E – Commerce

Logistics - Proposal

Raghavendra M
Raghavendra.Darmatek@gmail.com
Table of contents
1. Executive summary.…………………………………………………………………………………………...2
2. Solution outline.………………………………………………………………………………………………….2
2.1 Components of Business model…………………………………………………………………..2
2.2 Industry factors……………………………………………………………………………………………2
2.3 Resources…………………………………………………………………………………………………….3
2.4 Costs…………………………………………………………………………………………………………….3
2.5 Positions……………………………………………………………………………………………………....3
2.6 Activities……………………………………………………………………………………..……………....3
3. E-commerce logistics Business model canvas…………………..…………………………………4
3.1 Steps involved in order fulfillment process…..……………………………………………...4
3.2 Inventory management………………………………………………………………………….…….4
3.3 Inventory storage……………………………………………………………………………….………..4
3.4 Receiving orders……………………………………………………………………………………….….4
3.5 Picking…………………………………………………………………………………………………….……4
3.6 Packaging……………………………………………………………………………………………….…….4
3.7 Return order processing……………………………………………………………………………....5
4. Enhancing order fulfillment process……………………………………………………….……….…..5
5. Challenges in order fulfillment process………………………………………………….…………....6
5.1 Demand planning………………………………………………………………………………………....6
5.2 Inventory management…………………………………………………………………………………6
5.3 Supply chain execution…………………………………………………………………………….……6
5.4 Logistics planning……………………………………………………………………………………….….6
6. Standard Business model………………………………………………………………………………………6
7. Steps involved in E-commerce logistics order…………………………………………………..…..7
8. E-Warehouse services & third party logistics solution for an E-commerce……….…..7
store………………………………………………………………………………………………………………….....7
9. E-logistics flow & stages involved………………………………………………………………………….7
10. E-Commerce Operations flow………………………………………………………………………….……8
11. E-Packing service…………………………………………………………………………………………………..8
12. Findings………………………………………………………………………………….................................8
13. Implementation……………………………………………………………………………………………….......8
13.1 Phase 1……………………………………………………………………………………………..…..……9
13.2 Phase 2…………………………………………………………………………………………..………..…9
13.3 Phase 3……………………………………………………………………………………………………..…9
14. Risk & compliance………………………………………………………………………………………………….9
15. Appendix………………………………………………………………………………………………………….…….9
16. References……………………………………………………………………………………………………………10
1. Executive summary:
E-commerce organizations require a complete logistics services to
support their digital growth strategy. Here, safeguard air oceanic will
exist as a supporting pillar for E-commerce platform by providing
logistics services to E-commerce customers.
This document will give a clear understanding on components of
business model & canvas, mechanism & operations flow to drive on
further.

2. Solution outline:
Safeguard air oceanic needs to build an exclusive application for
logistics services integrating with E-commerce site, where-in customers
can book their request via online based on the available products.
Here, we add on providing access to logistics application for public
users via mobile & web source to facilitate customers for booking an
order request.
2.1 Components of business model:

2.2 Industry factors:

Logistics industry in Malaysia has evolved in recent years - with the
increase of E-commerce in the country, now companies are capitalizing
on this emerging trend. The interest of the companies in emerging
areas like cold chain logistics, last mile delivery services etc. Is growing,
due to high margins & rising demand. Economy of the country is
expected to grow between [5% - 6%] driving the growth of logistics
industry further.
As a result, growth of logistics sector is expected to be positive in
future. Also, there is much scope for improvement.
To enable the E -logistics sector to handle greater volumes of freight.
Have to speed up the time taken to deliver goods across the supply
chains & reduce the delivery cost. Several improvements need to be
initiated for a better outcome.
2.3 Resources:
It implies to resources managed in E – logistics services, which includes
tangible goods. Such as materials, equipment, supplies & other
consumable items etc. Here, we need to diligently focus on
transporting the items in a safe & secured way. The process travels
various stages of E-commerce logistics order to meet the business
requirement.

2.4 Costs:
In this segment, we come across the total expenditure done on a single
product from the beginning of procurement to selling it to end
customer, which includes transportation cost, storage cost [warehouse
cost], transit cost [in transit damage] & Damage cost [in storage
damage]. Here, we need to take preventive measures to have control
on the respective factors.

2.5 Positions:
It refers to 7 rights procedure in E-logistics services i.e. to deliver the
right product in the right quantity & the right condition, to the right
place at the right time for the right customer at the right price. Here,
we are mainly highlighted the importance of moving & storing
materials in an efficient timely & reliable manner. In addition, these are
the key strategic objectives of cost competitiveness, quality, flexibility &
delivery which are to be mainly considered.
2.6 Activities:
In this process, we come across certain prominent phase layers.
Considering industry factors, resources, costs & positions involving the
steps like payment method, checking product availability, arranging
shipments, insurance etc. Proper collaboration, transparent
communication with customers for delivery & returns are the other key
factors that determine the successful drive on E-logistics services.

3. E-commerce logistics Business model

canvas:
Here we need to focus on essential marketing schemes:
Post establishment, have to provide open access to key partners
through a registration process. By reforming the vendor details in
system – will authenticate via back ground check based on the
documents provided to make the vendor service active in our system in
order to enable logistics service to E-shoppers.

3.1 Steps involved in order fulfilment process:

3.2 Inventory management:

Here, we need to move on deploying warehouse management software
for better management of products. Also, it should contain a scannable
bar code called stock keeping unit, which would give us access to track
the products accurately. Discarding process may take place to arrange a
new one in replacement, provided if the products are found defective.
Requirements:
An inventory management team for auditing purpose.
Maintenance – warehouse management software.
Operations team – For providing operational support to merchants
selling on Safeguard air oceanic platform.

3.3 Inventory storage:

In this, we need to focus on speeding up the fulfilment operations.
Have to find the products which can lead to a delay in processing. It’s
good to have a proper arrangement setup to avoid such hassles. Also,
this kind of lean would benefit us in optimizing our warehouse space to
accommodate maximum items in the respective hub.
Requirements:
Set of warehouse supervisors for deploying products in place.
Process executive – To find the product demand, stock availability &
sharing the order status to the customer.

3.4 Receiving orders:

Have to set preferences for receiving requests. In such a way, by
integrating our E – logistics cart with specific software to directly fetch
orders from E-commerce site, based on the available products.
- Need to sort orders by delivery dates from ascend to descend. To
consider the earlier order on priority.
- Post receiving the order request, an e-mail needs to be set to
customer – confirming the request & an estimated delivery date,
provided if applicable. Else, need to provide a time frame as to
when they can expect the delivery of their order.
Requirements:
Need to construct software for bridging connectivity between E-
logistics cart & E-commerce site.
3.5 Picking:
It involves scanning process through our warehouse & finding the
product required by the customer. This process may include one
product from one warehouse or 2 products from 2 other warehouses.
In case of many orders on the queue, would require a staff to work for
warehouse logistics. The measure could accelerate our fulfilment
process & also save costs by streamlining the procedure.
Requirements:
- Dedicated Staff to work for warehouse logistics.
- Automation technology would carry an added advantage in order
to speed up the picking process, need to focus driving on
automation process.

3.6 Packaging:
It acts as an essential part of the chain. Here, we need to focus on
different types of packaging & find the best one to proceed.
At first, package needs to be adequately packed, labelled & should
meet the standards set by courier companies. Ultimately, the packaging
should bear the friction caused due to transportation.
Requirement:
Need to have a specific unit for driving a safe packing process.
3.7 Return order processing:
In general - it’s unavoidable to resist the return order process. Here, we
need to opt for a method – which can help us automating the
information of non-delivery receipt & further processing return orders
in an easy way. This mode can possibly reduce our returns & save on
return orders by a large margin.
- Make the return process easy to understand & initiate.
- Request the return reason, which could help us to optimize our
current services & system.
- Making the customer’s life easier by providing the return label &
digital solution.
- Keep the customer informed about the return status.
- Need to segment our customer data base.
- Focus on customer feedback.
- Incorporating customer reviews.
- Leverage data driven E-mails
- Constant analysis.
- Need to adopt a liberal return policy.

4. Enhancing order fulfillment process:

- When order is received. Order details must be entered into back
office systems.
- Customer should be notified that, the order has been received in
the system.
 - Order would be sent to warehouse. As part of a batch a paper
order might be directly sent from an invoicing order management
application.
- Once, when order is picked. An agent will go to warehouse, finds
item in the order & picks them off the shelf.
- Order is packed to prepare for shipping.
- Post shipping, customer is notified that, the order is on the way.
- Order arrives.

5. Challenges in order fulfillment process:

Demand planning
Inventory management
Supply chain execution
Logistics planning

5.1 Demand planning:

Analysing in advance, as what demand for a product will be & shaping
the demand. Here, we need to try generating demand via marketing &
promotion strategy.

5.2 Inventory management:

Here, we need to focus on knowing what’s in stock & being able to
provide visibility on stock levels as the order is placed. It influences in
preventing customers from being disappointed with backorders &
delays.
5.3 Supply chain execution:
When ordered items are unavailable, how quickly can we get them
back in stock?
How quickly can our manufacturers produce more products?
How long will it take to get to our warehouses?
To avoid such queries, need to have a connective track on all these
factors.

5.4 Logistics planning:

When the items are ready to ship, how are we going to get them to the
customer?
How long will it take?
Will the items be handled carefully?
Here, we need to focus on respective queries, delivery duration &
diligent product handling until it reaches the customer.

6. Standard Business model: By using the concept

of below specified analysis, would result in
assimilating the requirements & operational
structure.
6.1 Market Research: As per the research made,
current market trend is ranging a high demand on
E-logistics services, which implies to take a positive
move on proceeding further.

6.2 Competitive analysis – In this, when compared

in relationship between E-commerce partners & E-
logistics service provider. Considering the current
data of an existing service provider information
with terms & conditions - will support us to gauge
the impact & external output.

6.3 Sales strategies – Here, it implies to increase

the sales predictability to put in place a sales
process, which is repeatable & measurable, have to
consistently focus on increasing the leads. For
executing the process, need to have an individual
marketing analytics team to drive & progress. The
setup will support & promote our business to create
an awareness to reach the end customers
effectively & to find the block stock in lagging area
of resistance in the process flow.

6.4 Capital requirement – Here, we need to

understand the market pertained variables on
capital cost of the entire logistics service providers
& involved systematic risks. To get this information,
financial data is very prominent to come out with a
strategic decision making.

6.5 Labour requirement – To have an estimation of

labour requirement, need to fix the range size to
meet the business expectations, which would better
influence the organization to get a clear idea of
allocating the personnel for its relevant area of
work.

6.6 Financial data – It acts as a default need, in

terms of analysing the financial inflow & outflow
mechanism, which creates an emphasising factor
for executing a diagonal methodology to have an
effective return of investment.

7. Steps involved in E-commerce logistics

order:
When an order placed via E-commerce logistics site - it travels certain
processes i. e [first mile, fulfillment, processing/sorting, line haul, and
last mile delivery] before reaching the customer.
In this process, we move the products from retailer to a courier service
in a respective condition by arranging systematically in groups & types,
post which the movement of freight comes in place to move the goods
from transportation hub to final delivery destination.
7. E-logistics flow with stages involved:
8. E-Warehouse services & third party logistics
solution for an E-commerce store:
We have a huge volume of space for having physical goods storage,
where can accommodate storage of goods in a way safe & secured.
Also, may store goods of E-commerce retailers. Due to faster
movement of delivery, insufficient space in their own warehouse area,
to avoid goods storage maintenance costs & other external reasons.
It occurs, when an E-commerce store implies outsourcing certain
logistics activities to a third party.
Logistics functions those are usually outsourced:
Warehousing: Here, we find 2 options before the store owner.
Either, the respective can own the warehouse or can let the 3 rd party
logistics company to provide the warehouse.

The main reason, which would influence not to own a warehouse, is

because an E-shop will have to incur expenses like warehouse rent,
staff salary, Maintenances & managing the warehouse. Need to have a
multiple warehouses to cover maximum areas for faster deliveries.
Here, we need to be highly focused on fulfilling the default
requirements as mentioned –
Need to manage & maintain multiple warehouses.
Need to undertake the responsibility for storing E-shop goods.
We, as a third party logistics service provider need to pack the articles
for delivery to E-shop customers. Need to entail inventory management
on goods to ensure a seamless supply chain for E-Store.
9. E-Commerce Operations flow:
10. E-Packing service:
Here, we can include types of packages like corrugated boxes,
boxboard, paper board cartons, paper bags & sacks.
Package should be made in such a way that, the product could be
conveniently taken from one place to another & can be handled easily.
Packaging should not be expensive, to avoid increased product value.
Packaging should be attractive & fascinating for the customer view.
Package should contain information required by law & consumers
about the brand utility & quality of the product.
Proper packing arrangement should be made to protect the product
from every risk.
Package should be produced by the material in such a way that do not
affect environment.

11. Findings: By reviewing the descriptive analysis,

it explains the range, need & business scope to
execute the model in a linear way with reference to
our current market trend. Also, people’s preference
is being more often to choose an E-commerce mode
of purchase. Here, as a logistics service provider -
we need to focus on getting the connect link to tie
up with more E-commerce businesses.
12. Implementation:
Need to have our own warehouse for pick, pack & shipping process.

Operational Process holding from first mile to end mile logistics have to
be monitored.

Need to have a return management set-up. Since, it’s unavoidable to

resist the returns from E-commerce shoppers.

Need to make our safeguard E-logistics live & accessible to public users.

Need to create a platform, were customers can avail the logistics

services via mobile/web application to book an order.

Have to create an application exclusively for E-logistics in such a way,

by creating a linkage between E-commerce & Logistics site, through
which an orders could be directly taken from the customer end – based
on the available products in E- commerce site.

To manage end to end activities pertained to order queries; order

management team needs to be set for the process drive.

Big data technology would be better influential to our business - in

terms of live streaming, finding the short fall areas & external expenses
etc. Also, it acts as coherence & supports our business to expect a
productive output.

Drone technology would be an added privilege – when compared to

other E-logistics service providers. Also, it can bring an exponential
change to our vision focus for the next level of reach.

Phase 1:
 Need to understand the existing logistics
process.
 Required digital marketing team to manage
the marketing campaigns
 Need to create awareness among people

Phase 2:
 Need to have an individual hub in all the states
of Malaysia. To avoid challenges on return
management process.
 Need to have a compliance team to perform
an internal audit, risk management &
developing compliance programs to avoid risk
possibilities.
  Pick up/delivery alert needs to be sent via
automated message/call to nearby available
agents, as & when order is booked.

Phase 3:
 Big data technology will intensely support &
facilitate our business process to have a real
time streaming.
 By providing cash back offer - Can expect
receiving additional orders, when placed from
mobile/web application.
 Need to sort out an identical delivery/pickup
area in order to save fuel & resist unavoidable
process delay.

13. Risk & Compliance:

It occurs due to changes in laws, rules, policies, tax, regulations,
technical standards & trade policies.

 A specific team has to work on escalation & ad hoc rules.

 Obtained data needs to be highly secured.

  Need to remove non-compliant items from E- logistics site.

 Have to make decision on whether products reach all the

customers abiding E-logistics policy.

 Need to have an internal quality check team.

14. Appendix:
E-commerce industry is growing exponentially in Malaysia, which
parallelly supports E- logistics services along. As per the BMI research
made in 2018 reported that, the country is set to contribute an
estimation of 64.8billion USD in 2021.
15. References:
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_A_CASE_STUDY

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