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Sustainable E-commerce, Supply Chains and Logistics

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Based on the booming E-commerce, logistics and supply chain management (LSCM) has been
greatly influenced when we are now already overwhelmed by its successes in both developed
and emerging economies. In the Ecommerce LSCM, there are two major types of business
models. They are business to consumer (B2C) and business to business. In B2C model, business
website is a place where all the transactions take place between a business organization and
consumer directly. B2B refers to a situation where one business makes a commercial
transaction with another, thus, the transaction volume of B2B is much higher than the volume
of B2C. In a typical supply chain there will be many B2B transactions involving sub components
or raw materials, and only one B2C transaction, specifically sale of the finished product to the
end customer. The modern logistics have become the most important means to improve the
efficiency of material flow, reduce distribution costs in various industries; at the same time, the
recent development of E-commerce also contributed to the expansion of the logistics market,
promote the development of technologies related to logistics. Large numbers of practices have
been carried out in the E-commerce logistics. In order to figure out current movement of E-
commerce logistics, this paper gives a comprehensive state-of-the-art review of E-commerce
logistics in supply chain management from a practice perspective so as to get the lessons and
insights from various practices for guiding future implementations (Yu et al., 2016) .
In the COVID-19 pandemic, during the social isolation and lockdown measures, urban mobility
transport and the distribution of products presented a substantial change, representing an
unsustainable development of the urban environment. Consequently, some market
development dynamics have changed permanently over recent years, with online shopping
becoming more popular among city dwellers, including the purchase of fresh food and other
perishable products through e-commerce platforms. It has been promoted, in part, by the
increase in urbanization and the need for supplies and provisions in cities, the increase in e-
commerce, and the appearance of new forms of purchase and consumption habits that
increase the purchases of products online, making goods travel and be delivered in cities
around the world. E-commerce can be understood as the online purchase and sale of goods or services through the Internet, either business-to-business (B2B), consumer-to-consumer (C2C),
or business-to-consumer (B2C). Compared to purchases in physical stores, e-commerce and
home deliveries tend to generate positive consumer perceptions regarding environmental
impact by reducing consumer transportation and reducing flows of non-sold items between
warehouses and physical stores.
However, E-commerce activities can lead to environmental impacts from packaging, labels,
transportation, energy consumption, and information flow that generate carbon emissions and
costs. Likewise, last-mile logistics in e-commerce is related to travel time and distance savings
to reduce fuel consumption, waiting time, energy consumption, and the use of vehicles,
alternative energy sources, and CO2 emissions. In addition to the environmental impact, e-
commerce last-mile logistics impacts the economic and social dimensions of sustainability,
which implies natural resources, the economy, and life quality improvement and preservation.
Therefore, e-commerce can improve the efficiency of commerce, reduce information collection
costs and purchase prices for consumers, and offer cost savings and discounts compared to
traditional channels, positively affecting sustainable consumption during pandemic periods
(Cano et al., 2022) .

Logistics …

There are many types of logistics. The most well-known type is sales logistics that moves
products from the producer to the consumer. In addition, there are a number of other types of
logistics, such as procurement logistics which is the flow of raw materials and parts, production
logistics which is the flow of materials inside a factory or business, recovery logistics which is
the return flow of returns from consumers and waste, and recycling logistics which is the flow
of recyclable materials. Logistics can be split into five types by field: procurement logistics,
production logistics, sales logistics, recovery logistics, and recycling logistics.

Types of Logistics …

  • Procurement Logistics: Procuring Raw Materials and Parts

Procurement logistics is the flow of goods when the raw materials and parts necessary for manufacturing are procured from suppliers. This field did not attract much attention before, but now that small-lot production of a variety of models is the main type of production, many firms are actively pursuing production by procuring the necessary materials in only the necessary amounts at the necessary times because it is directly connected to reducing inventory costs.

  • Production Logistics: Materials Management, Distribution in Factories, Product Management, Shipping

Production logistics is the flow of goods that includes the management of procured parts and materials, distribution inside a factory, product management, packaging, and shipping to warehouse. Delivery management, warehouse dispatch management, and shipping management can be optimized and the state of delivery vehicles can be managed by smoothly linking procurement logistics and sales logistics described later.

  • Sales Logistics: Delivery from Warehouse to Wholesalers, Retailers, and Consumers

Logistics typically refers to sales logistics. In the past this was mainly delivery from delivery centers and logistics warehouses to distribution points such as wholesalers and retailers. But now direct delivery also makes up a large amount of this volume due to online shopping and e-commerce. Whether delivery through delivery centers and logistics warehouses or direct delivery from production sites, higher efficiency in transportation and delivery and shrinking inventory are indispensable for delivering the necessary goods to the necessary people in the necessary quantities at the necessary time. This also contributes to improving customer satisfaction.

  • Recovery Logistics: Recovering and Recycling Products, Containers, and Packaging

If the flow of goods from production to consumption by procurement logistics, production logistics, and sales logistics is described using the circulatory system of the body, it would be said to be forward logistics. On the other hand, recovery logistics or reverse logistics is the flow that recovers and recycles products, containers, and packaging that have fulfilled their role.

  • Recycling Logistics: Recovering and Recycling Recyclable Products and Containers

Typical examples of recycling logistics are recovering and recycling empty cans, plastic bottles, and old paper. Containers, packaging, old computers, and inkjet cartridges can also be recovered and recycled in the same manner. The importance of recycling logistics has been increasing in recent years as measures for the environment and to effectively utilize materials such as minor metals (Keyence, 2019).

Logistics activities are an integral part of the supply chain process, performing various functions such as customs clearance, trade and transportation infrastructure, international shipments, logistics competence, tracking and tracing consignments, and meeting delivery deadlines (Zaman et al., 2022).

Supply Chain …

Supply chains in organizations are constantly challenged by risks, uncertainties and market vulnerability, threatening their performance. Thus, the level of interruption is high, causing a high range of consequences, including human and financial losses. Economic and/or natural interruptions have become increasingly frequent, implying negative effects on supply chain operations. Disruption can arise in various forms, from the operational to the strategic level, including accidents or equipment failure, delays and obstacles in production, natural hazards and pandemics. Thus, companies are increasingly looking for ways to adopt more reliable strategies for risk management in their supply chains. The goal is to manage the external or internal interruptions in the supply chain more effectively and consistently. In this context, the supply chain is considered to be a dynamic and complex organism. The complexities of a supply chain arise mainly from its risk. The increasing uncertainty of the environment and the development of global supply chains require companies to adjust their standards in terms of logistics management. Companies, regardless of their environment, want to maintain continuity of supply in terms of material flows while optimizing cost reduction. Thus, companies want to build a resilient supply chain system to make it seamless. Supply chain resilience is defined as the capability to proactively design and plan the supply chain network, anticipating unexpected disruptive (negative) events in order to respond adaptively to disruptions. For a company to have resilience in its supply chain, it must maintain control of the entire logistics process (Lopes et al., 2022).

E-Commerce …

During the development of the e-commerce era, the logistics business is one of the determining factors for its success. The logistics business is classified as one of the executants whose plans are to implement, control, and store business products: goods, services, and all kinds of related information from the point of supply to the point of demand can meet customer demands. Logistics service quality is an important element in trading marketing to create customer satisfaction. Among the most logistics services, third-party logistics (3PL) is the unit that frequently interacts with the customer. Third-party logistics penetrates the business of various basic logistics activities, such as last-mile delivery of goods to the customer. Last-mile delivery refers to the final set of activities in a delivery cycle, activities and deliveries from the warehouses to the house, and the final drop. The objective key of a qualified last-mile delivery service is to have loyal customers and fulfill their customer satisfaction. Hence, logistics service providers need to show their consideration for the quality provided (Restuputri et al., 2022).

E-commerce technology provides information visibility throughout the supply chain. The fast pace needed to operate in the e-commerce environment and access to new markets have impacted traditional market structures. As companies expand into new markets, they begin to work with traditional competitors and compete with suppliers and customers. Companies have to learn to manage the conflict that is created when this occurs. New competitors are materializing, from new intermediaries entering the market to existing supply chain members taking advantage of new opportunities to reach customers (Golicic et al., 2002).

The relationship between logistics performance and Ecommerce customer loyalty is much closer in E-commerce business than in any other industries. Ecommerce orders are always small but the shipment of these orders is rather complex, so the scope requirement for the role of logistics is much larger, and the logistics service is directly provided to the final customer who always has high expectation on the logistics service level and company’s logistics capacity has significant and positive effects on logistics performance in E-commerce market.

Future technologies for supporting E-commerce include three future perspectives: Internet of Things (IoT), Big Data Analytics, and Cloud Computing. These technologies may be able to upgrade and transform the E-commerce logistics into a wider implementation not only for giant corporations, but also for small and medium-sized enterprises (SMEs) to get the benefits from E-commerce era. IoT is a smart network of physical objects, devices, vehicles, architectures, and other items that are embedded with sensors so that these objects could communicate and exchange data within an intelligent environment. After using vast number of digital devices in E-commerce logistics, huge number of data will be created. The large number of data from E-commerce logistics may carry rich knowledge which could be used for supporting advanced decision-makings for various enterprises. Thus, Big Data Analytics is another future perspective to lift Ecommerce logistics (Yu et al., 2016).

References

Cano, J. A., Londoño-Pineda, A., & Rodas, C. (2022). Sustainable Logistics for E-Commerce: A Literature Review and Bibliometric Analysis. Sustainability (Switzerland), 14(19). https://doi.org/10.3390/su141912247

Golicic, S. L., Davis, D. F., McCarthy, T. M., & Mentzer, J. T. (2002). The impact of e-commerce on supply chain relationships. International Journal of Physical Distribution and Logistics Management, 32(10), 851–871. https://doi.org/10.1108/09600030210455447

Keyence. (2019). Barcode Solutions for Logistics Logistics Knowledge and Cases Studies to Increase Efficiency. 1–60. https://www.mhi.org/media/members/15128/132346534324205455.pdf

Lopes, J. M., Gomes, S., & Mané, L. (2022). Developing Knowledge of Supply Chain Resilience in Less-Developed Countries in the Pandemic Age. Logistics, 6(1). https://doi.org/10.3390/logistics6010003

Restuputri, D. P., Fridawati, A., & Masudin, I. (2022). Customer Perception on Last-Mile Delivery Services Using Kansei Engineering and Conjoint Analysis: A Case Study of Indonesian Logistics Providers. Logistics, 6(2). https://doi.org/10.3390/logistics6020029

Yu, Y., Wang, X., Zhong, R. Y., & Huang, G. Q. (2016). E-commerce Logistics in Supply Chain Management : Practice Perspective. Procedia CIRP, 52, 179–185. https://doi.org/10.1016/j.procir.2016.08.002

Zaman, K., Anser, M. K., Awan, U., Handayani, W., Salamun, H., Abdul Aziz, A. R., Jabor, M. K., & Subari, K. (2022). Transportation-Induced Carbon Emissions Jeopardize Healthcare Logistics Sustainability: Toward a Healthier Today and a Better Tomorrow. Logistics, 6(2), 1–17. https://doi.org/10.3390/logistics6020027

Diluka Bandara
Diluka Bandara
senior student, Rajarata university of Sri Lanka

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