E-BUSINESS IN PRACICE

E-BUSINESS AND THE SUPPLY CHAIN

NAME: KASARI MISHRA

REG NO: 201919011
E-Business and supply chain management

Introduction
E-Business has emerged as a key enabler to drive supply chain integration. Businesses can use
the Internet to gain global visibility across their extended network of trading partners and help
them respond quickly to changing customer demand captured over the Internet. The impact of e-
business on supply chain integration can be described along the dimensions of information
integration, synchronized planning, coordinated workflow, and new business models. As a result,
many of the core supply chain principles and concepts can now be put into practice much more
effectively using e-business. Significant value can be created by e-business enabled supply chain
integration.

Supply Chain Management in E-commerce

E-commerce is about selling and buying goods over the internet and the movement of goods
between two parties. The dispatch of right quantity products at the right time to the right person is
essential and hence efficient supply chain is required. A quick, uninterrupted and secure supply
chain is a critical aspect of the e-commerce business. Efficient supply chain management in e-
commerce can reduce costs and enhance cash utilization. When a customer purchases a product
from an e-commerce website, he/she wants the product in a short time. New e-commerce websites
are evolving every day.  But, customers prefer only those sites that have an efficient supply chain to
deliver the right products at the right time. 

THE KEY BENEFITS OF SCM IN E-COMMERCE INCLUDE

 Reduced Costs
SCM in e-commerce removes various stages of distribution, retailers, and outlets. The elimination of
these stages reduces the overall cost of products. The reduced costs give customers a direct
advantage when compared to the cost of products available in physical stores.

Trade Globally
SCM enables e-commerce businesses to trade globally. An efficient SCM enables e-commerce
businesses to import raw material from anywhere and export their finished product to any country
easily.

Enhanced Customer Satisfaction

Customer satisfaction is an important factor for the success of an e-commerce business. With an
efficient supply chain management in e-commerce, enterprises can easily track demand, the time
suppliers will require to fulfill the orders and order goods from suppliers to keep the inventories
replenished. 

The Supply Chain Management Concept

A supply chain is a bidirectional flow of information, products and money between the initial
suppliers and final customers through different organizations .It can be both internal and external
in its nature. In an internal context, the elements of a SC are represented by various intra-
organisational functions (such as for example sales and marketing, procurement, production
planning, warehouse and transport management), whereas the external supply chain further
encompasses movements of material, information and funds between companies and their
suppliers, customers and various business partners.

Information Flows and Supply Chain Integration

The sharing of information is a critical success factor if seamless product and money flows between
initial suppliers and end-consumers in the ‘macro’ (or external) supply chain, as well as in the
‘micro’ (or internal) supply chain between different intra-organisational functions, is to be
achieved. An inefficiency anywhere in the chain, be it internal or external in nature, will result in
the chain as a whole failing to maximise its true competitive potential.

The supply chain into a network facilitated by Internet technologies. Overall, e-business solutions
in general are seeking to enhance supply chain effectiveness and efficiency through the automation
of business processes. The adoption of e-business can result in benefits such as higher
transparency, reduced transaction, manufacturing and other costs, reduced unmonitored corporate
E-business may also:

 Facilitate collaboration and supply chain information sharing, such as order forecasts and
inventory planning;
 Automate requisition and purchase order creation and integrate payment processes; and,
 Help organizations develop plans for the more effective management of sourcing and
logistics.

Electronic linkages in the supply chain can change the nature of inter-organisational relationships.
However, they should ideally enable the sharing of resources and core competencies and the
synchronisation of working processes between external partners in virtual network organizations.
There is a wide diversity of e-business tools and services.

The following sections highlight some of the aspects and tools of e-business as they impact SCM.

THE IMAPCT OF ERP SYSTEMS ON SCM

With the change of the ICT landscape, supply chain design as opposed to supply chain coordination
is becoming a core competency (Fine, 1998). At the same time, many firms have implemented
company- 30 e-Business in Supply Chain Management wide systems, called enterprise resource
planning (ERP) systems, which represent the logical extension of the material requirements
planning (MRP) systems of the 1970s and of the manufacturing resource planning (MRP II) systems
of the 1980s. Interestingly, Akkermans et al. Prior to ERP, data were distributed across several
separate databases and information processed through multiple disconnected information systems.
Organisations typically maintained separate systems for purchasing, order management, human
resources, and accounting .

E-PROCUREMENT AS AN E-ENABLED SUPPLY CHAIN FUNCTION

One of the key links in the supply chain is supply management as it sets the foundation for other
links in the chain.

 It is at the supply end where most of the expenditure on supply chain activities exist.
 Reducing procurement costs can have a powerful effect on a firm’s finances – a 5% cut can
translate into a 30% jump in profits.
 E-procurement represents an implicit part of supply management, whereby Internet
technology is applied to facilitate corporate buying.

E-Business in Supply Chain Management

The concept of e-design has emerged to facilitate supplier involvement in the specification
development process of a product. It facilitates reduced time-to-market cycles by overcoming the
silo-effect of the traditionally sequential design activities. The use of the Internet also facilitates e-
sourcing, which is the process of finding new potential suppliers using ICT with the aim of
decreasing search costs. Identifying new sources of supply increases competition during the
tendering process. Furthermore, E-tendering is the process of sending RFx to suppliers and
receiving responses electronically.

The three types of RFx commonly used for sourcing are:

 RFI (request for information),

 RFP (request for proposal),
  RFQ (request for quotation).

RFIs typically involve a potential buyer asking a seller to provide additional information on a
product or process.

RFQs involve a potential buyer requesting a specific price for given items, while RFPs tend to
include both a quote and a qualitative description of the work to be done.

TRADITIONAL SUPPLY CHAIN MANAGEMENT

ONLINE SHOPPING’S IMPACT ON SUPPLY CHAINS: ONCE THE

INTERNET AND ONLINE SHOPPING ENTERED THE PICTURE, VOLATILITY BECAME
MORE COMMONPLACE. THE INTERNET CAN AMPLIFY TRENDS, AND E-COMMERCE
MAKES IT RELATIVELY EASY TO ORDER ANYTHING, ANY TIME, FROM ANYWHERE.
MOREOVER, SEARCH ENGINE ALGORITHMS CAN WREAK HAVOC ON YOUR BRAND’S
VISIBILITY.

HOW DATA SHARING IS CREATING SUPPLY CHAIN

TRANSPARENCY?

DATA SHARING CAN DECREASE VOLATILITY FOR ALL NODES IN THE SUPPLY
CHAIN. ESSENTIALLY, REAL-TIME DATA ACCESS ALLOWS YOUR BRAND TO
VISUALISE THE ENTIRE PICTURE OF SUPPLY AND DEMAND. WITH ACCESS TO
RETAIL DATA FROM POS SYSTEMS  AND INVENTORY APPS, YOU CAN SEE HOW
MUCH STOCK IS ON SHELVES AND IN STOCKROOMS. YOU CAN ALSO VIEW TRENDS
IN YOUR NICHE BY LOOKING AT RETAIL REPORTS. WHEN CONSUMERS SHARE
THEIR DATA VIA SURVEYS, QUESTIONNAIRES, SOCIAL MEDIA PLATFORMS, AND
COOKIES, YOUR BRAND IS ABLE TO MAKE PRODUCT-DEMAND PROJECTIONS.
ANALYTICS SOLUTIONS, SUCH AS GOOGLE ANALYTICS, ALLOW YOU TO
UNDERSTAND YOUR AUDIENCE FROM A DEMOGRAPHIC AND LOCATIONAL
PERSPECTIVE. IN TURN, WITH SUPPLY CHAIN MANAGEMENT SOFTWARE, YOU’RE
ABLE TO SEE WHERE MANUFACTURING, WAREHOUSING, AND SHIPPING ARE IN
THE FULFILLMENT PROCESS. THEN, YOU CAN BE TRANSPARENT WITH THE
CUSTOMER ABOUT WHEN THEIR ORDER WILL ARRIVE.
 AUTOMATION’S EFFECT ON SUPPLY CHAIN EFFICIENCY

WITH ACCESS TO DATA, BRANDS NEED AUTOMATION — IT’S NEARLY IMPOSSIBLE TO

OVERSTATE THE IMPACT THAT AUTOMATION HAS ON SUPPLY CHAIN EFFICIENCY,
AND THEREFORE, CUSTOMER SATISFACTION. IN 2011,  AMAZON WAS ALREADY ON
TOP OF AUTOMATION INNOVATIONS  WITH FEATURES SUCH AS 1-CLICK CHECKOUT.
AMAZON’S E-COMMERCE PLATFORM AUTOMATED THE PROCESS OF PLACING
ORDERS. COMBINED WITH PRODUCT SUGGESTIONS AND FAST SHIPPING DUE TO
INTEGRATED SUPPLY CHAIN MANAGEMENT SOFTWARE, AMAZON’S SERVICE
CAPTURED AN AMERICAN CUSTOMER SATISFACTION INDEX SCORE OF 87.
AUTOMATION ISN’T JUST FOR AN ECOMMERCE TITAN LIKE AMAZON. ANY BRAND
THAT WANTS TO AUTOMATE THEIR SUPPLY CHAIN CAN DO SO EASILY .

SUPPLY CHAIN STRATEGIES FOR E-COMMERCE BUSINESSES

MANAGING YOUR SUPPLY CHAIN WITH AN INTEGRATED E-COMMERCE SHOP IS

DIFFICULT IF YOU DON’T HAVE A STRATEGY IN PLACE TO SATISFY THE INFLUX OF
CUSTOMERS AND ORDERS. THIS BEING THE CASE, CONSIDERS THE FOLLOWING
STRATEGIES FOR STREAMLINING YOUR E-COMMERCE OPERATIONS:

INCREASE WAREHOUSE CAPACITY AND CUSTOMER PROXIMITY:  

THE CLOSER YOUR WAREHOUSES ARE TO CUSTOMERS, THE FASTER YOU CAN
FULFILL ORDERS DIRECTLY TO CONSUMERS OR BRICK-AND-MORTAR RETAILERS.

Lower the cost of shipping:

  Since you’ll likely be saving money through automation and increasing warehouse capacity,
offer shipping deals for orders over a certain price, as well as incentives to bundle items,
such as price discounts and free shipping.
Integrate an order management system:
 our OMS should be integrated with your eCommerce store, physical locations, and ERP. This
way, the end-to-end order management process is automated, working hand-in-hand with
each link of the supply chain to guarantee customer satisfaction.

Kit items:
 Kitting items is the process of automatically manufacturing and storing bundled items
together. This way, when customers bundle items online and place an order, you won’t have
to spend extra time putting the bundle together and shipping it out.

Automate invoicing :
 With online invoicing, your customers can pay online and access all important payment
documentation whenever they need to. With faster invoice processing, orders will move
more quickly through the supply chain.

1. All told, streamlining your supply chain through automation has a surprise effect: it allows
you to focus more on listening to your customers. With ERP-integrated e-commerce
software, you can work to give your customers what they want and need, right from when
they click a button.

BEST PRACTICES  
Today, global e-commerce is a $2.7 trillion market.
To put it perspective, if e-commerce was a country, it would have the fifth largest economy in the
world.
Clearly, this presents a world of opportunity. And millions of other people know it too. So, you need
to follow the best practices in e-commerce to make your store stand out.
A decade ago, a smart site with great products would have been sufficient. Now, it’s important to be
proactive and get ahead of your rivals. Here are some of the most common challenges that online
retailers face:
1. Sell the right products:
 The central part to any e-commerce store is the products you sell. It’s stating the obvious
but if you’re selling something no-one wants, then no amount of marketing will work.
2. Attract visitors to your site:
 There are thousands of e-commerce stores opening each week, all competing for similar
audiences. You need to find ways to attract visitors to your site to get ahead of the others.
3. Conversion rates:  
The average conversion rate for an e-commerce site is 2.5%. There are a number of reasons
for this, including the fact that shoppers often like to browse before they buy. The challenge
is to make them buy on YOUR site.
4. Using the right partners:
 With countless agencies and tools out there, it can be a minefield. It takes time and research
to find the right partner for your business, whether it’s technology or a service.
 5. Hiring the right team:
 It’s the people that make your company click and deliver the customer service you need.
Technology can help but it can?t replace a great team.
HOW FLIP KART INNOVATED TO BUILD INDIA’S EXEMPLARY E-COMMERCE
MARKETPLACE

THE E-COMMERCE MARKETPLACE IN INDIA IS DOMINATED BY INNOVATIONS THAT

FLIPKART HAS PIONEERED. THIS IS THE STORY OF THE KEY STEPS THAT INDIA’S
ONLINE SHOPPING POWERHOUSE HAS TAKEN TO BUILD A VIBRANT ECOSYSTEM OF
SELLERS AND CUSTOMERS
In 2015, retail sales in India accounted for about $925 billion and increased at a
compounded annual growth rate (CAGR) of 5.8% from 2010 to 2014, according to a report
by AT Kearney. Considering the size of India’s population, as well as its growing affluence
and economic capacities, the retail industry has a vital role to execute in the Indian
economy. With increasing internet penetration, there has been a radical shift in consumer
behavior. Consumers are more aware, quality conscious and prefer easy and convenient
shopping. The challenge for retail lay in realizing this nascent potential. This is the story of
the steps that Flipkart initiated to define and manage India’s most robust online
marketplace.

HOW FLIP KART DEFINED INDIA’S E-MARKETPLACE?

In the summer of 2013, the country’s biggest e-commerce player opened its doors to sellers,
allowing them the opportunity to taste success in an online marketplace. However, for sellers, the
online marketplace was uncharted territory. 

Consider some of the challenges that the seller faced: 

 Gruesome competition from established brands

 Paucity of capital to launch their own stores or brands
 Geographic limitations, which limited their reach to customers

Flipkart foresaw that a growing consumer base meant an increased demand for products, and a
need for variety. The transition from the inventory-based model to the e-commerce marketplace
meant that all three — the customer, the seller and Flipkart — were well placed to win big.  

The launch of the Flipkart marketplace witnessed a series of innovations and unique initiatives that
would go on to become best practices as the industry evolved, inspiring and emboldening the
competition as well as new startups entering this space.  

What followed in the succeeding months since the summer of 2013 was a series of disruptive
initiatives on Flipkart’s part. These included: 

 Convincing sellers that it made ‘business sense’ to sell online

  Empowering sellers to meet customer demands around speed of delivery and reliability of
service
 Retaining and rewarding sellers to sell online and consistently improve efficiency
Flipkart embarked on acquiring sellers in order to offer a broader product selection to customers.
Following were the steps in the process of enlisting sellers:  

 Flipkart first reached out to sellers through ads

 A special team connected with the sellers and educated them on online selling
 The team addressed sellers’ concerns regarding on-time payments and safety of personal
information
 

ON-BOARDING SELLERS WITH THE FEET ON STREET PROGRAM  

A PAN-INDIA PROGRAM CALLED ‘FEET ON STREET’ SAW FLIPKART PARTNERS ASSIST
SELLERS IN UPLOADING THE REQUIRED DOCUMENTS, COORDINATING WITH CATALOGING
PARTNERS, AND HELPING THEM LIST THEIR PRODUCTS ON THE MARKETPLACE. THEY
FOCUSED ON TIER I CITIES SUCH AS MUMBAI, BENGALURU AND KOLKATA.  

FLIPKART ONE STOP  

To ensure that sellers’ listings remained updated, the team leveraged partner networks and
brought sellers under a single umbrella. With this, sellers could avail of marketplace services such
as account management, brand creation, and returns management. 
 CREATING CLUSTERS  

Flipkart touched 2,400 specialized manufacturing clusters of India, which had not yet made a
transition to the e-commerce marketplace. This program was piloted in three key hubs — Tirupur
for apparel, Ludhiana for lifestyle products, and Jodhpur for furniture. 

Following this initiative, which was led by former head of marketplace Ankit Nagori, Flipkart
earned the distinction of becoming the first e-commerce company in India to build an ecosystem of
professional services such as cataloging and packaging partners. 

CATALOGING  

A healthy, updated and data-rich catalog is key to selling online successfully. Flipkart strove to
create a new ecosystem of cataloging partners. Today, this network has expanded to encompass
over 350 cataloging partners.

PACKAGING  

Packaging complaints and grievances can hurt the NPS (Net Promoter Score), which is a measure of
the loyalty of a firm’s customer relationships. By employing dedicated packaging partners,
Flipkart’s marketplace team affected a sharp decline in such complaints and grievances. This also
awakened the seller community to the value of quality packaging. 
Through innovative decision-making, Flipkart built an enthusiastic community of first-generation
online sellers. Now came the time to help their online businesses grow.

ORDER FULFILLMENT   IN A JIFFY

Flipkart went the extra mile to satisfy customers by making its warehouses available to sellers for
maintaining their inventories, thus enabling faster shipping. However, Flipkart also simultaneously
strived to fulfill orders at a quicker pace than the sellers themselves, ensuring that customers
benefited either way.

THE EXPRESS PROGRAM

Sellers enlisted in the Express Program marked all the orders that were ready to be dispatched
within two hours of having received them. This program was launched to accelerate the speed of
delivery.

REWARDING AND RECOGNIZING HARD WORK  

Recognizing sellers for their hard work was not a norm in the e-commerce marketplace. Flipkart
initiated a new trend in this regard, which went by the name of Udaan rewards program. 

FLIPSTARS REWARDS PROGRAM

In 2015, Flipkart revised the seller rewards program, through which top-performing sellers could
win cars, bikes, smartphones, as well as foreign and domestic trips during flagship events like The
Big Billion Days. This rewards program also motivated sellers to strive for recognition. These
awards were facilitated in various cities across the country during seller events. 

FLIPKART BUSINESS HOURS  

The Flipkart Business Hours program was one such seller event where Flipkart leaders traveled to
major Indian cities to interact with sellers. On the agenda were business discussions, new Rate Card
launches, and product upgrades. This personal connect encouraged sellers to speak up, express
their concerns, and share and receive feedback.

SELLER TIERING: PROMOTING A TRANSPARENT

MARKETPLACE

To demonstrate Flipkart’s commitment to transparency in the marketplace, the team introduced

Seller Tiering in November 2016. A set of performance metrics, measured over 90 days, was
enforced. The highlights: 
  Over 100,000 sellers were tiered into Gold, Silver and Bronze categories
 Sellers had complete performance visibility, tier benchmarks, and instructions on how to
get there
 ‘Gold’ sellers were those with exceptional performance metrics
 Benefits given to top sellers motivated them to perform better and improve their quality of
products and services.

Within three months of implementing seller tiering, the Flipkart marketplace saw a 40% increase in
‘Gold’ sellers. Gold sellers received added benefits that included, but were not limited to, priority
seller support called ‘Flipkart CareTouch.’

THE ENTRY OF PRIVATE BRANDS

Flipkart launched its private brand, Flipkart Smart Buy, offering a selection of quality products at
affordable prices. Flipkart worked hand-in-hand with the sellers to finalize the product quality and
specifications. There were stringent checks to ensure adherence to these metrics. 

All of the above innovation practices materialized into successful seller and customer experiences,
paving the way to marketplace domination for Flipkart’s sellers. Innovation is hard-wired into
Flipkart’s DNA. While the idea of an online marketplace was not in itself a new one, making it a
viable reality required a lot more than setting up the framework and infrastructure for it. By
enfolding the interests of sellers and customers within each innovative step and process, Flipkart
built what is arguably one of the most vibrant online marketplaces in the world. This is but just
another step in a journey of firsts.