Supply Chain and Logistics Management Challenges and Solutions in E-Commerce

Running Head: SUPPLY CHAIN AND LOGISTICS MANAGEMENT
Supply Chain and Logistics Management

SUPPLY CHAIN AND LOGISTICS MANAGEMENT 1
Contents
Introduction......................................................................................................................................2
Supply Chain Challenges in the Context of E- Commerce.............................................................2
Solutions to the Supply Chain Management Challenges in the Context of E- Commerce.............7
Conclusion.......................................................................................................................................9
Recommendations............................................................................................................................9
References......................................................................................................................................11

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Introduction
A supply chain can be defined as a system of people, organizations, information, activities, and
resources which are involved in the process of transferring a product or service from supplier to
customer. These supply chain activities are involved in the task of transforming the raw
materials, natural resources and components into the finished product which is ultimately
delivered to the end user. The term supply chain management can be defined as the broad range
of activities which are needed for planning, controlling and executing the flow of a product from
acquiring raw materials to distribution of the product to final customer, in a most rationalized
and cost- effective way possible (Christopher, 2016). This report is focused on the supply chain
management challenges and solutions in the context of e- commerce. At the end of this report,
some recommendations have also been made which can be taken into consideration for the
purpose of tackling those challenges.
Supply Chain Challenges in the Context of E- Commerce
E- Commerce, also known as electronic commerce, can be regarded as the purchasing and sales
of products and services along with the transfer of data and money for the execution of these
transactions through the use of internet (Li, Chi, Hao and Yu, 2018). This term is often utilized
for the purpose of referring to the sale of physical products online or it can be described as the
commercial transaction which is facilitated through the use of internet. In case of e- commerce,
logistics also play a significant role. Logistics management is a part of supply chain management
and is a narrow concept. On the other hand, supply chain management is a broad concept.
Logistics ensure the management of products and resources at the time when they are storage
and transit. In the context of e- commerce ventures, logistics can be regarded as the processes of
transporting an inventory to a merchant or shipping order to the customers. A track of the goods
is kept by the logistics processes till the point of their delivery.
There are a number of supply chain challenges faced in the case of e- commerce.
Difficulty to Localize in the Global Economy- In the earlier days, the businesses used to target
only specific markets. Nowadays, the e- commerce companies possess the capability of quickly
expanding into new geographies with the help of their strong supply chain network. E-

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commerce have assisted the businesses in diminishing the traditional boundaries and allows them
to easily reach the customers across the globe. In other words, critical supply chain management
challenges are presented by globalization in the context of e- commerce. For the purpose of
reducing the costs across the supply chain, e-commerce businesses often plan to move their
manufacturing operations to different countries where there are low taxes, lower labor costs and
lower costs of transport for raw materials. Furthermore, the e- commerce businesses are also
required to make a significant change in their supply chain in order to adapt their products to
various cultures and preferences (Monczka, Handfield, Giunipero and Patterson, 2015). Due to
this, they suffer from the risk of losing control, proper management over inventory and visibility
and therefore require the management of diverse structures of data across different geographies
in an effective manner. This is where difficulties is faced by the businesses in case of e-
commerce supply chain due to the number of economic barriers, taxes, cross border government
policies and so on. For example, various suppliers in Europe and North America still utilize EDI
(Electronic Data Interchange) as a source of communication. However, with the advancement in
technology the suppliers in the emerging markets should skip EDI altogether and switch to
modern API (Application Programming Interface) driven approach (Mangan, Lalwani and
Lalwani, 2016).
Difficulty in Retention of Customers- In case of the offline businesses, the businessman
establishes a face to face interaction with the customers and therefore, has a realistic chance for
the creation of an impact on the buying behavior of the customer. However, the case of e-
commerce is completely different. In this case, the customer is at the far end of the selling cycle.
Therefore, a genuine effort is required for the fulfillment of the customer expectations so that the
customer knocks the door again. Also, in case of offline businesses, the product is instantly
available to the customer and usually there are no delays in the delivery of the product. However,
the e- commerce businesses take minimum of 2-3 days for delivering the products to the
customers due to which there are chances that the customers might switch to some other options.
The only solution for this supply chain challenge is making efforts for the differentiation of the
brand with the help of unique positioning (Waters and Rinsler, 2014).
For example, the e- commerce platforms suffer from the major issue of timely delivery of the
products which depends upon infrastructure, location and unavoidable hassles during transmits