical repair Through it we can get the results: ▪ Eliminated multiple transportation steps and centralize parts and repairs. ▪ Saved millions of dollars by streamlining its service operations. ▪ Gained better inventory visibility. ▪ Gained valuable data about product performance. ▪ Achieved an edge in the fiercely competitive PC market. Another model is THE SUPPLY CHAIN LOGISTICS SIMULATION MODEL. The purpose of the Supply Chain Logistics Simulation Model is to provide macro level education and training for Supply Chain Logistics Management that is focused on Lean Enterprise concepts using a “Live” simulation model and interactive workshop approach. The model provides a platform for participants to view, and execute an operating supply chain enterprise from an integrated macro perspective encompassing suppliers, consolidators, manufacturing plants, distribution warehousing, transportation, and customers within a “Class Room” training environment. The Supply Chain Logistics workshop provides both lecture and hands-on Supply Chain Logistics model training to test new concepts and variables using “Design-Of-Experiment” techniques that focus on improving and optimizing the Lean Enterprise Supply Chain System. Workshop Supply Chain Logistics Model concepts and variables include: ▪ Lean Enterprise-wide integration (Marco perspective) ▪ Supplier Network ▪ Outsourcing and Consolidation Operations ▪ Lean Production Manufacturing Systems ▪ Distribution Warehousing Systems ▪ Acquisition and Consolidation of Manufacturing Plants ▪ Information Systems / E-Commerce / B-To-B Information, etc. ▪ Customer Fulfillment and Satisfaction A working model will be used in the demonstration. The model requires a work team of 15 individuals (minimum) who will supply, manufacture, transport, warehouse, distribute and ship products to the customer in a simulated supply chain geographic region. Simulated support functions will be included for: Demand Forecasting, Customer Order Entry, Production Planning
Manufacturing Execution, Just-In-Time Delivery, Transportation Planning, Supplier Integration and Information Processing. The model uses gaming boards, raw materials, components, quipment, and supply chain entity functions common to most supply chain logistics environments. The demonstration practices the concepts of supply chain optimization as the work team to implement various suggestions and ideas executed through various supply chain workshop simulations 11. 2. 2 the selection for our country's electronic commerce logistics Chinese E-Commerce is mostly business-to-consumer rather than business-to-businesses Although a majority(about 68%)of the 2,000 E-Commerce websites were B2C shopping sites online payment is still in its infancy in China due to low-level online security and an aversion for sing credit cards. Most of the E-Commerce websites operate on online ordering and cash on delivery. Characteristics of the E-Commerce websites in China include: I Online order and offline payment; only few major Online Advertising Electronic Commerce 2 players offer online payment I 24.7% operations of these sites were far from being an industry practice; I Prices did not undercut those of offline peers; I Fulfillment was a big problem For many Chinese domestic enterprises, Internet and Ecommerce are still new. The vast majority of domestic enterprises simply do not have the websites necessary for doing E-Commerce. In addition, a large number of multinational companies operating in China do not have mirror sites in the Mainland. In recognizing the problem, the government has introduced the Enterprise Go Internet Plan"to get more than 1 million enterprises online in 2000. Even if that goal is achieved, it may not be enough E-Commerce in China will still be dominated by B2C for at least two years 11.3 The technology for electronic commerce logistics Electronic Commerce(E-Commerce) is the ability to conduct business via electronic networks such as the Internet and the World wide Web. Although Electronic Commerce is based on the principles of Electronic Data Interchange(EDI) it goes far beyond EDI in that it aims at supporting the complete external business process, including the information stage(electronic marketing, networking), the negotiation stage(electronic markets), the fulfillment(order process, electronic payment) and the satisfaction stage(after sales support Emphasis these days are on business-to-business E-Commerce applications: taking orders, scheduling shipments, providing customer service and so on. However, present E-Commerce implementations automate only a small portion of the electronic transaction process. Moreover, E-Commerce is hampered by closed (self-contained) markets that cannot use each other's services incompatible frameworks that cannot interoperate or build upon each other, and a bewildering collection of security and payment protocols. In general, E-Commerce applications do not yet provide the robust transaction, messaging and data access services typical of contemporary client/server applications. While there is considerable interest in developing robust Internet applications, protection of significant investments in client/server technology and interoperation with mainframe transaction servers and legacy systems is a serious requirement. IT is essentially the merging of four separate groups of technologies: computing, telecommunications, broadcasting, and multimedia. The practitioner and much of the private sector normally call the point at which they overlap IT. International agencies, depending on their roots, often use other terms, such as informatics, ICT (Information and Computing Technology ), or IT and T (Information Technology and Telecommunications). There is no significant difference between these terms; IT is the most commonly used but the others are equally valid IT implicitly refers to the technologies themselves and to the professionals who deploy IT, either at manufacturer and vendor sites, or at user organizations. At the user site, IT systems are applied to the individual enterprise, which may be anything from a one-person business to the largest multinational organization Their systems are designed for their specific, internal use. On the other hand, EC3 systems are designed for inter-enterprise computing. EC enables any computer to"talk" to any other computer. More typically, EC refers to the business practices that now take place with the help of telecommunication networks, most notably the Internet, but also including Value Added Networks, Virtual Private Networks, Intranets, and Extranets To reiterate: IT is the generic set of technologies that are used to create efficiencies in individual organizations. They include computers, communications, and their attendant skills. EC requires the IT infrastructure as a starting point. It also utilizes sets of business procedures that
Manufacturing Execution, Just-In-Time Delivery, Transportation Planning, Supplier Integration and Information Processing. The model uses gaming boards, raw materials, components, equipment, and supply chain entity functions common to most supply chain logistics environments. The demonstration practices the concepts of supply chain optimization as the work team to implement various suggestions and ideas executed through various supply chain workshop simulations. 11.2.2 the selection for our country`s electronic commerce logistics Chinese E-Commerce is mostly business-to-consumer rather than business-to-businesses. Although a majority (about 68%) of the 2,000 E-Commerce websites were B2C shopping sites, online payment is still in its infancy in China due to low-level online security and an aversion for using credit cards.Most of the E-Commerce websites operate on online ordering and cash on delivery. Characteristics of the E-Commerce websites in China include: l Online order and offline payment; only few major Online Advertising Electronic Commerce 2 players offer online payment; l 24.7% operations of these sites were far from being an industry practice; l Prices did not undercut those of offline peers; l Fulfillment was a big problem For many Chinese domestic enterprises, Internet and Ecommerce are still new. The vast majority of domestic enterprises simply do not have the websites necessary for doing E-Commerce. In addition, a large number of multinational companies operating in China do not have mirror sites in the Mainland. In recognizing the problem, the government has introduced the ``Enterprise Go Internet Plan'' to get more than 1 million enterprises online in 2000. Even if that goal is achieved, it may not be enough. E-Commerce in China will still be dominated by B2C for at least two years. 11.3 The technology for electronic commerce logistics Electronic Commerce (E-Commerce) is the ability to conduct business via electronic networks such as the Internet and the World Wide Web. Although Electronic Commerce is based on the principles of Electronic Data Interchange (EDI) it goes far beyond EDI in that it aims at supporting the complete external business process, including the information stage (electronic marketing, networking), the negotiation stage (electronic markets), the fulfillment (order process, electronic payment) and the satisfaction stage (after sales support). Emphasis these days are on business-to-business E-Commerce applications: taking orders, scheduling shipments, providing customer service and so on. However, present E-Commerce implementations automate only a small portion of the electronic transaction process. Moreover, E-Commerce is hampered by closed (self-contained) markets that cannot use each other's services, incompatible frameworks that cannot interoperate or build upon each other, and a bewildering collection of security and payment protocols. In general, E-Commerce applications do not yet provide the robust transaction, messaging and data access services typical of contemporary client/server applications. While there is considerable interest in developing robust Internet applications, protection of significant investments in client/server technology and interoperation with mainframe transaction servers and legacy systems is a serious requirement. IT is essentially the merging of four separate groups of technologies: computing, telecommunications, broadcasting, and multimedia. The practitioner and much of the private sector normally call the point at which they overlap IT. International agencies, depending on their roots, often use other terms, such as informatics, ICT (Information and Computing Technology), or IT and T (Information Technology and Telecommunications). There is no significant difference between these terms; IT is the most commonly used but the others are equally valid. IT implicitly refers to the technologies themselves and to the professionals who deploy IT, either at manufacturer and vendor sites, or at user organizations. At the user site, IT systems are applied to the individual enterprise, which may be anything from a one-person business to the largest multinational organization. Their systems are designed for their specific, internal use. On the other hand, EC3 systems are designed for inter-enterprise computing. EC enables any computer to “talk” to any other computer. More typically, EC refers to the business practices that now take place with the help of telecommunication networks, most notably the Internet, but also including Value Added Networks, Virtual Private Networks, Intranets, and Extranets. To reiterate: IT is the generic set of technologies that are used to create efficiencies in individual organizations. They include computers, communications, and their attendant skills. EC requires the IT infrastructure as a starting point. It also utilizes sets of business procedures that
enable the IT systems in the supply chain to inter-operate with each other, that allow governments to participate in these types of processes, and that also allow individuals to participate. EC utilizes a range of inter-enterprise initiatives(business, industry, and government) that enable EC users to exchange information in standard formats so that the IT systems of any participant can recognize ne electronic information being exchanged. These standards initiatives include messages (standard invoices, customs declarations, etc. ) codes(product codes, bar codes, location codes. g airports and airlines, size and measurement codes, business practices, etc. tomatic identity technology such as scanning, wireless ID/transponders and GPS systems most of all. ec initiatives make possible JIT (ust-in-Time inventory control), QR Response retail replenishment ), ECR(Efficient Consumer Response for the supermarket industries), and a range of systems in which governments participate, such as trade facilitation for automating customs and port processes, electronic tax lodgment, and electronic government and governance In the context of small states, EC and IT can be deployed for these tasks, among others (1) Efficiencies of industry and government, leading to productivity improvements and economic growth. In particular, there are opportunities for improved macroeconomic management and introduction of practical public expenditure/budget management and monitoring systems (2) Participation in globalize industries, leading to process improvement, business development, industry diversification, and employment opportunities (3) Opportunities to perform high-value operations at lower costs than in developed countries, thereby transferring employment opportunities, since EC in particular makes geographical location irrelevant (4) Trade process reform, including ports and customs, technical controls(prohibitions and restrictions, government trade licensing and approvals, and other non-tariff barriers), trade professionals and traders. This can lead to increased trade efficiencies and the ability to handle smaller consignments more efficiently and more often. It can also lead to efficiencies and competitive advantages in transshipment, transit and free port or duty-free zone operations (5) Increased tax revenues due to increased economic activity and improved government efficiencies, including SOES, GBEs. The technologies can offer many other potential benefits, but even this first look illustrates that It and eC are no longer restricted to the big players. Properly planned and managed, they can be very effective in any environment They can induce and introduce efficiencies that may have been considered to be impractical before, they can introduce new revenue opportunities for both the public and the private sector, and they can generate new employment opportunities. But to make the most of the technologies, it is necessary to make adjustments to traditional ways of doing business, in both government and the private sector organizations 11.3. 1 The basic procedure for electronic commerce logistics Electronic commerce requires workflow support. Actually, electronic commerce has been around for many years in the form of Electronic Data Interchange(EDI). However, EDI is limited to business-to-business(B-to-B) commerce and is based on structured document formats(called transaction sets), which are transmitted over value-added networks. Electronic commerce over the Internet, or Internet commerce, has opened up new possibilities of business-to-consumer(B-to-C) commerce by obviating the need for value added networks. In the first step, the Internet serves as a router for communications between trading partners, but more importantly, in a broader sense it can lead to the creation of new types of value chains between partners. An electronic commerce application must also provide support for notification and negotiation. Parties must be able to negotiate before reaching a commitment, on price, delivery date, etc. Notification is another important feature. After a customer places an online trade, the broker should notify him or her as soon as the trade is executed rather than the customer checking the web site continuously to find out if the order has been executed. Similarly, a package delivery service such as Federal Express should notify the customer( both sender and receiver)as soon as a package is delivered at a site All these electronic commerce activities point to the importance of workflow automation as further exemplified in the next few subsections hanye t the enterprise level, the logistics agent interacts with the customer about an order. To this order, logistics has to decompose it into activities such as manufacturing assembly, transportation, etc. Then it negotiates the execution of these activities with the available plants
enable the IT systems in the supply chain to inter-operate with each other, that allow governments to participate in these types of processes, and that also allow individuals to participate. EC utilizes a range of inter-enterprise initiatives (business, industry, and government) that enable EC users to exchange information in standard formats so that the IT systems of any participant can recognize the electronic information being exchanged. These standards initiatives include messages (standard invoices, customs declarations, etc.), codes (product codes, bar codes, location codese. g. airports and airlines, size and measurement codes, business practices, etc.), and automatic identity technology such as scanning, wireless ID/transponders and GPS systems. But most of all, EC initiatives make possible JIT (Just-in-Time inventory control), QR (Quick Response retail replenishment), ECR (Efficient Consumer Response for the supermarket industries), and a range of systems in which governments participate, such as trade facilitation for automating customs and port processes, electronic tax lodgment, and electronic government and governance In the context of small states, EC and IT can be deployed for these tasks, among others: （1） Efficiencies of industry and government, leading to productivity improvements and economic growth. In particular, there are opportunities for improved macroeconomic management and introduction of practical public expenditure/budget management and monitoring systems. （2） Participation in globalize industries, leading to process improvement, business development, industry diversification, and employment opportunities. （3） Opportunities to perform high-value operations at lower costs than in developed countries, thereby transferring employment opportunities, since EC in particular makes geographical location irrelevant. （4） Trade process reform, including ports and customs, technical controls (prohibitions and restrictions, government trade licensing and approvals, and other non-tariff barriers), trade professionals and traders. This can lead to increased trade efficiencies and the ability to handle smaller consignments more efficiently and more often. It can also lead to efficiencies and competitive advantages in transshipment, transit and free port or duty-free zone operations. （5） Increased tax revenues due to increased economic activity and improved government efficiencies, including SOEs, GBEs. The technologies can offer many other potential benefits, but even this first look illustrates that IT and EC are no longer restricted to the big players. Properly planned and managed, they can be very effective in any environment. They can induce and introduce efficiencies that may have been considered to be impractical before, they can introduce new revenue opportunities for both the public and the private sector, and they can generate new employment opportunities. But to make the most of the technologies, it is necessary to make adjustments to traditional ways of doing business, in both government and the private sector organizations. 11.3.1 The basic procedure for electronic commerce logistics Electronic commerce requires workflow support. Actually, electronic commerce has been around for many years in the form of Electronic Data Interchange (EDI) . However, EDI is limited to business-to-business (B-to-B) commerce and is based on structured document formats (called transaction sets), which are transmitted over value-added networks. Electronic commerce over the Internet, or Internet commerce, has opened up new possibilities of business-to-consumer (B-to-C) commerce by obviating the need for value added networks. In the first step, the Internet serves as a router for communications between trading partners, but more importantly, in a broader sense it can lead to the creation of new types of value chains between partners. An electronic commerce application must also provide support for notification and negotiation. Parties must be able to negotiate before reaching a commitment, on price, delivery date, etc. Notification is another important feature. After a customer places an online trade, the broker should notify him or her as soon as the trade is executed rather than the customer checking the web site continuously to find out if the order has been executed. Similarly, a package delivery service such as Federal Express should notify the customer (both sender and receiver) as soon as a package is delivered at a site. All these electronic commerce activities point to the importance of workflow automation as further exemplified in the next few subsections. At the enterprise level, the logistics agent interacts with the customer about an order. To handle this order, logistics has to decompose it into activities such as manufacturing, assembly, transportation, etc. Then it negotiates the execution of these activities with the available plants