E-commerce is emerging
as a superb approach for
providing solutions to
problems along the
supply chain. As seen in
the Dell example
A major role of EC is to
facilitate buying, selling,
and collaborating along
the supply chain.
Restructuring the Supply Chain
E-commerce can introduce
structural changes in the
supply chain. For example,
the creation of e-markets
drastically changes order
processing and fulfillment.
Integration of EC with ERP
• Since many middle-sized and large companies
already have an ERP system, and since e-commerce
needs to interface with ERP, it makes
sense to integrate the two. For example, SAP
started the mySAP initiative.
• The logic behind integrating EC and ERP is that by
extending the existing ERP system to support e-commerce,
organizations not only leverage their
investment in the ERP solution, but also speed up
the development of EC applications.
• The problem with this approach is that the ERP
software is very complex and inflexible (difficult
to change), so it is difficult to achieve easy,
smooth, and effective integration.
• One other potential problem is that ERP systems
tend to focus on back-office (administrative)
applications, whereas EC focuses on front-office
applications such as sales and order taking,
customer service, and other customer
relationship management (CRM) activities.
ORDER FULFILLMENT IN E-COMMERCE
Some applications of EC, especially B2C and
sometimes B2B, may have problems with their own
supply chains. These problems usually occur in order
Innovative Solutions to the Order Fulfillment
• Same-day, even same-hour delivery.
• Dialing for dinners.
• Automated warehouses.
Dealing with Returns
Returning unwanted merchandise and providing
for exchanges are necessary for maintaining
customers’ trust and loyalty.
• Return an item to the place where it was
• Separate the logistics of returns from the logistics
• Allow the customer to physically drop the
returned items at collection stations from which
the returns can be picked up.
• Completely outsource the logistics of returns.