Logistics & Supply Chain Management ( all inclusive)
FHNW BIT Logistic & supply chain management
FHNW BIT Logistic & supply chain management
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Flashcards
What can barcodes and RFID (Radio-Frequency-Identification) be used for?
GS1 is a standard which defines how each product id is build. The barcode defines a product and information about this specific product is accessible over the barcode number. It is important that different ids are created so the seller can order the right item from the supplier.
Barcodes and RFID are used to keep digital track over each ingoing and outgoing item. With the help all steps in the supply chain can see what demand is there or which actions are needed . E.g. with washing of towels for hotel.
What does the abbreviation GTIN stand for?
Global trade item number. E.g. barcode number, each product has a unique id.
What does one understand under Customer Relationship Management (CRM)?
A tool overlook the whole company and the contact with all the customers.
What are the goals of CRM?
To give a fast, understanding and simple overview over a customer. With the help of a CRM transactions, requests and prior discussions can be looked at and all the employees can respond to a customer with the same detailed background. Everyone has all the information needed to support a customer.
Which advantages does CRM provide for a company?
The advantage of a CRM is that all employees have the information, and history of a customer and can support them over different steps.
All transactions, mails, meetings, phone calls, requests, order, problems are listed and all employees have access to it and update this when this specific customer needs something new or requests it. Everything gets traceable and transparent
What is the area of activity called sales side? And what are the central questions
The area of activity "sales side" refers to the value created by and in the interaction with customers. Central questions are:
- What value contribution can we make by strategically aligning ourselves with our customers' business models?
- How can we best add value to our customers?
- Which customer developments regarding digitalization and innovation have an impact on your own company?
- What value do our products and services add to customers' products and services?
- Where can we support customers with digital data exchange?
- Where and how do we have to integrate customers into logistics?
Customers are increasingly using digital technologies for the procurement of products and services. In the business-to-consumer sector in particular, the shift from physical (brick and mortar) stores to online shops is still in progress, and many new service-driven businesses are evolving fast. You need to understand...
- which drivers there are in this structural change.
- how these online trends can change the processes and organization of companies.
- which aspects of online trading need to be considered and which measures can be derived from them.
Define e-Commerce
Definition of the Institute for Information Systems, FHNW
- «E-Commerce is the support of a company's relationships and processes with its customers through networked information technology. E-Commerce can involve one or more transaction phases». (Wölfle, 2016, p. 12)
Definition of the Federal Statistical Office, BfS
- «Here, E-Commerce is understood to mean transactions processed via the Internet or other computer aided networks (e.g. EDI). Goods/services are ordered via such networks; payments and deliveries can be made online or by conventional means. (Orders by handwritten e-mails do not fall under ECommerce.)» (Bundesamt für Statistik, 2018)
Note: Cross-channel scenarios are partially disregarded in the definition from BfS, e.g. searching the internet, ordering at the point of sale and then having items delivered to your home.
What market data on e-commerce is ther in Switzerland?
No accurate overall market data is available.
- Market data is the statistics are often based upon different sources and estimates.
- How current the market data are vaies; the most recently published data from the BfS is, in part, from 2019 and last updated in 2019.
- Some data are slightly contratictory, but similar trends can be identified.
Different aspects are the focus of different data sources:
- Federal statistical office(BfS): puchacing of goods and services by households( B2C)
- Swiss mail order association(VSV): physical product in B2C
- Carpathia: online shops and electronic marketplaces for B2C, B2B and C2C, products and services (e.g. travel)
Name different types of provider in e-commerce with online shops and marketplaces.
Many providers focus primarily on B2C
- Pure onine provider (pure player): e.g. amazon in europe
- Mail-order company print catalogue and online shop: e.g. La Redoute, Otto
- Stationary dealers with onine sales, e.g. coop@home, Fust
- Multi-channel providers with cross-channel services: e.g. Digitec, Manor , Würth (B2B)
- Manufacturer with online direct sales: e.g. Nespresso
- Electronic marketplace: e.g. ricardo. Auto24 (B2C and C2C)
- Flash-sale providers (limited offers): e.g.g DeinDeal
Why is E-Commerce important?
B2C e-commerce revenues are rising year on year, while traditional sales channels are stagnating in most industries. The share of e-commerce in total retail sales (B2C) is still low (about 10 %), but there are large differences between product segments (non-food at 16.4 %, food at 2.5 %). E-commerce is causing major upheavals in some sectors (e.g. clothing, travel). Including automated electronic business transactions between companies, the volume of e-commerce between companies (B2B) is much higher than that with private households (B2C).
Which phase is the most difficult one in e-commerge when looking at the transaction process in e-commerce?
What is the difficulty?
What are questions that an e-commerce provider must ask itself during the stimulation phase?
Initial situation: The customer still has a passive attitude towards a purchase.
- How can access to potential customers be created?
- How and where does the demand arise?
- What is the actual need?
- How is the potential customer using the Internet at the moment that his or her demand emerges?
- Where are wishes triggered?
- Who are the customer's influencers?
- How can I differentiate myself from competitors in this phase?
How do you find access to potential customers?
Online (mostly based upon content or user profile)
- Engaging customers with a topic
- Blogs, Influencers (YouTube, Instagram)
- Communities and discussion forums (to contribute thematically as a company)
- Affiliate marketing (linking to an online shop for a commission, see following slide)
- Engaging customers while surfing the web
- Banner advertising matching the content of the website (Google, Facebook)
- Viral brand marketing via social media (see the slide after next)
- Offline (mostly advertising)
- Advertisements in daily newspapers, radio and television
- Poster advertising, flyers, brochures, etc.
- Advertisements or supplements in trade publications (reduced distribution)
Which phase is the most rewarding phase in e-commerce?
Information phase
What are questions that an e-commerce provider must ask itself during the information phase?
Initial situation: potential customers are currently acively interested in a specific product or offer.
- How does the customer inform himself or herself?
- What information do customers need to make a purchase decision?
- What makes a purchase pleasant for him or her, what makes it fun?
- How can expensive, time-consuming and difficult information processes be avoided?
Suppose you want to buy yourself something new. What do you do, if you would like to inform yourself about products and services? Where do you begin your search for information?
- Google product
- Check Reviews and experiences of other users
- Maybe ask friends - depending on what you want to get
- Compare prices online
What do you know about Cross-Channel information distribution?
The search for information must not begin in the online shop.
38.5% of purchases in stationary retail business offices are preceded by a search for information in online shops. These purchases accoutn for 40.3% of turnover.
Search engines: suppliers can also present themselves in search engines with their offers.
SEA = Search Engine Advertising: Paid serach results using keywords.
SEO = Search Engine Optimization (SEO): Organic search result via website metadata (optimization of ranking)
Electronic Marketplaces
Comparison portals: Data integration to current offers and availabilities necessary.
Vendor evaluation
- Price
- Service
- Payment methods
- Availability
- Price alarms
You can filter product based upon characteristics, price, availability, etc. makes finding the product easier.
High demands on the provision of information:
- Actuality: availability, prices, new offerings
- Data preparation: product descriptions, images and categories, multi-language
- Integration: internal and external systems (production, warehouse and logistics systems, elecronic marketplaces, etc. )
What is SEA and SEO?
Search engines: suppliers can also present themselves in search engines with their offers.
SEA = Search Engine Advertising: Paid serach results using keywords.
SEO = Search Engine Optimization (SEO): Organic search result via website metadata (optimization of ranking)
When addBlocker is activated in Browser customers only see SEO search results.
SEO hase suitable metadata favor a better ranking in the search results.
Which phase is the most underrated in e-commerce?
The aggeement phase is the most underrated in e-commerce.
What questions does an E-commerce provider must ask themself during the agreement phase?
Initial situation: Potential customers are convinced about the product or service and would like to buy it.
- How can the checkout process be made simple, transparent, fast and secure?
- Which payment options must be offered to the customer?
- Which delivery options and deadlines should be offered to the customer?
- Are the terms and conditions clear and accepted by the customer (cancellation conditions and guarantees)?
- Should a hotline be offered for questions and problems?
- Has up-selling and cross-selling been considered?
- Can products and services be configured?
Describe Active Selling in E-Commerce
- Up-selling
- Automatically suggests the uer, when selecting an item, to choose a similar product with a higher margin
- Cross-selling
- Complementary goods and recommended for the product in which the customer is currently interested,
- Cross-referencing
- Directs the customer to other produtcts or product groups within the electronic catalog by means of cross-references
Name different payment methods in e-commerce
- Traditional methods of payment, in particular purchase on account and credit card, have so far predominated among means of payment.
- For most providers, purchase on account is preceded by an assessment of creditworthiness.
- The credit risks for merchants in e-commerce are high.
Offline-type payments
- Invoice
- Cash on delivery
- Prepayment (bank transfer)
- Debit cards (Maestro Card, PostFinance Card)
- Direct debit (rare in Switzerland)
Online-type payments
- Integration to a Payment Service Provider necessary
- Credit cards (off- and online)
- Collection systems (e.g. PayPal)
- E-banking and billing systems
What questions does an e-commerce provider must ask themselfes in the settlement phase?
The settlement phase is the phase where the money is made
Initial situation: The customers have submitted a binding purchase order.
- Is the payment procedure clear for the customer? (If the payment was not already made during the agreement phase.)
- What information must the order confirmation contain for the customer?
- How can the customer cancel his order?
- How must the delivery and transfer of ownership take place?
- Can the customer be offered the possibility to change the time and place of delivery?
- How can the customer find out about the progress and status of the order (Track & Trace)?
- How must returns management be carried out?
Compare Stationary business vs. Online shop for fulfilment in B2C e-commerce
Fulfilment is the completion of a purchase transaction and, as such, falls into the fulfilment phase of business transactions.
Stationary
- –Customer comes to shop
- Customer adheres to the shop’s opening hours
- Customer gathers the (available) goods
- Customer queues at the check out (cash register)
- Customer pays immediately
- Customer brings back empty bottles, goods to exchange and complaints
Online
- Goods are delivered to the customer
- Customers can only be found in individual time slots
- Retailer picked (availability critical)
- Payment function must be available immediately
- Retailer bears risks and costs of online payment
- Retailer must process returns and refund payments, where necessary
What is cross-docking?
Cross-docking: consumption-oriented goods distribution
- With cross-docking, stocks in the retail chain are minimized, shipments are picked for each customer and, at the same time, high bundling effects / truck utilization are achieved
- Three types of cross docking exist:
- Direct: complete pallets or displays are transshiped as delivered
- Singe-stage: goods are delivered pre-picked (e.g. for a specific Coop store) and transshipped
- Two-stage (see figure): goods are delivered in full pallets, picked and delivered according to customer specifications
Give an example of cross-docking in e-fulfilment: orders from the EU with MSDirect
- Customer order
- Customers order items via the online shop or marketplace
- Pick & pack
- Articles are picked in the warehouse and prepared for dispatch
- Group transport
- Bundling several shipments for transport, collection several times a week
- Export from the EU
- Digital customs clearance, export without wasting time
- Import switzerland
- Digital collective customs clearance in transit at the internal customs office
- Last mile carrier
- Feeding itno a local parcel center for delivery to the receiving location
- Parcel delivery
- At the recipient in Switzerland within 48 hours
How do system service provider support fulfilment in e-commerce?
- Platform services: online shop to complete ERP system: master data, merchandise management, accounts receivable management, interfaces to business partners
- Payment services: payment processing, credit checks, debt collection
- Logistics services: stock management, track & trace, national and international shipping
What are critical success factzors for logistics in e-commerce?
- Availability of goods offered (direct correlation between delivery time and return rate)
- Total logistics costs (warehouse and distribution)
- Last mile as well as the delivery location and time
- Handling of retruns( returns are a big cost factor)
In the media one reads over and over again, that returns from providers go directly into the garbage and/or into recycling. What can be the reasons for disposing these products?
- Cosmetics.
- Legal reasons, they are held accountable when the product was tempted with.
- Throwing away is cheaper
- Original package is damaged, you cannot resell it. Cost of repackaging is enormous.
- You want the exclusive offer. When you want to buy new then you do not want something that someone else already has send back.
What questions do e-commerce provider must ask themself during the loyalty phase?
Loyalty phase = "free style in e-commerce"
Initial situation: The purchase transaction has been completed, ownership has been transferred, the purchase has been paid for.
- How can the knowledge about the customer be translated into new offers?
- How can the customer simply place repeat orders?
- How can the sale of accessories and consumables be supported?
- Which customer loyalty instruments can be developed and used? (e.g. bonus program, delivery subscription)
- Which service should be offered to the customer? (e.g. support, FAQ, complaints)
- How can the customer provide feedback on their satisfaction?
Define CRM
Customer Relationship management (CRM)
«Customer Relationship Management means the planning, control and monitoring of all measures aimed at current and potential market partners with the aim of "intensifying customer relations". (Werner, 2017, p. 159) The goals are ongoing control and increasing factors such as: :
- customer satisfaction
- customer loyalty
- customer acquisition
CRM brings about a change from pure transaction marketing to real relationship marketing.
e.g (note shown is more from a marketing perspective and less from a transactional perspective)
What can be challenges that companies have to tackle in e-commerce?
- Challenges are to change the mindset from being a "selling" company to be a "technical" company. Just the switch from traditional to electronic background
- Positioning and execution. How do you want to be known and what do you want to do by yourself and what do you want to have done by suppliers in a good quality, and timely
- Customer loyalty is a challenge. Over the internet it becomes inpersonal. And it is hard to get loyalty over the internet.
- How can you satisfy your customer. Predict what the customer wants before they know it without talking to them.
- Connect customers to the product, make sure you speak the language of your customer to keep them on the page and keep them engage, learn from them
- Returns and logistics are challenging, consumer behavior changed. Customer want free returns. Box sizes are shrinking but delivery costs are rising.
- Complexity from all levels. All levels need to be efficient and it still needs to be an experience for the customer.
- Build up smart processes
- A challenge is to keep up with the market. The speed of market changes and possibilities to make as a company has increased. It is challenging to make the right decisions.
- Choose the right business model and have the platform in place
How can technologies in e-commerce offer added value for customers?
With AI in e-commerce a company can better predict what the future customers are looking for and plan accordingly
What is an online payment solution and what are possible risks?
A online payment solution offers your customers every payment option they desire
Risks are
- Fraud attack, stop unwanted orders and organized scammers, recognize good customers
- Payment default from customer.
What is a payment gateway and what is it used for?
A payment gateway is a software application that payment service providers (PSP) use to provide process payments for online purchases. It akts as an interface between the merchants web site and the PSP bank called acquirer (acquiring bank of psp).
A payment gateway can be used for multiple payment methods. The gateway encripts sensitive payment information and ensures security for the transaction between the customer, the merchant and the bank.
Once a customer inserts their card information, the gateway sends the infors to a bank to confirm it. Once payment confirmed the gateway sends back the approval of the transaction back to the merchant website.
What is fulfilment and what are the approaches?
Fulfillment includes all the steps to satisfy your customer.
There are three different approaches
- Dropship fulfillment model you market goods which are stored at another facility. This is a good option for resellers who do not have their own unique product. So all you need to do is the marketing, storage and facilitation of product is done by others.
- Self fulfillment model you run the entire shipping process in-house. You manufacture the product, store it in your warehouse and package and ship every order. Typically used by large scale companies. It cuts out the middle man and gives you power over all the processes
- The third party logistics model (3pl) you either manufacture your goods in bulk before an order is made, rather than shipping them yourself you store them at a third-party fulfillment center. Every time a customer buys an item your 3pl partner ships it out.