Overview
e-Thematic addresses the area e-fulfilment which involves all activities required to physically satisfy demand for products ordered via the internet and includes the following logistics activities:
- Customer service;
- Order processing;
- Finished goods inventory management;
- Outbound transportation and sales forecasting.
In short, e-fulfilment relates to all the demand linked logistics activities and, as such, is an important component of supply chain management. While applications for all the operational activities of logistics are already well developed, the e-fulfilment applications are not. The gap between user expectations and market offer is of all the logistics activities the highest for e-fulfilment. Especially, outbound transport scores very low. A new range of innovative and user centred applications have to be developed. e-fulfilment facilitates the integration of innovative applications and e-services with private and public information infrastructures, thus providing enterprises a sound basis to achieve higher levels of integration, efficiency and cost-effectiveness. The reason for this integration is that the movement of materials and end products is not any longer executed by single divisional functions, but increasingly, through a single and seamless cross-company process.
The main objectives of the e-Thematic network are to:
- Cluster existing European research projects in the field of e-logistics and e-fulfilment;
- Identify emerging applications and technologies;
- Identify 'good practice' examples from the industry and the research sector;
- Formulate a common approach for the future European research on e-fulfilment.
To achieve the objectives, a research methodology was laid out . The project was divided into six work packages: Project Management, Technical Assistance, Inventory, Clustering Activities, Defining Future Needs and Exploitation and Dissemination. Together, these packages led to the following deliverables:
- Clustering Report 1;
- Clustering Report 2;
- Clustering Report 3;
- State of the Art Report;
- RTD Report;
- Final Report;
- Business Plan of an e-Fulfilment Forum;
- Compendium of e-fulfilment.
During the project, information on e-Fulfilment was acquired and analysed continuously, this included a website analysis of some 500 B2B and B2C e-Businesses from which best practices were identified. Comprehensive dissemination of project results was done via the project website, newsletters, participation in conferences, brochures, the organisation of seminars and workshops. Information pertaining to e-Thematic was disseminated electronically via the project's website (www.e-thematic.org), including e-Fulfilment developments that were collected throughout the duration of the project. This has resulted in a dynamic database, available on the website, that contains information and data on relevant technologies, applications, market organisations, market players and RTD projects and programmes.
Funding
Results
In depth analysis of Business-to-Consumer (B2C) and Business-to-Business (B2B markets have identified important differences, especially between North America and Europe.
Firstly, in Europe e-companies are mainly locally focused avoiding complicated supply chains and heavier back offices. Languages are a main barrier to conquer market share in other countries since different language applications make back offices heavier. European e-companies therefore focus on a smaller client base. In North America, a more worldwide focus is applicable due to the language advantage to conquer worldwide market share, without additional costs for the back office.
Secondly, in Europe a strong specialization in products exists. Supply chains differ according to the type of products that need to be protected, transported and delivered. Due to the fragmented logistics market in Europe the focus is on optimizing logistics and cutting costs by specialization. In America, more products are offered by one retailer. Since there is a homogenous logistics system, the supply chain costs are lower. Further, the back-office activities are not as expensive as they are in Europe. Therefore more products can be offered online. To lower the supply chain costs of the logistics systems in Europe to a more competitive level, integration and standardisation of these back office activities is required.
Thirdly, the success of e-Business in North America also emerges in the distribution coverage outside the local market. North America is preferred by non-American companies as a sales and distribution location. This conclusion is also valid for the B2C market but less strong since there is a direct correlation between the variable physical presence and the distribution coverage. B2C e-companies often have no local presence outside their home markets, which leads to no or limited distribution outside the home markets.
Fourthly, in addition to language barriers and product specification, payment systems are different compared to North America. Payment on delivery is a common practice in Europe. Furthermore Europe provides more payment options compared to other regions.
Finally, direct track and trace options in the B2C market are offered on a much lower scale in Europe (43,6%) compared to the North America (81,3%). Tracking facilities via the website are not as essential within B2B business as within B2C business, since often alternative tracking has been used historically (e.g. frequent contact
Policy implications
For many businesses the attractiveness of e-Business is that it allows very cost effective entry and operation in new markets. A substantial proportion of a company’s revenue may be generated outside its home market. To achieve this, significant issues have to be resolved. The differences in the implementation of taxation regulations between the European Union Member States are creating barriers to cross border e-Fulfilment. To create a more efficient European business environment a single regulatory system, which is transparent and flexible, is needed.
Main recommendations are:
• to harmonise taxation policies (eg import duties for products from non-EU countries) across EU member states,
• to create one single European VAT level and management.
The project carried out research and network activities to provide a better view on and to exchange knowledge relating to existing and emerging processes, technologies, and applications in the area of e-fulfillment.
e-fulfilment facilitates the integration of innovative applications and e-services with private and public information infrastructures, thus providing enterprises a sound basis to achieve higher levels of integration, efficiency and cost-effectiveness. The reason for this integration is that the movement of materials and end products is not any longer executed by single divisional functions, but increasingly, through a single and seamless cross-company process.
As e-Fulfilment progresses, logistics and operational issues surface:
1 The European logistics market is fragmented. There is no one logistics service provider (LSP) or postal authority that can provide an integrated, optimised solution for the entire EU B2C market. This is due to the limited geographical coverage, poor cross border postal networks and gaps and issues