E-commerceinInternationalTrade

ImpactonSupplyChainandWarehouse

Management

KamilIsmagilov

Bachelor’sthesisOctober2015

DegreeProgrammeinLogisticsEngineeringTechnology,communicationandtransport

2

Description

Author(s)Ismagilov,Kamil

TypeofpublicationBachelor’sthesis

Date26.10.2015Languageofpublication:ENGEnglishNumberofpages:64

Permissionforwebpublication:X

TitleofpublicationE-commerceinInternationalTrade:ImpactonSupplyChainandWarehouseManagement

DegreeprogrammeLogisticsEngineering

Tutor(s)PakarinenRisto,FranssilaTommiAssignedbyJAMKUniversityofAppliedSciencesAbstract

Thisthesisstudiedhowtheintroductionofe-commerceintheinternationaltradehasinfluencedthesupplychainmechanismsandlogisticsoperationsintheglobaltradecontext.Asaresult,thestudyraisestheissueoftherelationshipbetweenthematerialflowandinformationflow.

Themethodologyofthepaperwasthatofaninductivecasestudywithqualitativemethodsofdatacollection.Basedonaliteraturereviewandaseriesofinterviews,thedeterminantsofe-commerceinfluenceweredefined.Casesofsupplychainmanagementandwarehouseoperationswereusedtovalidatetheframework.Theoutcomeontheresearchwastheoryabouttherelationshipbetweentheinformationandmaterialflow.Thetheoryisbasedonthepresentexperienceanddevelopmentofthekeyissuesoftheresearch.Thetheorypredictsthefuturedevelopmentsine-commerce,supplychainmanagementandwarehouseoperations.Althoughthetheorywasbasedonadeepliteraturereviewandsemi-structuredinterviews,therewerecertainlimitations.Thestudydidnottakeintoaccountseveralfactorsintheinternationaltradeoperations.Forexample,monetary,politicalandeconomicissueswerenotstudied.Companiescouldusethetheoryproposedbythisworktodeveloptheirstrategicsupplychainandwarehousemanagementplans.However,agreatervalueofthisresearchisthatstudentscanbecomefamiliarwiththepresentedissueandstudyitfurther.

Keywords/tags:e-commerce,internationaltrade,supplychain,warehouseoperations,informationflow,materialflowMiscellaneous\Asas

3

Contents

1 Introduction..........................................................................................................6

1.1 Motivation.....................................................................................................7

1.2 ResearchMethods.........................................................................................8

1.3 ResearchProblems........................................................................................9

1.4 ResearchQuestions.....................................................................................10

1.5 Importanceofthestudy..............................................................................11

2 Theoreticalbasis..................................................................................................11

2.1 InternationalTrade......................................................................................11

2.1.1 SilkRoad..............................................................................................12

2.1.2 ModernTrade......................................................................................12

2.2 E-commerce................................................................................................14

2.2.1 ClassificationofE-commerceModels..................................................15

2.2.2 E-commercelogistics...........................................................................16

2.2.3 E-fulfilment..........................................................................................17

2.2.4 E-commercebarriers...........................................................................18

2.3 SupplyChainandWarehouseManagement...............................................19

2.3.1 SupplyChainManagement.................................................................19

2.3.2 SupplyChainInnovation......................................................................23

2.3.3 WarehousemanagementandInnovation...........................................26

3 LiteratureAnalysis...............................................................................................28

4 Interviews............................................................................................................31

4.1.1 Qualitativeinterviewtypes.................................................................31

4.1.2 Preparation..........................................................................................32

4.1.3 Intervieweeselection..........................................................................34

4.1.4 Conductinginterviews.........................................................................37

4.1.5 Analysisofinterviews..........................................................................39

5 Results.................................................................................................................43

6 Discussion............................................................................................................45

7 Conclusion...........................................................................................................48

8 References...........................................................................................................50

9 Appendices..........................................................................................................53

9.1 Appendix1...................................................................................................53

9.2 Appendix2...................................................................................................55

4

9.3 Appendix3...................................................................................................55

9.4 Appendix4...................................................................................................57

FIGURES

FIGURE1.Researchstructure.......................................................................................7

FIGURE2.Inductiveapproachstructure.......................................................................8

FIGURE3.FivebasiccomponentsofSupplyChainManagement...............................20

FIGURE4.ManualEDIDocumentExchange(Source:OpenTextGXS)........................24

FIGURE5.EDIDocumentExchange(Source:OpenTextGXS).....................................24

FIGURE6.Exampleofchanneling...............................................................................26

FIGURE7.Currentsituationisanalyzed......................................................................31

FIGURE8.Intervieweeselectionguide.......................................................................35

FIGURE9.Interviewdataanalysisprocessmap.........................................................40

FIGURE10.AnalysisClassificationTree......................................................................41

FIGURE11.Trendsarepredicted................................................................................47

TABLES

Table1.Scientificliteratureonthetopicofe-commerceininternationaltrade.

(Burinskiene,2011).....................................................................................................10

Table2.ClassificationsofE-CommerceModels.(RayportandJaworski,2001;Kinder,

2002)...........................................................................................................................16

Table3.ShortListofcompaniesfromtwoexhibition................................................36

Table4.Listofinterviewedcompanies.......................................................................38

Table5.Descriptionofimplementedanalysisoftheinterviews(Leechand

Onwuegbuzie,2008)...................................................................................................39

5

Abbreviations

B2B–BusinesstoBusiness

B2C–BusinesstoConsumer

B2G–BusinesstoGovernment

C2C–ConsumertoConsumer

C2B–CustomertoBusiness

EDI–ElectronicDataInterchange

G2C–GovernmenttoConsumer

G2G–GovernmenttoGovernment

GATT–GeneralAgreementonTariffsandTrade

GDP–GrossDomesticProduct

ICT–InformationandCommunicationsTechnologies

IMF–InternationalMonetaryFund

OECD–OrganizationforEconomicCo-operationandDevelopment

SCM–SupplyChainManagement

SME–SmallandMedium-SizedEnterprises

WMS–WarehouseManagementSystem

WTO–WorldTradeOrganization

XML–ExtensibleMarkupLanguage

VAL–ValueAddedLogistics

VAS–ValueAddedServices

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1 Introduction

Overthelastfewdecades,internationaltradehasexperiencedseveralrapid

changes.Thesechangescharacterizethedynamismofthemoderntrendsin

internationaltrade.Evidently,thesignificanceofe-commerceinthedevelopmentof

internationaltradehasagrowingtendency.Burinskienė(2011)statesthatunderthe

modernglobalizationcircumstances,theapplicationofinformationand

telecommunicationtechnologieshasbecomeacrucialfactorofdevelopmentinboth

internationaltradeandeconomyingeneral.Forthepastyears,e-commercehashad

itsinfluenceontheinternationaltradeandlogisticsoperations.Therapidgrowthof

e-commerceintheglobalizedworldhasledtoagreatpressureonthelogistics

operations.Manycompanieshavehadtoadjusttheiroperations.Supplychain

strategiesandwarehouseoperationshavebeenmodifiedrapidly.

Itisnoticeablethatthoselogisticsoperationsareevolvingwiththeimplementation

ofnewtechnologiesandthatthereisgrowthintrading.Researchhasintroducedthe

ideathatthemaindrivingforceofchangesise-commerce.Inthisresearch,thefocus

wasonB2BandB2Cbusinessmodels.

Thestudyassumedthattherecentchangesinlogisticsoperationswereunderthe

influenceofe-commerce.Hence,thestudyfocusedontherelationshipof

informationalandmaterialflows.

Thestudywasdividedintothreetimeframes,asshowninFigure1.First,thehistory

ofinternationaltradeandthedevelopmentofe-commerceandtheirrelationto

supplychainmanagementandwarehouseoperationswerereviewed.Secondly,the

currentsituationinlogisticscompaniesregardingthisphenomenonwasanalyzed.

Finally,theroleofe-commerceinthedevelopmentoflogisticstrendswas

examined.Thesetimeframeswereanalyzedinordertofindcertainpatternsand

developthetheory.

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FIGURE1.Researchstructure

ResearchwasperformedastheBachelor`sgraduatethesisfortheLogistics

departmentofJAMKTechnology.

1.1 Motivation Personalinterestinthematterhelpedtochoosethistopic.Duringtheauthor’s

exchangeperiodinSouthKorea,hetookseveralclassesrelatedtointernational

trade.Theseclassesrevealedtheimportanceoflogisticsfromtheeconomicpointof

view.Whilereadingallthearticlesrelatedtothisissue,theauthordiscoveredthat

therewereonlyafewexploringmorethanoneidea.Mostofthearticlesfocusedon

thesuccessfullyimplementedsolutionsbasedone-services.Thus,theauthor

decidedtoconductastudythatwouldcoveralltheseexamplesinonepiece,

examinethem,andpresentoneconstantvectorofthefuturedevelopmentofthe

industry.Hopefully,thosewhoreadthisstudy,willatleastbecomefamiliarwiththis

issue.Thehighestachievementwillbeifthestudyinspirespeopletolookintothis

matterfurther.

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1.2 ResearchMethods

Theaimofthestudywastoprovideabetterunderstandingofthee-commerce

phenomenon.Anotheraimwastoexamineitsinfluenceonsupplychain

managementandwarehousing.

Fromthebeginning,itwasclearthatthistopicrequiredacomprehensiveliterature

reviewaswellasaqualitativein-fieldstudyinordertoreachtherootsofthis

matter.Inordertoprovideacompletepictureaninductiveapproachanda

qualitativeresearchmethodwereselectedforthestudy.

Aninductiveapproachfirstlyinvolvesmakingspecificobservations.Moreover,data

relevanttotheresearchedtopiciscollected.Onceasubstantialamountofdatahas

beencollected,certainpatternscanbediscoveredinthedata.Next,atentative

theoryisdevelopedthatcouldexplainthosepatterns.Schutt(2006)summarizesthe

processofasinductiveapproachasfollows:

Whenresearcherstakeaninductiveapproach,theystartwithaset

ofobservationsandthentheymovefromthoseparticular

experiencestoamoregeneralsetofpropositionsaboutthose

experiences.Inotherwords,fromdatatotheory,orfromthe

specifictothegeneral.

Figure2.outlinesthestepsinvolvedwithaninductiveapproachtoresearch.

FIGURE2.Inductiveapproachstructure.

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Qualitativeresearchischaracterizedbythecollectionandanalysisoftextualdata

(surveys,interviews,focusgroups,conversationalanalysis,observation,

ethnographies(Olds,2005)),andbyitsemphasisonthecontextwithinwhichthe

studyoccurs.Theresearchquestionsthatcanbeansweredbyqualitativestudiesare

questionssuchas:

• Whatisoccurring?

• Whydoessomethingoccur?

• Howdoesonephenomenonaffectanother?

Answerstothesequestionsgenerallyrequirerich,contextualdescriptionsofthe

data.Byimplementingqualitativeresearchmethods,theauthorreviewsliterature

andbringstothelightquestionsandtheoriesoftheresearchtopic.Literatureis

analyzedusingaqualitativecomparativeanalysis.Inthisstudy,aseriesofsemi-

structuredinterviewsthatallowedaskingopen-endedresearchquestionswas

implementedinordertosupporttheliteraturereview..Theinterviewswere

analyzedbycombiningconstantcomparisonandqualitativecomparativeanalyses.

Whenusingaqualitativemethod,apatternisanalyzedafterwhichtheoryis

presented.Thetheoreticalperspectiveofastudydescribestheapproachusedto

explainrealityinrelationtopastdevelopmentsandfuturetrends.Thedatais

examinedwithoutpreconceptionsoftheexistingtheoryorpre-determined

categories.Thisallowsthemesorcategoriestoemergefromthedata.Thisprocess

allowsnewinsightthatwouldnotbepossibleifanexistingtheoryorconceptwere

imposedonthedata.(Crotty,2003).

1.3 ResearchProblems

Thesurveyofliteraturepublishedbyleadingworldpublishersshowedthatonly6%

ofallresearchfocusedonthetopicoftheapplicationofe-commerceininternational

trade(Burinskiene,2011)(SeeTable1).ThesameresultcamefromtheGoogle

Scholarplatform:forthesearchterm“internationaltrade”thesearchengine

provided2800000results,whereasfor“internationaltrade,e-commerce”theresult

was153000.Theratiobetween153000and2800000is5.5%.

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Table1.Scientificliteratureonthetopicofe-commerceininternationaltrade.(Burinskiene,2011)

YearsLiteraturededicatedto

internationaltrade

E-commerceresearchinthe

literaturededicatedto

internationaltrade

1976-1980 1562 4

1981-1985 2001 3

1986-1990 2823 12

1991-1995 3568 18

1996-2000 2148 353

2001-2005 2139 436

2006-2010 1174 108

Total 15415 934

% 100% 6,1%

Theconclusionisthatthereisalackofworksinscientificliteratureabouttheuseof

e-commerceininternationaltrade.

Performinginterviewswastimeconsumingandrequiredacertaintravelbudget.A

majordrawbackintheresearchwasthattherewasaninfluenceofbiasesfromthe

interviewsandliteraturereview.Nevertheless,asmentionedinthepreviouschapter,

theauthortriedtobeopen-mindedandfocusedonthedataitself,ratherthanon

theconclusionsoftheothers.

1.4 ResearchQuestions

Specifically,thestudyattemptedtoanswerthefollowingquestions:

I. Whatistheinfluenceofe-commerceoninternationaltrade?

II. Canmanagerialskillsine-commercebringacompetitiveadvantage?

III. WhatistheeffectofE-commerceontheglobalsupplychain?

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IV. WhatistheeffectofE-commerceonsupplychainmanagementand

warehouseoperations?

1.5 Importanceofthestudy

Thestudycouldshedlightontheproblemoftherelationshipbetweene-commerce

andlogistics.Asaresult,itcouldtracetheimpactofe-commerceonlogistics.This

studyreflectsmodernissuesinsupplychainandwarehousemanagement.Logistics

operationsareapartoftheglobaltrade,thereforelogisticiansneedtoreactsingle-

mindedlytonewchallengesandtackleproblemsthataremorecomplicated.The

developmentlevelofinformationtechnologiesisgrowing,andtheneedsare

perceivedinanewway,whichisapparentinthepracticeofe-commerce.

Apparently,theimportanceofe-commercetechnologiesinthedevelopmentof

internationaltradeisimmenseandhasatendencytogrow:underthemodern

globalizationcircumstances,theapplicationofinformationandtelecommunication

technologieshasbecomeacrucialfactorofdevelopmentinboththeinternational

tradeandeconomyingeneral.

2 Theoreticalbasis

Inqualitativeresearch,documentanalysisisanimportantpartofthestudy.Inthis

research,thetheoreticalbasisprovidesthegroundideasforabetterunderstanding

ofthestudyoutcomes.Thetheoreticalbasiswasusedasachanneltothepast.

Milestonesoftheinfluentialeventsarediscussedinthischapter.

2.1 InternationalTrade

Throughouthistorywecanseethattradehasbeenthedrivingforceofprogressand

thetooltospreadinnovationsanddiscoveries.Ancientmerchantstravelledmany

daysandlongdistancestofindexoticanduniqueitemsinordertoincreasetheir

wealth.Forthesepeopletradewasawayoflive.Itisknownthatsometradesmen

werericherthantheirrulers.Anunknowntrader,whoselifewasdescribedinabook

called“IsaactheJew”,writtenin10thcenturybythePersianauthorBuzurg,hada

cargoworthanestimatedmilliondinars–anincredibleamountgiventhatamiddle

classfamilycouldhavesubsistedon24dinarsperannum(Clarke,2015).

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2.1.1 SilkRoad

Alittleinsightintotheworldoftheancienttradeiscrucialforunderstandingthe

merchants`incentivesfortrading.Inthecontextoflogistics,thefamousSilkRoadis

reviewedhere.Judgingbytheroad’sname,silkwasthemainandmostvalued

commodity.Thankstoitslittleweight,compactness,enormousdemandandhigh

price,itwasidealfortradeandlong-distancetransportation.Mainlythegoods

movedfromtheEasttotheWest.However,caravansrarelytraveledallthewaydue

tosecurityreasons.Therefore,throughouttheroutecitieswithbigmultilingual

bazarsemerged.Thegovernorsofthesecitiescollectedtaxforasafepassageand

participationinthebazar.

ThegreatestvalueoftheSilkRoadwastheexchangeofculture.Ideasrelatedtoart,

religion,philosophy,technology,language,science,architectureandeveryother

elementofcivilizationwereexchangedontheSilkRoadalongwiththecommercial

goods.

ThelessonlearntfromtheinsightofSilkRoadisthattradeisacrucialpartofthe

world’seconomyandhumancivilization.SilkRoadprovidesagreatexamplewhere

informationtraveledalongwiththematerialflow.Thegreatestsourceofknowledge

wasbooks.WiththeintroductionoftheInternet,weenteredintoaneweraoftrade

wherenewrulesemerge.Withtheintroductionofe-commercetechnologies,agap

betweentheinformationalandmaterialflowemerged.

2.1.2 ModernTrade

Moderninternationaltradeistiedtotheeconomiesofcountrieswillingto

participateinglobaltrade.Thewell-beingofsomecountriesishighlydependenton

tradingactivitiesthatthecountriesareperforming.Theprinciplesofthemodern

internationaltradewerecreatedduringandaftertheSecondWorldWar.Duringthe

SecondWorldWar,severalcountriesbenefitedfromsellingarmorytotheiralliances.

However,mostofthegoodsweredeliveredasloans.Thus,inordertomakesure

thatthedebtswouldbepaidoff,thecountriescreatedtheInternationalMonetary

Fund(IMF)andtheWorldBankattheBrettonWoodsConferenceinJuly1944.

Moreover,theysignedtheGeneralAgreementonTariffsandTrade(GATT)atan

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internationalconferenceinGenevainOctober1947.Inadditiontothat,the

countriesthathadlostthewarhadtobecontrolledandtoldwhattheycouldand

couldnotdo.

In1995,theWorldTradeOrganization(WTO)replacedGATT.Accordingtothe

officialwebsite,theWorldTradeOrganization(WTO)istheonlyinternational

organizationdealingwiththeglobalrulesoftradebetweennations.Itsmainfunction

istoensurethattradeflowsassmoothly,predictablyandfreelyaspossible.

Forcountriesthathaveadoptedtheinternationaleconomicpoliciespromoting

greatertradeandinvestment,suchasjoiningtheWTOorreducingtradebarriersby

bilateralagreements,evidencesuggeststhatthishasinfluencedonrapideconomic

growthandincome.Forexample,accordingtotheOfficeoftheU.S.Trade

Representative,from1994to2000increasedexportsaccountedforapproximately

one-fifthoftheU.S.economicgrowth,andnearlyone-thirdoftheU.S.growth

between1992and1997.Forthedecadeendingin1999,theOrganizationfor

EconomicCo-operationandDevelopment(OECD)reportsthatcountriesthatare

“moreopen”achieveddoubletheannualaveragegrowthofothercountries.Even

developingcountrieshavebenefitedfromthegreaterinternationaltradeand

investmentastheCouncilofEconomicAdvisersreportedin1999:

Datafrom1974-1985and1986-1992showdevelopingcountries

withinward-orientedeconomicpoliciesexperiencinglessannual

growthofGDP(GrossDomesticProduct)percapitathanthosewith

outward-orientedeconomicpolicies.

Governmentsandtheimport/export,shipping,logisticsandtransportcommunities

haveestablishedanexhaustive,butbynomeanscomplete,rangeofagencyand

country-specificregulatoryandoperationalrequirementsforinternationaltrade.

Internationalproductionfragmentationbecamerealisticwiththeinceptionofthe

informationandcommunicationstechnology(ICT)revolution,whichenabledthe

coordinationofspatiallydispersedcomplextasksatarelativelylowcost.Inother

words,theinformationflowhasincreasedthespeedanddecreasedthecost.

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Theinadequateandinappropriateusageofe-commercetechnologiesaffectsthe

developmentoftheinternationaltrade.Thedevelopmentofinstrumentationthat

allowsevaluatingtheperspectivesandopportunitiesoftheapplicationofe-

commercetechnologiesisanimportantpreconditioninthedevelopmentof

internationaltrade.Solutionswhichareorientedtotheefficiencyofthe

internationaltradeandtheincreaseofcompetitionusuallyexploitinonewayor

anothertheopportunitiesprovidedbye-commercetechnologies.

2.2 E-commerce

Theterme-commerceisquitebroad,butthedefinitionisgivenalongsidethecontext

oftheresearch.Inthebeginning,ahistoricoverviewispresented.

Thefundamentofe-commerceistheInternet.TheoriginsoftheInternetgobackto

the1960slongbeforethedaysofthemoderne-commerce.Thepredecessorofthe

Internet,APRANETwasestablishedasaresearchnetworklinkingonlyafewresearch

institutionsintheUSA.(Andrews,2013)

ThecommercialuseoftheInternetwasonlyallowedfromtheearly1990.Thus,itis

agreedthattheevolutionofe-servicesstartedaroundthattime.Amongthefirst

largecommercialpartiestakingadvantageoftheInternetpossibilitieswereDell,

CiscoandAmazon.Afewyearslater,however,manybusinessorganizationswere

attemptingcommerciallyontotheInternet,leadingtoanescalationofe-commerce.

ThefirstwaveofE-commercewasalittlemorethana“pamphlet”withstatic

homepages.Thisprovidedthebasicfunctionofdeliveringcontentandcontactsto

thecustomers.ThesecondwaveofE-commercewasabletohandletransactions

electronically,suchasbuyandsellfunctions,overtheInternet.Itwasamajor

milestonebecausethereweremanyissuesregardingthesecurityofpayments.The

firstcompanythatmanagedtoofferasecurepaymentmethodwasPAYPAL.

(GrabianowskiandCrawford,2005).ThethirdwaveofE-commercewasdesignedto

integratewiththecustomers,suppliers,businesscommunitiesandother

stakeholdersinrealtimeforsharingandexchanginginformation(Fingar,2000).

15

E-commerceincludesanypracticeofelectroniceconomicactivities,suchasWeb

services,orevenmerelyapresenceofwebinformationwiththepossibilityofleading

totransactionswiththehelpoftelephoneandfaxmachines(Coffee,1998;Riggins

andRhee,1998;Riggins,1998).Thisunderstandingofe-commerceisquiteoutdated.

ThisstudysupportsthefollowingdefinitionofE-commerce:

…E-commercecanbedefinedastheuseofelectronicnetworked

computer-basedtechnologytobringnewproducts,services,or

ideastomarket,andsupportandenhancebusinessoperations…

RobandCoronel,2009

Theonlyadditionisthatmobile-basedtechnologiesarealsopartofcomputer-based

technologies.

IndustryorganizationsupportersandtheeconomicefficiencytheorysuggestthatE-

commerceisabletoreducethetransactioncostsandsearchcosts(Kalakotaand

Whinston,1997;Tapscott,2000;JanssenandSol,2000).Itwillfurtheracceleratethe

shiftofpowertowardthecustomers,whichwillleadtoperfectcompetition,and

thereforereducetheoverallprofitabilityofthefirmsandtheindustryasawhole

(Slywotzky,2001;Porter,2001).

2.2.1 ClassificationofE-commerceModels

Thereareseventypesofbusinessmodelswheree-commerceispresent(seeTable2)

(RayportandJaworski,2001;Kinder,2002).

BusinesstoBusinessandBusinesstoCustomerarethekeymodelsinmostofthe

markets.CustomertoBusinessandCustomertoCustomerareconsumer-centered

models.Customer-to-Businessreferstocaseswhereindividualsareformingbuyer

groupsforbetterbargainswithonlinesuppliers,e.g.onlinecoursesandtravelling

tickets.Customer-to-Customerreferstoacommunityformedtopursuespecial

interestswheretheyexchangeideas,servicesandproductsasindividuals.For

example,tori.fianddifferenttopicorientedforums.Thelastthreegroupsreferto

governmenttransactionsamongbusinesses,otherauthoritiesandconsumers.

16

However,somescholarsincludeBusiness-to-GovernmentintotheBusiness-to-

Businesscategory.Thegovernmentisassociatedwithabusinesscontractor.This

researchmakesthisassumptionandincludesB2GintotheB2Bcategory.

Table2.ClassificationsofE-CommerceModels.(RayportandJaworski,2001;Kinder,2002)

TypesofE-commerceModels Description

B2B–Business-to-Business Estimatedabout75%ofE-commerce

B2C–Business-to-ConsumerMainlyforhomeshopping,banking,on-linebrokerage,travel.

C2B-Customer-to-BusinessC2Breferstoagroupofindividualsformingasabuyergrouptotransactactivitieswithbusinesses,e.g.Marcata.com,voxcap.com

C2C-Consumer-to-ConsumerOn-linecommunityforresearch,salesoranyotherexchange,e.g.tori.fi

B2G–Business-to-

GovernmentTenderingviaE-commerce,Customsdeclaration

G2G–Government-to-

GovernmentElectronicGovernment,On-lineschool,GlobalICTplanningandimplementation

G2C–Government-to-

Consumer

Electronicvotes,TravelinformationKiosk,

Electroniclicensesrenewal

Thisstudyfocusesonthefirsttwomodels:B2BandB2C.Thereasonforthisisthat

thesetwomodelshavethegreatestimpactonthemarketsand,hence,onglobal

trade.

2.2.2 E-commercelogistics

Thegrowthofe-commercehasaprofound impactonthetraditionalsupplychains,

wheretheinformationalandmaterialflowswerecombined.Inthecaseofe-

commerceoperations,theinformationalandmaterialflowsaredividedbutoperated

dependently.Thischangesthesupplychainfroma“push”toa“pull”process.The

physicalplaceswherethischangeisfeasiblearethedistributioncentersor

17

warehouses.Theywerepreviouslystructuredtohandlelargeandprearranged

shipmentsatfixedtimestofixeddeliveryaddresses.Thekeyfactorisnowadirect

deliverytotheconsumers(B2C)and,assuch,thefulfilmentofconsumer

requirements.

Nowconsumersareplacingtheirindividualorderswhichhavetobeprocessed

directlybythedistributioncenter.Duetothischange, thenumberofordersinthe

distributioncenterhasincreasedsubstantially.Moreover,eachorderusuallyconsist

ofsmallamountofproducts,whichinturnaffectstheoverallorderlinesparameters.

2.2.3 E-fulfilment

Ine-commerce,thedistributionprocessisnolongerjustanefficientlogistics

operation,butalsoameanstosupporttheexpectationsofthecustomer.The

Internetgivesanoptiontochangethedecisiontothecompetitor’ssidequickly.

Thus,itisimportanttomeetthecustomers’expectations.

Thus,E-commerceischangingthecommercialchannelintoadistributioncenter.As

aresult,reliablelogisticsservicesaremoreimportantthanever.Errorsinthe

logisticsprocesswillhaveadirectimpactontheconsumerandlateronanyother

follow-uppurchases.

Inordertomeetconsumerexpectations,manysupportingactivitieshavetobe

implemented.Theseincludeservicesthataddvaluetotheproducts,control

shipmentsorfulfiladministrativeduties.Theseservices,generallyreferredtoas

“ValueAddedLogistics”(VAL)and“ValueAddedServices”(VAS),havealready

increasinglybeenimplementedinthetraditionaldistributioncenters,particularly

whenitcomestointernationaloperations.Suchadistributioncenterwithahigh

levelofVAL/VASactivitieshasbeennamedaLogisticsServiceCentre.Ine-

commerce,however,thescopeandintensitywithwhichVALandVASareneeded

areofadifferentmagnitude.Thedirectimpactoncustomersatisfactionandsales

performanceisthemainreasonforthis.Theresultistheemergenceofanenhanced

typeoflogisticsserviceoperation,callede-fulfilment.Thee-fulfilmentcenter

distinguishessuchadditionalprocessesincomparisontoabasicdistributioncenter

andthetraditionallogisticsservicecenterwhereVALandVAShavealreadybeen

18

implemented.Theapplicationreceivingmostoftheattentionforreal-time

enterprisesisthesupplychain.Forexample,HermesFulfilment,acompanythat

providesE-fulfilmentsolutionsforRussianconsumers,hasinstalledareal-time

enterprisesoftwarepackageforreal-timesupplychaintracking.HermesFulfilment

usesareal-timesystemfromYantraInc.tomovedataacrosspaymentprocessing,

authorizationandsettlementsystemsandtriggeralertsifpackagesdonotarriveat

theirdestinationaspromised.Inaddition,thissystemprovidesanopportunityto

followthereversesupplychaindirection.

2.2.4 E-commercebarriers

Complicatedcustomsclearanceproceduresaregeneraldifficulttoallinternational

trade.However,theycanbeevenmoreproblematicforB2Ce-commercetradersas

theysendmanysmallconsignments.Thesecompaniesareoftensmallbusinesses

and,asaresult,theyaremoresensitivetothecustomsclearancecosts.Some

companieshavestatedthatcustomsprocedureshavecontributedtotheirdecisions

nottoentercertainmarkets.

AccordingtoDIST(2005),thefactorsthattendtoinhibittheadoptionofinformation

andcommunicationtechnologiesinproductioninclude:

•Resistancefrommanagement

•TightprofitmarginswhichmakeitdifficulttofundinvestmentinanIT

infrastructure

•LackofITawareness

•Lackofemployeeeducationandtraining

•Degreeoforganizationalchangerequired

•AbeliefthattheindustryisdoingwellwithoutIT

Corruptionisamajorproblemintheinternationaltradeaswell,ofteninrelationto

thecustomsprocedures,anditrelatestoanythingfrombriberytothedisappearance

ofitems.Anincreasingnumberofbusinessesbelievee-commercetobeparticularly

19

sensitivetocorruption,asitisoftenmanysmallconsignmentsthatareshipped,

whichareeasiertolose,andsmalle-commercecompaniesoftendonothaveenough

employeestofollowupalltheproblems.

Lackofstandardsisgenerallyviewedasanimpedimenttothetraditionaltrade,and

thesameappliestoe-commerce.Thisimpedestheadoptionofvariousonline

solutionsandmakestheuseofe-invoicesdifficult.

2.3 SupplyChainandWarehouseManagement

2.3.1 SupplyChainManagement

Beforeglobalizationforcedcompaniestodesigntransportationtechnologies,

countriesproducedmostofwhattheyconsumed.Bairoch(1990)givesanexampleof

afeasibleimpactoffeasible(material)innovationsonglobaltrade.However,

efficientSupplyChainManagementisanonmaterialwaytoincreasetheproductivity

oftradingoperations.

KeithOliverfirstcoinedtheterm“supplychainmanagement”in1982(Heckmann,

Shorten,andEngel,2003).However,theconceptofasupplychaininmanagement

hadbeentherelongbefore.Thisstartedalreadywiththecreationoftheassembly

line.Backthen,organizationspaidattentiontointernaloperationsonly.Therefore,

thesupplychainofthateraneededchangestowardstheglobalapproachaswellas

re-engineeringandcostreductionprograms.Indecadessince,SCMhasreceived

considerableattention,initiallystartingwithinthebusinesscommunity.Fromthe

early1990s,academicresearchstartedfollowingsupplychainsandtriedtoestablish

sometheoreticalstructure(ChenandPaulraj2004).

ThedefinitionofSupplyChainManagementaccordingtoHarald(1996)isthe

managementofanetworkofinterconnectedbusinessesinvolvedintheultimate

provisionofproductandservicepackagesrequiredbyend-customers.The

companiesororganizationsthatparticipateinthesupplychainare“linked”together

throughmaterialandinformationflows.Materialflowinvolvesthetransformation,

movementandstorageofgoodsandmaterials.Informationflowallowsthevarious

20

supplychainpartnerstocoordinatetheirlong-termplansandtocontroltheday-to-

dayflowofgoodsandmaterialupanddownthesupplychain(Handfield,2011).

Figure3showsthefivebasiccomponentsofSCM.

FIGURE3.FivebasiccomponentsofSupplyChainManagement

Plan.Aplanorstrategymustbedevelopedtodesignthewayagivengoodorservice

willmeetcustomers’requirements.Asignificantportionofthestrategyshouldfocus

onplanningaprofitablesupplychain.

ThisisthestrategicportionofSCM.Companiesneedastrategyformanagingallthe

resourcesthatgotowardmeetingcustomerdemandfortheirproductorservice.A

bigpieceofSCMplanningisdevelopingasetofmetricstomonitorthesupplychain

sothatitisefficient,costslessanddelivershighqualityandvaluetocustomers.

Develop.Itinvolvesbuildingatightrelationshipwithkeysuppliers.Thisphase

involvesnotonlyidentifyingreliablesuppliersbutalsoplanningmethodsfor

shipping,delivery,andpayment.

Companiesmustchoosesupplierstodeliverthegoodsandservicestheyneedto

createtheirproduct.Therefore,supplychainmanagersmustdevelopasetofpricing,

deliveryandpaymentprocesseswithsuppliersandcreatemetricsformonitoringand

improvingtherelationships.Andthen,SCMmanagerscanputtogetherprocessesfor

managingtheirgoodsandservicesinventory,includingreceivingandverifying

shipments,transferringthemtothemanufacturingfacilitiesandauthorizingsupplier

payments.

Make.Atthethirdstage,productismanufactured,tested,packaged,andscheduled

fordelivery.Thisisthemanufacturingstep.Supplychainmanagersschedulethe

21

activitiesnecessaryforproduction,testing,packagingandpreparationfordelivery.

Thisisthemostmetric-intensiveportionofthesupplychain-onewherecompanies

areabletomeasurequalitylevels,productionoutputandworkerproductivity.

Deliver.Then,atthelogisticsphase,customerordersarereceivedanddeliveryof

thegoodsisplanned.Thisfourthstageofsupplychainmanagementstageisaptly

nameddeliver.

ThisisthepartthatmanySCMinsidersrefertoaslogistics,wherecompanies

coordinatethereceiptofordersfromcustomers,developanetworkofwarehouses,

pickcarrierstogetproductstocustomersandsetupaninvoicingsystemtoreceive

payments.

Return.Duringthisstage,customersmayreturndefectiveproducts.Thecompany

willalsoaddresscustomerquestionsinthisstage.

Thiscanbeaproblematicpartofthesupplychainformanycompanies.Supplychain

plannershavetocreatearesponsiveandflexiblenetworkforreceivingdefectiveand

excessproductsbackfromtheircustomersandsupportingcustomerswhohave

problemswithdeliveredproducts.

Amainissuethatsupplychainstriestosolveisthatthesebasiccomponentsfrom

differentorganizationshavetoworktogethersmoothly.Manyorganizationsina

supplychainhavetheirownobjectivesandtheseareoftenconflicting.Supplychain

managementisastrategythroughwhichdifferentfunctionsalongthesupplychain

canbeintegrated.

ThepurposeofSCMistocoordinatetheactivitiesofvariousplayersinthechain.

AccordingtoCooperandEllram(1993),asupplychainmanagementisawell-

balancedandwell-practicedrelayteam.Suchateamismorecompetitivewheneach

playerknowshowtobepositionedforbetteroverallperformance.

Toensurethatthesupplychainisoperatingasefficientaspossibleandgenerating

thehighestlevelofcustomersatisfactionatthelowestcost,companieshave

adoptedSupplyChainManagementprocessesandassociatedtechnology.Supply

22

ChainManagementhasthreelevelsofactivitiesthatdifferentpartsofthecompany

willfocuson:

• strategic

• tactical

• operational

Strategic.Atthislevel,companymanagementwillbelookingtohighlevelstrategic

decisionsconcerningthewholeorganization,suchasthesizeandlocationof

manufacturingsites,partnershipswithsuppliers,productstobemanufacturedand

salesmarkets.

Strategicactivitiesincludebuildingrelationshipswithsuppliersandcustomers,and

integratinginformationtechnology(IT)withinthesupplychain.

Tactical.Tacticaldecisionsfocusonadoptingmeasuresthatwillproducecost

benefitssuchasusingindustrybestpractices,developingapurchasingstrategywith

favoredsuppliers,workingwithlogisticscompaniestodevelopcosteffect

transportationanddevelopingwarehousestrategiestoreducethecostofstoring

inventory.

Benchmarkingandmakingdecisionsregardingproductionanddeliverywouldfall

underthetacticalcategory.

Operational.Decisionsatthislevelaremadeeachdayinbusinessesthataffecthow

theproductsmovealongthesupplychain.Operationaldecisionsinvolvemaking

schedulechangestoproduction,purchasingagreementswithsuppliers,takingorders

fromcustomersandmovingproductsinthewarehouse.Theoperationalcategory

includesthedailymanagementofthesupplychain,includingthemakingof

productionschedules.

Enteringintoanewera,SCMisinaneedforITsolutionsforsupportingdecision-

makingoneachlevel.

23

Foroperationaldecisions,thesystemmustbeabletohandleday-to-daytransactions

ande-commerce.Acrossthesupplychainandprovideinstantinformationonorders

anddailyscheduling.

Formid-termdecisions,thesystemmustfacilitateplanninganddecisionmaking,

supportingthedemandandshipmentplanningandmasterproductionscheduling

neededtoallocateresourcesefficiently.

Forstrategicvalue,thesystemmustprovidetools,suchasanintegratedsupplychain

networkmodel,thatsynthesizedataforuseinhigh-level"what-if"scenarioplanning

tohelpmanagersevaluateplants,distributioncenters,suppliers,andthird-party

servicealternatives.

2.3.2 SupplyChainInnovation

AstheSCMmaturesandmarketsbecomemoreglobal,innovationsinthisindustry

arebecomingmorechallenging.Nevertheless,thereareseveralsuccessfulexamples

ofmulti-nationalcorporationsthatgainbenefitsandmaintaintheircompetitiveedge

duetoefficientSCMs.SomerepresentativesofindustrypractitionersincludeProcter

&Gamble(P&G),Wal-Mart,Coca-Cola,HewlettPackard,Cisco,IBM.Themarketfor

SCMkeepsgrowingduetothemergersamongcorporations,newe-commerce

virtualenterprises,change/expansionincompanyfocus,newcustomerdemandsand

globalcompetition(Wailgum,2007).

ThenecessitytoreengineertheseissueswasrelievedbyimplementingICTsolutions.

ElectronicDataInterchange(EDI)isthecomputer-to-computerexchangeofbusiness

documentsinastandardelectronicformatbetweenbusinesspartners.

Computer-to-computer–EDIreplacespostalmail,faxandemail.Whileemailisalso

anelectronicapproach,thedocumentsexchangedviaemailmuststillbehandledby

peopleratherthancomputers.Havingpeopleinvolvedslowsdowntheprocessingof

thedocumentsandintroduceserrors.Instead,EDIdocumentscanflowstraight

throughtotheappropriateapplicationonthereceiver’scomputerandprocessing

canbeginimmediately.AtypicalmanualprocessshowedonFigure4,withlotsof

paperandpeopleinvolvement.

24

FIGURE4.ManualEDIDocumentExchange(Source:OpenTextGXS)

Figure5showstheEDIprocess—nopaper,nopeopleinvolved

FIGURE5.EDIDocumentExchange(Source:OpenTextGXS)

ThemostcommondocumentsexchangedviaEDIarepurchaseorders,invoicesand

advanceshipnotices.BecausecomputersmustprocessEDIdocumentsratherthan

humans,astandardformatshouldbeimplemented,sothatdifferentplatformscould

exchangeinformationflawlessly.ThereareseveralEDIstandardsinusetoday,

includingANSI,EDIFACT,TRADACOMSandXML.ThemostcommonstandardisXML,

whereXMLstandsforExtensibleMarkupLanguage.MainfunctionofXMLwas

25

describedabove.However,XMLsupportsextrafeatures,suchasencodingand

translationofdata.Additionally,XMLstandardsupportslesssophisticated,Internet

basedapplications.Thisfeatureisgreatforsmallercompanies,whocannotafford

completeEDIsolutions.

Chabrow(2000)givesseveralinterestingexamplesofhowsupplychainsareworking

atgloballevelbyusingamixtureofEDIandXMLtechnologies.Aspecificexampleis

theLucentTechnologiesMicroelectronicsGroup`ssupplychainsystemthatcould

deliversiliconchipshalfwayaroundtheworldin2days.ThisSCMwasdevelopedin

collaborationwithDHL–aglobalshippingcompany.AnotherexampleistheStride

RiteCorp.,a$573millionretailerofathleticandcasualfootwear.ThisSCMcutbya

thirdthetimeittakestoshipshoesfromAsiatoitsdistributioncenterinLouisiana,

Kentucky.Theretaileralsocutitstransportationcostby30%andinventory

turnaroundtimeby25%.Thus,lessmoneyistiedupininventoryandisfreedupfor

otherpurposes.ThiswasaccomplishedbyusinganInternet-basedpackagethatuses

XMLforoverseasdealers.Thissupplychainmanagementsystemkeepstrackof

shipmentsandassemblyoperationsfromChinatothewarehouseinLexington,

Massachusetts.

Themaincharacteristicsoftheseglobalsupplychainsystemsare:

• Web-basedviewingandmanipulationofinformationatallstagesinthe

supplychain

• HeavyuseofEDItechnologybetweenestablishedlargescaletradingpartners

• UseofXMLtoexchangedatabetweenlesstechnologicallysophisticated

overseaspartnersthatlacktheresourcestohandleEDI

Anotherchallengeformodernsupplychainmanagementistheomni-channel

approach.Channelsrepresentthewaysofinteractionbetweensupplierand

customer.Omni-channelapproachmightbeusedinseveralareaswithinthe

company.Forexample,inmarketing,distributionorretail.However,theconceptof

thisapproachincustomeroriented.Customerexperiencesservicesfromdifferent

channelsasone.

26

Figure6showsthedifferenttypesofchanneling.

FIGURE6.Exampleofchanneling.

ThegreatexamplewouldbeanAliexpress.AliexpressisaChineseanalogofAmazon.

Chinesemanufacturesandsellersareusingthisplatformtofindandselltheir

productsabroad.Recently,Aliexpresslaunchedmobileapplicationwiththesame

setsoftoolsasonthewebsite,e.g.ordering,tracking,andcustomerservice.

Basically,therearetwochannels,howevercustomersfeelthatheisjustusing

Aliexpress`sservices.

2.3.3 WarehousemanagementandInnovation

Warehousinghistorybeginsfromtheestablishmentofseatraderoutesbetween

Europeandothercontinents.Increasingamountoftradingcommoditiesrequiredto

buildstoringfacilities.Laterwiththeinventionofsteampoweredtrains,warehouses

infiltrateddeeperintothecontinent.

Twentiethcenturywascrucialperiodinwarehousingdevelopment.Inlate20sand

early30s,firstpalletwasintroduced.Laterin50swhen,mass-productionofforklifts

started,palletsbecameessentialintransportationandhandlingoperations.Inthe

endofthecentury,warehousemanagementsystemshelpedtoabandonpaper-

intensivewarehousecoordination.Instead,ITsolutionsstartedperformingthese

activities.Computerbasedsolutionshelptooptimizefullspectrumofwarehouse

27

operations.Inturn,itallowedtoadjusttofluctuationindemandandtopreparefor

futurechanges.

Todaythereisahugedemandforlogisticsfacilitiesandhandlingoperations.Even

though,demandisvariable,thisissueworthexamininginthee-commercecontext.

Because,thee-commerceoutcomesarepushingexistingwarehouseoperationstoits

limits.

E-commercebusinessmodelsthatwereanalyzedintheE-commercepartofthe

reportarevaryinginsizeofoperations,productfocus,andproductvalueandretailer

model.Thesebusinessdimensionsaffectonwhichfacilitytypesandlocationsare

required.Asindividualcustomerrequirementsevolve,consistentpatternsare

emerging.Requirementsgenerallyfallintooneoffourbuckets,including:

Combinedoperations.Attheoutset,e-commercefulfillmentisamodestoperation.

Thesizeandgrowthoftheconceptisonlyinitsearlystages.Therequirementcan

residealongsidein-storedistributionwithinasinglelogisticsfacility,leveraging

existingsupplychaininvestments.However,combinedoperationsareanadhoc

approach thattypicallydoesnotscalewellasthee-commercefulfillment

requirementexpands.Forpure-playonlineretailers,theearly-stagerequirement

typicallytakestheformofleasedspacewithinmultitenantfacilities.

Sharedfacilities.Asdemandgrows,e-commercefulfillmentcanbecome

cumbersomeandexpensivewithinsmall andsharedfacilities.Many3PLsbring

existingphysicalinfrastructureandhavethespecializedcapabilitiestogrowthee-

commercefulfillmentrequirement.

Dedicatedfacilities.Oncethee-commercerequirementreachesscale,fulfillment

mayrequireoneormultiplededicatedfacilities.Initially,asinglefulfillmentcenter

mayserve,oftenincentralizedlocations.Retailersusingthismodelrecognizethat

onlinefulfillmentanddistributiontostoreshavedistinctneedsandchallenges.This

strategyisparticularlyrelevantformidsizeandlargerretailers,whohavethescaleto

separatestand-alonein-storedistributionandonlinefulfillment.

28

Distributedfulfillment.Asthee-commerceconceptgrows,andfulfillment

requirementsincrease,multiplefacilitiesareneeded.Atthisscale,retailerspursuea

disseminatedfulfillmentstrategy,usingmultiplefacilitiesandlocatingclosertotheir

customers,suchasweseetodaywithlargerretailers.Thebenefitsofthisapproach

arefasterdeliverytimes,moreresponsiveserviceandlowertransportationcosts.

Alibaba,biggestChinesee-commerceplayer,issearchingforstorageinRussian

facilities.Inordertodeliverbestsellerinthesameregioninshortertime.(Korotkin

andHachataryan,2015).

Intheformer,wherepurchaseditemsaretypicallydistributedviaapostalorparcel

network,e-commercelogisticsmodelshaveledtoawaveofnewdemandforthree

distincttypesoflogisticsfacilities:

• Megae-fulfillmentcenterswherethemerchandiseisstockedandpickedat

itemlevel.Thesefacilities,whichareeitheroperatedbytheretailerora

logisticsserviceprovider.

• Parcelhub/sortationcenterswhichsortorders

• Parceldeliverycenterswhichhandlethe‘lastmile’deliverytothecustomer

(R-kioski,Matkahulto)

Theproductscannolongerbestoredonpallets,butaremostlykeptincratesor

boxes,oronshelves.Theproductsmustbereadilyaccessiblefororderpicking,soa

floorlocationispreferredabovestorageinracks.Theresultisastrongreductionin

thestockdensity,comparedtotraditionalstoragesolutions.

3 LiteratureAnalysis

Theliteraturereviewisanimportantpartofthequalitativeresearch.Intheprevious

chapter,theoreticalbasisprovidedanunderstandingofresearchtopicdevelopment.

Theliteratureanalysisissupportingtheinductionmethodapproach.Ithelpsto

identifypatternsinthedata.Thedatafortheliteraturereviewwascollectedusing

searchenginesforscholars.Forexample,nelliportaali.fiandscholar.google.com.In

addition,articlesfromwell-knownpublishers,suchasForbes,NewYorkTimes,

29

Bloombergetc.werereviewed.SearchedconductedintwolanguagesEnglishand

Russian.

Followingkeywordswereusedtogetfindrelevantliterature:

• E-commerce

• Logistics

• E-commerceinInternationalTrade

• E-commercebarriers

• SupplyChainManagement

• E-business

• Warehouseinnovations

• Etc.

TheanalysiswasperformedaccordingtoJ.L.Galvan`s(2006)guidelinefeaturedinhis

book“Writingliteraturereviews”.Mainpointsoftheguidelinearefollowing:

• Groupthearticlesbycategories.

• Takedetailednotesoneacharticle.Usingthesameformatforallarticles.

o Inthisresearchformatconsistedoffollowingnotes:

§ Articletitle

§ Authors’names

§ Publicationyear

§ Mainpointofarticle

• Lookforexplicitdefinitionsofkeyterms.

• Lookforkeystatistics.

• Lookformethodologicalstrengthsandweaknesses.

• Distinguishbetweenanauthor’sassertionsandevidenceinsupportofthe

assertions.

• Identifyrelationshipsamongstudies.

• Notehowcloselyeacharticlerelatestothetopic.

ThelistofresearchedliteraturewithnotesshowninAppendix1.

30

Theanalysisoftheliteraturesynthesizedthereviewintoseveraltopics.Thesetopics

formtheessenceofthetheorydevelopment.Manyarticlesrelatedtoe-commerce

studymodernbarriers,thatthebusinessesmeet.TheSwedishNationalBoardof

Tradestudiedtheissuesrelatedtoe-commerceactivityofnon-EUcountries.Mainly

theiroutcomeswerefocusedontheGovernmentinfluenceinE-commerceactivities.

Identifiedrisksassociatedwiththelackofinformation,focusesontheauthorities.

…lackoftransparencyintheinformationprovidedbythe

authoritiesineachofthesecountrieswithregardtothelabellingof

productsandtherulesofconsumerinformation…

E-commerceispushingauthoritiestodesignregulationsthatwillhelptodissolve

barriersformaterialandinformationalflows.

ThereisanevidencethatE-commerceisshapingsupplychainoperationsofmany

organizations.IntheB2Csector,deliverycompaniesaredemonstratingnewshipping

options.UPSandRoyalMailintroducedtheSundayDeliveryoptionintheselected

areas,inordertofulfillthedemandononlineshopping.Anothertrendappearing

acrossseveralarticlesemphasizedtheroleofglobalcorporationsinimplementing

newsolutions.OliverWyman,business-consultingfirm,providedstatisticson

internationalorganizationthatlaunchedthe“same-day”deliveryservice.

InB2Bsector,thedeliveryoptionsarerevisedaswell.Rollingwarehouseisasolution

thatisdescribedbyLeeandWhang(2001).Makingchangestoorderwithout

deliverytimerestrains,achievedbyrefrainingfromspecifyingquantitiesinadvance.

Thus,productonthetruckarenotpre-assignedtoadestination.Decisionis

postponedtothetimeofunloading.Sincematerialflowismoreexpensive,

substitutingitwithinformationalflowisgenerallygoodidea.

E-fulfilmentisthenextactivity,thathasitsinfluence.Increasingdemandand

customer’sexpectationsareresultingdevelopmentofmegae-fulfillmentcentersand

sortingcenters.Thesenewcenterswillimplementnewautomationsolutions,which

decreasesthepicktoordertimeandmistakeprobability.

31

4 Interviews

Interviewsaretheprimarydatacollectingtechniqueinqualitativeresearch.Inorder

toprovideanoverviewonthecurrentsituationinresearchedtopic,theresearcher

interviewedseverallogistics,productionandretailcompanies.

FIGURE7.Currentsituationisanalyzed.

Interviewsaresupportingoutcomesoftheliteraturereview,byinvestigatingcurrent

situationinSupplyChainManagementandWarehouseManagement.Inaddition,

interviewshelptoforeseefuturetrends.

Inthefollowingchapterdifferenttypesofinterviewingmodelspresented,

preparationdiscussedandinterviewsanalysisdone.

4.1.1 Qualitativeinterviewtypes

Therearethreemaintypesofinterviews,whichsupportsqualitativeresearch

method:

• Structured

• Semi-structured

• Unstructured

32

Structuredinterviewsconsistofasetofquestionspreparedinadvance.Data

collectedbyconductingthistypeofinterviewisassumedwithhighlevelofvalidity.

Eachintervieweeisaskedthesamesetsofquestions,andtherefore,therearefewer

chancesforfavoritismsorprejudices.(Cohen,2006).

Unstructuredinterviewsdonothaveanypre-determinedspecificdirection.Thistype

ofinterviewusuallyisconductedinaninformalmanner.However,thereisagreat

potentialforbias,andthereforethistypeofinterviewslackreliabilityfromresearch

perspectives.Nevertheless,datacollectedthroughunstructuredinterviewfromthe

respectedsource,mayprovideagreatinsight.(Rubin,2005;Cohen,2006)The

importanceisonobtainingthoroughknowledgeandauthenticityofpersonal

experiences(GubriumandHolstein,2001).

Semi-structuredinterviewscombineboth,structuredandunstructuredinterviews

elements.Interviewerneedstopreparemainquestionsinadvance,tocover

necessarytopicsduringtheinterview.However,follow-upquestionscanbeaskedin

interviewsinordertoclarifysomepointsstatedbyinterviewees,ortoclarifyany

otherrelatedpoints.(Rubin,2005;Cohen,2006)Thistypeofinterviewallowsforthe

explorationofup-and-comingtopicsandideasratherthanrelyingonguidelinesand

questionsdefinedinadvance.

4.1.2 Preparation

Studyrequiredlatestdatatotheresearchedtopicinadditiontotheknowledgeand

experienceofdevelopment.Basedontheseobjectives,semi-structuredand

unstructuredinterviewswereselected.

Certainpatternhasemergedfromliteraturereview.Nevertheless,interviewswere

preparedandconductedinawaytoavoidanybiases.AsMilesandHuberman(1994)

pointout:

Fromthebeginningofdatacollection,thequalitativeanalystis

beginningtodecidewhatthingsmean,notingregularities,

patterns,explanations,possibleconfigurations,causalflowsand

propositions.Thecompetentresearcherholdstheseconclusions

33

lightly,maintainingopennessandskepticism,buttheconclusions

arestillthere,inchoateandvagueatfirstthenincreasinglyexplicit

andgrounded.

AccordingtoBernard(1988),theinterviewershouldhaveapaper-basedinterview

guidethatheorshefollows.Sincesemi-structuredinterviewsoftencontainopen-

endedquestionsanddiscussionsmaydivergefromtheinterviewguide,itisgenerally

besttotape-recordinterviewsandlatertranscriptthesetapesforanalysis.(Bernard

1988)

Basedontheliteraturereviewoutcomestheguidelinewithmainquestionswas

developed(seeAppendix2).Thisguidelinehelpstostayonthemaintopicduringthe

interview.Inaddition,thereisspaceforfollow-upquestionsnotesandpre-

determinedanswersforeasingtheinterviewingprocess.Theguidelinewas

developedaccordingtotheCohen`s(2006)vision:

Theinclusionofopen-endedquestionsandtrainingofinterviewers

tofollowrelevanttopicsthatmaystrayfromtheinterviewguide

does,however,stillprovidetheopportunityforidentifyingnew

waysofseeingandunderstandingthetopicathand.

Inthebeginning,itwasassumedthattheinterviewswouldbeheldinavideoformat

withtherepresentativesofinternationalcompaniessuchasDBSchenker,Maersk.

However,therewereissuescontactingrepresentativesandreceivingfeedback.

Duetotimeandtravellimitations,interviewswereperformedinawaytododge

thoseissues.Inaddition,Beiske(2007)warnsthatsemi-structuredinterviewsare

bestwhenyouhaveonlyoneopportunitytohaveaninterview.Therefore,itwas

decidedthatthebestsolutionistovisitprofessionalexhibitions,wherecompanies

representthemselves.Suchfairsaregreatplaceforgatheringdatabecause

companiescomethereforbenchmarkingandsharingtheirfutureperspectiveswith

thecustomers.Inaddition,duringfairs,representativesaremoreopentothe

interviews.

34

Twovenueswereselected:

• TransportationLogisticsFair“Logistiikka–Kuljetus2015”inHelsinkiheld

between11-13.06.2015

• Production,ImportandExportFair“Международнаяспециализированная

выставка«Импортозамещение»(InternationalSpecializedfair«Import

substitution»)inMoscowheldbetween15-17.09.2015

Beforeeachevent,shortlistofpotentialintervieweecompanieswasprepared.Inthe

nextsectionitisdiscussedhowtheselectionprocesswascompleted.

4.1.3 Intervieweeselection

Toensurethatinterviewssupportedtheliteratureoutcomeswithoutbiases,itwas

importanttodevelopcredibleinterviews.AccordingtoRubin(2005),thekeyfor

conductingcredibleinterviewsistofindexperiencedandknowledgeable

interviewees.First-handexpertiseandthereputationaretheessencefor

experiencedinterviewees.Casesoftheinnovativeoperationsandsuccessful

examplesofimplementingnewsolutionsthataffecttheindustryevidencethelevel

ofknowledgeoftheinterviewee.Mainrequirementofthisresearchwasthat

intervieweesoughttobesupplychainparticipants.Thus,companieswerechosen

accordingtotheirparticipationinsupplychain.

Inordertoexpeditetheselectionprocessofsuitableinterviewees,followingguide

wascreated(seeFigure8).

35

FIGURE8.Intervieweeselectionguide.

Thelistsofexhibitorsfromtheofficialexhibitionwebsitewereanalyzedusingthe

selectionguide.FollowingTable3showstheshortlistofsuitablecompanies.Listwas

compiledbydecreasingtheattractivenessofthecompanies.Informationaboutthe

companieswascollectedthroughopensources.

36

Table3.ShortListofcompaniesfromtwoexhibitions.

No. Company Description

1 3PLogistiikkaGroupOy Logisticsservicesprovider

2 AholaTransportOyAb Transportationlogistics

3 BlueWaterShippingOy Shipping

4 ConstructorFinlandOy(Kasten) Warehousingsolutions

5 DimexOy Professionalclothingretail

6 eSendFinlandOy LogisticsProvider

7 ExclusiveLogisticsFinlandOy CityDeliverySolutions

8 GEFCOBaltic SupplyChainSolutions

9 NFleetOy ITSolutions

10 TrimicoOy ITsolutions

11 UnitedParcelServiceFinlandOy SupplyChainSolutions

12 VantaanRahtikeskusOy SupplyChainSolutions

13 АВТОГАЗТРАНС,ООО(Avtogaztrans) Liquidgasproductionandtransportation

14 МЕТМАШ,ООО(Metmash) Production

15МТГ.БИЗНЕС-РЕШЕНИЯ,ООО(MTG.

BusinessSolutions)

Consultingcompany,SupplyChain

management

16 НАНОСОФТ(NanoSoft) ITsolutions

17 РИВ-ПАК(Riv-Pack) PackagingSolutions

18 САНДВИК(Sandvick) Serviceprovider

19 ТЕПЛОСТАР,ООО(Teplostar) Production

20 X5RetailGroup Retail

37

Numberofinterviewseffectsreliabilityaswell.AccordingtoBeizke(2007),10to15

semi-structuredinterviewsareenoughforaphenomenalityresearch.

4.1.4 Conductinginterviews

Cohen(2006)agreesthatsemi-structureinterviewscanprovidereliable,comparable

qualitativedata.Besides,aimofthesemi-structuredistoletinformantsexpresstheir

viewsintheirownterms.

Thefollowingthreeconditionsofvalidresearchinterviewsasspecifiedby

Hutchinson(2007)weremetduringsemi-structuredinterviews:

• Interviewershouldhaveanopenmind.Eveniftheinterviewerdoesnot

agreewithintervieweehe/sheshouldstayobjectiveandshouldnot

displaydisagreementwiththepersonalopinionsofinterviewees

regardingtheresearchquestions.

• Interviewersshouldaskquestionseffectively.Anyquestionsshouldbe

avoidedthatcouldleadintervieweestospecificanswers

• Thetimingandenvironmentfortheinterviewshouldbeeffective.

Interviewsshouldbeconductedinrelaxedenvironment,andinterviewees

shouldbefreeofanykindofpressurewhatsoever.

Beforeeachinterview,theresearcherintroducedhimselftotheintervieweeandtold

abouthisresearch.Thepermissiontorecordtheinterviewwasaskedeach

intervieweeduetoethicreasons.However,notallcompanyrepresentativesagreed

toberecorded.Inaddition,theguidelineoftheinterviewwaspresentedinorderto

easetheinterviewprocess.Somerepresentativesevenfilledtheguideline

themselves.Overall,theinterviewingprocesswentwellduringbothexhibitions.

Interviewswereconductedinaninformalmanner,sothattherepresentativesand

theresearcherfeltcomfortable.

DuringthefirstexhibitioninHelsinki,ninecompaniesfromtheshortlistwere

interviewed.Fromthesecondexhibition,fivecompanieswereinterviewed.Seethe

Table4forthefulllist.Mostoftherepresentativeswereopentotheinterview.

38

Nevertheless,someinterviewswerequickandcapaciousandsomewerealittle

lasting.

Table4.Listofinterviewedcompanies.

No. Company Description

1 3PLogistiikkaGroupOy Logisticsservicesprovider

2 BlueWaterShippingOy Shipping

3 ConstructorFinlandOy(Kasten) Warehousingsolutions

4 eSendFinlandOy LogisticsProvider

5 GEFCOBaltic Shipping/SupplyChainSolutions

6 NFleetOy ITSolutions

7 TrimicoOy ITsolutions

8 UnitedParcelServiceFinlandOy SupplyChainSolutions

9 VantaanRahtikeskusOy SupplyChainSolutions

10 АВТОГАЗТРАНС,ООО(Avtogaztrans) Liquidgasproductionandtransportation

11 МЕТМАШ,ООО(Metmash) Production

12МТГ.БИЗНЕС-РЕШЕНИЯ,ООО(MTG.

BusinessSolutions)

Consultingcompany,SupplyChain

management

13 РИВ-ПАК(Riv-Pack) PackagingSolutions

14 САНДВИК(Sandvick) Serviceprovider

15 RostekNorthEast Warehousing

16 VetnaLtd Wholesaler/Retail

Bothexhibitionswereattendedontheseconddayofopening.Unfortunately,some

ofthecompaniesdidnotexhibitonthesecondday.Somecompanieswerehardto

39

findduetothesizeofbothevents.However,inadditiontothesemi-structured

interviews,twounstructuredinterviewswereconducted.Bothofthecompaniesare

previouspracticaltrainingplacementsfortheresearcher.Nevertheless,both

companiesfulfilltheselectioncriteria.RostekNorth-Eastisacustomsservice

providerforimportersandexporters.Thecompanyhasrichexperiencein

warehousingandsupplychainmanagement.Secondcompany,VetnaLtdisthe

biggestpetretaierintheUralareainRussia.Companyhasmorethan20yearsof

experienceinretail.Todaycompanyisheavilyinvestingintowarehouseautomation

technologiesande-commerce.

Overallinterviewinggoalswereachieved.Appendix3displaysthelistofinterviewed

representatives.Appendix4showsthetranscriptsomeoftheinterviews.

4.1.5 Analysisofinterviews

Qualitativecomparativeanalysisalongwithconstantcomparisonanalysiswereused

toexaminetheinterviewdata.

Table5.Descriptionofimplementedanalysisoftheinterviews(LeechandOnwuegbuzie,2008)

No. TypeofAnalysis ShortDescription

1 Constantcomparisonanalysis

Systematicallyreducingsourcestocodesinductively,andthendevelopingthemesfromthecodes.Thesethemesmaybecomeheadingsandsubheadingsintheliteraturereviewsection.

2 Qualitativecomparativeanalysis

Systematicallyanalyzingsimilaritiesanddifferencesacrosssources,typicallybeingusedasatheory-buildingapproach,allowingthereviewertomakeconnectionsamongpreviouslybuiltcategories,aswellastotestandtodevelopthecategoriesfurther.

Interviewinganalysisprocessbasedontheframework,describedbyDr.JohnSchulzfromtheUniversityofSouthampton.Frameworkincludesfive

stages.Figure9describestheadaptedprocessofinterviewanalysis.

FIGURE9.Interviewdataanalysisprocessmap

Productofinterviewanalysisistheclassificationtree,shownonFigure10.

FIGURE10.AnalysisClassificationTree

Interviewdataanalysiswasperformedusingthequalitativeanalysistechniques.

Resultofdataanalysisistheclassificationtree.Classificationtreewasorganizedina

waythatthelowercategoriessupporttheupperones.Dataanalysisrepresentedin

threemainthemes:

• Materialflow

• Innovations

• Informationalflow

Materialflow.OutsourcingandSCMsolutionsaresubcategoriesofthematerial

flow.Manycompaniesstatedthatinordertooptimizetheiroperations,they

outsourcedsomeofthem.Forexample,BlueWaterShippingOyhassubcontracted

warehouseoperationstoapartnerwithbiggerfacilities.Itallowedthemtoincrease

theamountshipmentsthattheycouldnothandlebefore.However,thismeasureis

increasingthestressonexistingSCM.Duetonewparticipantsinsupplychain,

managementrequiressolutionstocontrolmaterialflow.Greatsolutionis

automation.Mostoftheintervieweesnoticedthattheyarelookingforwardtosee

cheaperwarehouseautomationsolutionsinthenearfuture.

GovernmentimportanceandinternationalstandardizationaresupportingRegulation

category.Companiesdonothavebigconcernsregardinggovernmentregulation.

Sinceallregulationsarethesameforcompetitors.However,companiesareeagerto

takepartinrefiningstandardsintheindustry.Forexample,Riv-Pack,thepackaging

producer,wasinterestedintheimprovementofRussianpackagesstandards.The

intervieweesaidthattheirproductiontechnologiesareontheEuropeanlevel,thus

theyhaveanexperiencetoshare.

Innovations.Thisthemeincludestheelementsofmaterialflowandinformational

flow.CompaniesseeITsolutionasnecessitytorunoperationssmoothly.Itis

recognizedthathardwareisincreasingthespeedandtherangeofdata.TrimicoOy

representativeclaimedthatsmartphonesaretheeasiestwaytobringinnovationto

thesmallcompanies.However,costsofimplementationisstillastumblingstone.An

43

unexpectedthemewas3Dprinting.Ironically,fewintervieweespredictedthat3D

printingtechnologycoulddamagelogisticsindustry.

Informationalflow.MainpartsofthistopicareAccessandCommunication.Under

theAccesssubtheme,theproblemoftheinformationavailabilityisreviewed.

RepresentativesfromVantaanRahtikeskusOyclaimedthatitwascommonthat

informationisnotattherighttimeattherightplace.Inaddition,somemighthave

accesstounnecessaryinformationthatfloodstheworkingprocess.Forinstance,

currente-mailsystemprovideshugeamountofmessagesdaily.Thereisabigchance

thattheimportantinformationwillbemissed.

Communicationsubthemediscussessimilartopic.However,theaccentisonthedata

itself.Newtechnologiesareprovidingnewsolutionsfordatainterchange.Computers

areinteractingbetweeneachotherwithouthumaninvolvement.Thedirectorof

VetnaLtd,noticedthattheirpartnersdonotsharemuchinformationwith

transportationcompanies,whichleadstomisunderstandinganddelays.Information

flowtransparencymaysolvethisissue.Becauseitwillleadtothetransparencyofthe

systems.Whichleadstogreaterinformationinterchangeandoptimizationof

operations.

Theresearchertriedtostayunbiasedduringtheinterviewing.However,aftereach

interviewthereweredifferentimpressions.Thus,whenanalyzingtheinterviewdata

usingconstantcomparativeanalysisresearcherwasundertheinfluenceofthose

impressions.Therefore,intheanalysisprocesssomeinterviewsunwillinglybeen

betterhandled.

5 ResultsMaingoalforbusinessesstaysthesame:generateprofit.Manycompaniesstillthink

thatITsolutionissomethingexpensiveandnotmuchuseful.However,costsof

technologiesaredroppingrapidly.Thus,thereisapositiveshiftrelatedtoIT

solutionsimplementation.Fortunately,therearepioneersthattakerisksandbring

innovationtothemarket.Industryleadingcompanieshavehugeresourcesto

experimentondifferentconcepts.Forinstance,Amazonhavepresentedtheiridea

44

ondeliveringparcelsusingdrones.However,innovativecompaniesarenot

necessarilyindustryleaders.Kivasystems,recentlyacquiredbyAmazon,introduced

theroboticsolutionfororderpickingoperations.

Anothertrendintheindustryistosticktothecompany`scorebusinessand

outsourceotheroperations.Companiescanfocusonbringinginnovationstotheir

partofthesupplychain.However,theissueofcommunicationsrises.Many

representativesarecomplainingthatcustomersorsuppliersareintentionallyhiding

non-preciousinformation.RepresentativeofTrimicoOy,theITsolutionsproviderfor

transportationlogisticssays:

…Subcontractorsdon’tgetthefullinformation.Iftheywouldget

moreinformation,subcontractorscouldoptimizetheiroperations…

Todaycompaniesaregeneratinglotofdata,howeveronlyfewknowhowtohandle

it.Thisabilitybringsthemthecompetitiveedge.TheUPSrepresentativedescribed

theirSupplierManagementSystemincreasestheircompetitiveness:

…Itiscalledsuppliersmanagementandthatincludessoftwareon

differentlevels,whereyoucanintegratecustomersonhowthey

wanttoreactwithsuppliersthroughus…

Stillmanybarriersneedtobeovercome,inordertobringinnovationstothemass.

However,thebiggestproblemisseemingtobeinpeoplethemselves.Employeeare

gettingusedtohandleoperationsincertainmanner.Whichmakesthemincapableto

comprehendnewideas.Forexample,intervieweefromMTGBusinessSolutions

confessed,mostoftheirclientlookingforsolutionsbasedontheexistingoperations.

Motivatingit,thatitisexpensivetoteachemployees.Itmakescompaniesvery

careful,whendecideonfulfillingnewsolutionstothebusinesses.Technologiesmay

havedroppedtheprice;however,implementationisstillcostly.

45

6 DiscussionTherearethreemajoroutcomesfromtheliteraturereview.

• E-commercehasincreasedthematerialflowininternationaltrade

• SCMhastoconsidere-commerce,byimplementingITsolutionsforeachlevel

ofactivity(strategic,operational,andtactical)

• E-commercehasatangibleinfluenceonwarehouseoperations

E-commerceisaproductofInternetrevolution.E-commerceisaninevitable

modernizationofcurrentbusinessmodels.Itischangingtraditionalsupplychainand

bringingomni-channelapproachforcustomers.

In2014AmazonandAlibabahavegenerated88.99billionU.S.dollarsand12.29

billionU.S.dollarsnetrevenuerespectively.FinlandhasGDPof267.3billionUS

dollarsin2013accordingtoWorldBank.Whichmeansthattwomajore-commerce

corporationsearned4,5%ofFinnishGDP.

Thatmeansthatthee-commerceisincreasingthepressureonlogisticsoperations.

Especiallyonwarehousing.

AccordingtoAnnunziata(2013)thereweretwomajorwavesofinnovation:Industrial

Revolutionabout1760-1903andInternetRevolutionbetween1980and2000.

Meansofdeliveringinformationhaschangedandarechangingrapidly.Today

customerswanttocontroltheprocessofdeliveryandmanufacturing.However,

currentsystemsallowdoingso.DuringtheIndustrialRevolution,theconceptsof

manufacturingwereintroduced.Obviously,IndustrialRevolutionhadamajoreffect

onthematerialflowofthattime.However,weshouldnotforgetthatbeforethat

therewasrevolutionininformationalflow,whenJohannesGutenbergfirst

introducedpaperpressintheWest.Thepressallowedprinting3600pagesperday

(Wolf,1974).Thisinnovationisratedasthemostinfluentialinsecondmillennium

(A&E,1999).

46

AccordingtoMoore`sLaw(1965)eachtwoyearsthecapacityandtheperformance

ofelectroniccomputingmachinewillincreasetwice.Indeed,from1975to2012the

lawdidwork.However,since2010thepacestartedtodecline.Andin2015Gordon

MoorepredictedthethatinthenextdecadetheMoore`slawwillslowlydecease.

GordonMooredescribedthetrendofhistimebackin1965.Todaytrendisdifferent;

however,patternstaysthesame.Judgingtheoutcomesoftheresearch,thereisa

certainpatternthatisemerging.Informationalandmaterialflowsarebindtogether.

However,theyaredevelopingaccordingtocertainformeventhoughtheircatalyst

factorsmightbedifferentorsame.

Resultoftheresearchisatheory,whichexplainsthelinksofthepast,presentand

thefuturedevelopmentofresearchedtopic.

Withintroductionofinnovativetechnology,thefirsttochangeisinformational

flow,materialflowchangeslater.Alternatively,thereisarotationoftheeffectfrom

innovations.

Todayweareprobablylivingintheeraofanothermostinfluentialinnovationofour

millennium.TheInternetRevolutionhadamajorimpactoninformationalflowinthe

world.

47

FIGURE11.Trendsarepredicted.

E-commercedependsontheInternet.Thus,thefuturegrowthofe-commerceis

basedonthedevelopmentoftheinternet.Nextmilestoneininternetprogressisits

worldwideexpansion.LeadersoftheindustrysuchasGoogleandAmazonhas

introducedtheirprojectsforinternetspreadingout.E-commercewillimplementthe

hardwaresolutionsaswell.Themostpromisingis3Dprinting.Oncecustomerhas3D

printerinitsfacilities,thematerialflowwillnarrowdowntosupplyingrawmaterial.

SupplyChainManagementhoweverhasmanyoptionstochangeaswellasobstacles

toface.Interviewsshowedthatpeopleareusedtoperformedoperationstheway

theydidallthetime.However,implementingITsolutionsonthedeeplevelcan

provideproactiveandpreventiveapproach.Systemshavecapacitiestoperformbig

calculationsinminutes.Basedontheresultspeoplecanmakedecisions.However,in

thefuturesystemswillbeabletocommunicate,discussandmakedecisionsbetween

eachother.Nevertheless,peoplestillhavetoperformascreatorstoteachthose

systems.

Warehousinghowever,mostprobablywillnotneedanyhumanassistant.Today

therearealreadyautomationprocessespresentinthewarehouse.Nonetheless,the

trendwillcontinuetogrowinthisdirection.Todayitiscommontostoregoodsin

automatedstorages.Technologiesarehelpingtosavethespace.Inthefuture,

48

roboticsolutionswillbeimplemented.Therearemanysetsofdifferentsensorsthat

alreadyinuseforautomations.Thenextmilestoneforwarehousingistoimplement

theidentificationsystem,whichcanworkautonomously,withouthuman’s

interference.

TheresearchforecaststhatnextRevolutionwillinfluencethematerialflow.Most

promisingexampleis3Dprinting.

7 ConclusionThestudyresearchedtheinfluenceofe-commerceininternationaltradeonsupply

chainandwarehousemanagement.Inordertostudythisphenomenon,inductive

approachandqualitativemethodwereimplemented.However,accordingto

inductiveapproach,thestudywasperformedonspecificphenomenon.Theoutcome

isgeneralconcept,pattern.Throughthispattern,itispossibletoanswerthe

researchquestions.

I. Whatistheinfluenceofe-commerceoninternationaltrade?

• E-commerceprovidedanopportunitytoexpandthemarketsforSMEatalow

cost.

• Howevernewbarriersareemerging.Mainissuesarerelatedtothe

interactionwithauthorities.

• Deliveringandsharinginformationwithaclickofamouseisputtingpressure

tothelogisticsactivities.Inturn,itaffectstheinternationaltraderegulations.

Forexample,newsolutionsforcustomsclearance.

II. CanE-commercemanagerialskillsbringcompetitiveadvantage?

• Definiteanswerisyes.Supplychainmanagersshouldunderstandthenew

principalsthatareemerging.Forexample,customersarebecomingmore

fastidious.Thus,thosecompanies,whocanmanagebothmaterialand

informationalflowtosatisfytheircustomers,arebetteroff.

III. WhatistheeffectofE-commerceonglobalsupplychain?

• Eachcompanyhasitsownsupplychain.However,e-commercesetatrendfor

outsourcingactivitiesfor3PL.Themainreasonsofthatisthedevelopmentof

materialflow.Increasingdemandanddecreasinglead-timeleadfortheneed

49

ofnewsolutionsinsupplychain.New,biggerfacilities,automatedprocessed

arethesolutions,whichrequireinvestments.Consequently,onlybig

companies,whosecoreactivityislogistics,supplychain,canimplement

whosesolution.

IV. WhatistheeffectofE-commerceonsupplychainmanagementand

warehouseoperations?

• Warehouseoperationsareonthevergeofhugedevelopment.As

warehousingrepresentsthematerialflow,it`schangesareinevitable.New

megae-fulfillmentcenter,e-commercehubsarethefutureofwarehousing.

Nowadays,wearewitnessingtheeffectofInternetrevolutioninmanybusinesses.

Accessandabilitytoshareinformationinstantlyaregamechangingparametersthat

burdenexistingsupplychainoperations.Inturn,itstimulatesinnovationsand

optimizationofexistingsolutionsinmaterialflow.Manyinnovationsarealready

existingandnowbeenimplementedasprototypes.However,itwilltaketimeto

makeasignificantleapforwardandexpandinnovationtotheindustries.

Globalizationismakingindustriesinterconnected.Thus,basingonthetheory,one

canpredictwhatinnovationalimpactnewtechnologieswillhaveondifferent

industries.

Eventhough,researchhasabigscopeontheissue,theeconomic,monetaryand

politicalperspectivesarenotanalyzed.Thus,theoutcomesmightprovideinaccurate

realapplication.Studywasconductedusingqualitativeresearchmethods.It

assumedtostudypeoplesexperienceandpractices.Eventhoughtheauthortriedto

beunbiased,theanalysisresultshavemoresubjectiveattitudethanobjective.

50

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53

9 Appendices

9.1 Appendix1

Appendix1.Listofanalyzedliterature.

No. ArticleTitle

Author/

Year MainpointofarticleSource

1Purchasingmustbecomesupplychainmanagement

PeterKraljic,1983

Purchasingoperationstakeimportantpartincompanies’coreactivities.Managerialskillsarethekeytosuccess.Guidetomanagingsupplychainweaknesses

https://hbr.org/1983/09/purchasing-must-become-supply-management

2

InsidetheGlobalSupplyChain:e-Commerceandanewdemandmodelforlogisticsrealestate

Prologis,2014

Omnichannelingconcepteffectingfulfilmentoperations.Newtypesoffacilitiesarerequiredfore-fulfillment

http://www.prologis.com/docs/research/supply_chain/E-Commerce_Logistics_Real_Estate_Final_July2014.pdf

3WinningtheLastMileofE-commerce

Lee,Whang,2001

Logisticsconceptsandstrategiesforoptimizingmaterialaninformationalflow.

http://www.feg.porto.ucp.pt/docentes/rsousa/Files/Le%20Havre%20Files/S4_1.pdf

4LogisticsandE-

commerceCBRE,2013

Warehouseoperationsadoptingto

afastpaceofe-commerce.E-

fulfillmentdevelopmentcreates

challengesforfacilitymanagement.

Newtypesofwarehouseare

required

http://www.cbre.nl/portal/page/

portal/nl_en?_piref1143_518362

51_1143_1_1.tabstring=Tab2

5

E-CommerceLogistics:

TheEvolutionof

LogisticsandSupply

ChainsfromDirectto

StoreModelstoE-

Commerce

Robinson,2014

E-commerceraisedthedemandfor

smallerorder.ITsolutionfor

warehousinghelpedtoadaptto

thosechanges.ForSMEitishardto

competeagainstgiantslike

Amazon

http://cerasis.com/2014/04/30/e

-commerce-logistics/

6

Maximizing

ProductivityinE-

commerce

Warehousingand

Graves,2012

Currentdistributionoperationsare

thekeyforsuccessfulcustomer

experience.Retailsturnedfor3PL

solutions.Theyprovidebetter

experienceforcustomersthanin-

http://www.inboundlogistics.com

/cms/article/maximizing-

productivity-in-e-commerce-

54

Distribution

Operations

housefulfillment.However,in

ordertostaycompetitive,3PL

shouldinvestintoautomation.

warehousing-and-distribution-

operations/

7

E-commerce-New

opportunities,new

barriers

TheNational

BoardofTrade,

2012

SurveyofSwedishcompanies,

regardinge-commerce.Analyzed

indirectbarriersthateffect

operationsofSwedishcompanies

abroad.

https://www.wto.org/english/tra

top_e/serv_e/wkshop_june13_e/

ecom_national_board_e.pdf

8

DisruptiveLogisticsThe

NewFrontierforE-

commerce

OliverWyman

(Lierow,Janssen,

D`Inca)

Futuretrendsoflogistics.3PL

innovationsbroughtby

internationalplayerssuchas

Amazon,Alibaba,DHL.Fastmoving

goodsoperationsanalyzed.

http://www.oliverwyman.com/co

ntent/dam/oliver-

wyman/global/en/2014/sep/MU

N-MKT20101-011_screen12.pdf

9

E-commerceboom

triggerstransformation

inretaillogistics

JonesLang

LaSalle,2013

Ase-commercelogisticsmodels

develop,theywilldrivehuge

changesinphysicaldistribution

networks.Thiswillgiverisetoa

newclassoflogisticsand

distributionpropertiessuchas

megae-fulfillmentcenters.

https://www.jll.com/Research/eC

ommerce_boom_triggers_transfo

rmation_in_retail_logistics_white

paper_Nov2013.pdf

10

Chinaproposesto

createinthefreeport

ofVladivostokhubof

e-commerce

TASS,2015

ChinaandRussiaareinvestinginto

hugee-commercehubintheport

ofVladivostok.

http://www.newsvl.ru/far_east/2

015/08/25/138360/

12Alibabaopensofficein

Russia

Korotkinand

Hachataryan,

2015

Alibaba,thegiantofe-commerce,

seesRussiaasahugemarket.It

opensitsofficetocoordinate

operationsclosely.Asanexample,

popularproductswillbestoredin

Russianfacilities.

http://www.gazeta.ru/tech/2015

/06/02/6743269/alibaba-opens-

russian-office.shtml

55

9.2 Appendix2

Appendix2.Semi-structuredinterviewguideline.

56

9.3 Appendix3

Appendix3.Listofrepresentativeswhowereinterviewed.

No. Company

Place,Dateand

Timeofthe

interview

Company

representative

1 3PLogistiikkaGroupOy Helsinki,12.06.15,1pm JussiKammonen

2 BlueWaterShippingOy Helsinki,12.06.15,2pm SeppoRautanen

3ConstructorFinlandOy(Kasten)

Helsinki,12.06.15,4pmJarkkoSuomalainen

4 eSendFinlandOy Helsinki,12.06.15,4pm HannuPeltomäki

5 GEFCOBaltic Helsinki,12.06.15,5pm RichardKeirans

6 NFleetOy Helsinki,12.06.15,12pm TuukkaPuranen

7 TrimicoOy Helsinki,12.06.15,11am JanneLausvaara

8 UPSFinlandOy Helsinki,12.06.15,6pm AnttiLahtinen

9 VantaanRahtikeskusOy Helsinki,12.06.15,3pm MarcoPohjalainen

10АВТОГАЗТРАНС,ООО

(Avtogaztrans)Moscow,16.09.15,1pm

EkaterinaMaryana

11МЕТМАШ,ООО

(Metmash)Moscow,16.09.15,12pm

DmitryKopeykin

12

МТГ.БИЗНЕС-

РЕШЕНИЯ,ООО(MTG.

BusinessSolutions)

Moscow,16.09.15,11am

VladislavBortsov

13 РИВ-ПАК(Riv-Pack) Moscow,16.09.15,12pm IgorLebedinski

14 САНДВИК(Sandvick) Moscow,16.09.15,2pm YuliaKandratieva

15 RostekNorthEast St.Petersburg,25.06.15,1pm PavelPolyakov

16 VetnaLtd Ufa,28.08.15,2pm JamilValishin

57

9.4 Appendix4

TrimicoOy

Whatisyourcompany`scorebusiness?

Weprovidesoftwaresolutionsforlogisticscompanies,especiallyfortransportationcompanies.

Whatkindofsolutionsyouareproviding?

Wholepackagefortransportationcompanies.Usuallysolutionsfordrivers,liketherouteplanningandthemobileintegratedsolutions.

Whereareyourcustomersfrom?Doyouhaveanyinternationalcustomers?

No,onlyinFinnishcompanies.Inaddition,ourcustomersaresmalltransportationcompaniesthatworkassubcontractors.

Howdoyouhandleordersfromyourcustomers?

Basicallyweareusinge-mails.Sinceourcustomersaresmallcompanies,theycannotaffordfullERPsolutions.Soweoperateinlittlesectorofthemarket.Sowedon’thaveanyCRMsystemneither.However,oursolutionsdoesnotrequirecomplexERPsystems,itcanbebasedonmobileapplication.

AreyoufamiliarwithInformationalandmaterialflow?Howyoursoftwaresolutionscomplywiththeseissues?

Itfastenspayment.Whendeliveryisdone,informationgoestotheofficedirectly,thusfasteningtheoperations.Routeplanningisincreasingtheefficiencyoftransportation.

Youmentionmobileapplication.Whatfeaturesithas?

Well,forexample,ifthereisadifferenceinactualdelivery,iteasilycanbechangedthroughthemobileapplications.Inthiscasethedeliverywillbeperformedandtheinformationwillbesenttotheoffice,wherepeoplecansolvethemistake.

Inyourexperience,wasthereanyinnovationintheindustry?

Yes,Ithinkthatmobiletechistheone.Because,itisalwaysincreasing,whenthetechnologyisgettingmoreaffordable.Before,onlybigcompaniescouldaffordexpensiveequipmentsuchasbarcodescannersandsoon…nowmobilesaretakingthelead.

WhatdoyouthinkaboutRFIDsystems?

Ithinkthattherearestillcertainlimitations,howeversoonwemightseeitshype.I’vebeenreadingaboutit.Nowitiscostly,in5years,whenthecostdrops,theywillbecomepopular.

58

Whataretheproblemsoftheindustrytodayandwhatisdirectionofthefuturedevelopment?

Nowyoucangetlotsofdata,butmostofthemisnotprocessed.SoIguessinthefuture,companieswillmakesoftwarethatwillanalyzemoredata.SocalledBigData.However,theproblemistounderstandthisdataandhowtouseit.Andinmyopinionthatitpeopleswork.

Whatproblemsdoyoupersonallyface?

Companiesdon`ttrusteachother,andtheydon’tshareinformationmuch.

Howwillitchangeinthefuture?

Forexample,nowthereisaproblemoftransparency.Transportationscompaniescannotknowwhattheyaretransporting.Whenthetransparencycomes,youcouldplanahead.Subcontractorsdon’tgetthefullinformation.Iftheywouldgetmoreinformation,subcontractorscouldoptimizetheiroperations.Sothetransparencyshouldincreasetheefficiency.

Whatdoyouthinkaboutwarehouseoperations?

Ihavebeenreadingabout3Dprinting,andIthinkitwillmakeahugedifferencesoon.Therewillbestilllogisticsoperations,sincetherawmaterialneedtobetransportedandstored.AndIthinkitwilleffectwarehouseoperations.

Whatcompaniescoulddotosatisfytheircustomers?

Informationflowisakeypartofthat.Sendinginformationofthedeliveryprogresstothecustomermakesdifferenceonsatisfaction

Whatwillchangeinlogisticsinnext10years?

Theinformationwillbesharedmoreopen.Andlesssmallcompanieswillbethere.Big3PLcontractorssuchasDHLandUPScananalysebigdata,thustheywillsharethemarket.

eSendFinlandOy

Howwouldyoudescribetheinnovationsinmaterialflow?

Well,materialflowisquitefastcurrently.Theyhaveveryfastdeliverysystemsnowadays.ItwillonlytakeonedayfromwhateverpartofEurope.However,thefacilitieshavetobeclosetothefinaldestinations.

Whatareproblemsofinformationflow?

59

Youhavetopriortheinformationyougettoyouremail.Youreceivehundredsofnewmessagesdaily.Youhavetotakeonlythatisimportantforyourbusiness.Becausetimeisthemostimportantresource,youhave.

Whichdirectionmaterialandinformationalflowwilldevelop?

Ithinkitwillbeequalinthefuture.Becauseyouhavethose3Dscanners,soyouwillhavethematerialimmediately.Therefore,itiswillbemaderightaway.

ConstructorFinlandOy(Kasten)Whatchallengesyourcompanyisfacingwhendealinginsupplychain?

Ourproblemisthatweshouldgetbetterinformationdeliveredtoourcustomersaboutourproducts,aboutavailability,capacity.

Howyourwarehouseoperationlimitationsaffectyoursupplychain?

Thereisapossibilityoferrors,sincemostofthewarehousesarenotautomated.Someproductsneedtobeunpackedbeforecollectingtheorder,whichdecreasetheorderpickingtime,asaresultthewholeleadtime.

WhatthreatsyouseefromtheglobalcorporationssuchasAmazon?

Ithinkthesebigcompanieswilltaketheshareofthemarket.However,inourcase,situationisalittledifferent.However,weonlypackandstore.

VantaanRahtikeskusOyWhatdifferencesbetweenmaterialandinformationalflowyouseeindailyoperations?

Thedeliveryspeedisnotthatimportant.Itisimportanttoshareinformationregardingthestatusofthedelivery.

Ise-commerceaffectsthematerialorinformationalflows?

Themostimportantincentiveisthatourcustomerswantproductsandservicescheaperandcheaper.Therefore,theyforceustodevelopthesethings:informationaltechnologiesandmaterialflowsolutions.Becauseourcompetitorsarealsoinneedfordevelopment,soifwestop,theywillnot.SometimesIhaveheardthatlogisticsbusinessisslowmoving,butitisnottrue.Becauseweconstantlydevelopdifferentsolutions.

Whatdoyouthinkisthefuturedevelopmentoflogistics?

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Idon`tknowhowmuchlogisticscompanieswilldevelopinformationservicesbythemselvesortheywouldbuyit.

Howdoyouhandlelackofinformationinsupplychain?

Theproblemisthatrequiredinformationisnotattherightplaceattherighttime.IfIknowsomething,itisnotenough,becauseotherpeopleshouldknowthesameinformationthatIhave.Westillhavetheemailandphonesbutstillpeoplethatneedinformationdonothaveit,whereaspeoplewhodonothaveit.Thisthinghappensallthetimeinreallife.

Howtomakekeypeopletogetrightinformationatrightplaceandrighttime?

Ifkeypeopleinthecompanyreceiveinformationatrightplaceandrighttime,theycouldmakequickandoftenrightdecisionregardingmaterialflow.IfyoutakeanexampleofglobalcompaniessuchasDHL,DSE(whichisourcustomer),andwheyhavethousandsofpeopleemployed.Iftheyhavebigproject,peoplecanbefromdifferentcountrieswithdifferenttimezones.Inthiscase,flawlesscommunicationmightbecomeaproblem.

Howwouldyoufeeliftheinformationwasprocessbycomputers?

Ithinkthatcomputersandsystemsshouldsupportthedecision-making.However,sometimescomputersystemscan`tanalyse.Therearecertainlimitationstothesystemanyway.Sowecandependonthemcompletely.

UnitedParcelServiceFinlandOyHowdoyouhandlecustomerandsupplierorders?

Wemainlyusinge-mails,wereceivingordersfromcustomers.Thenalsowecanuseinternetplatforms,totakecareofoursuppliersorcustomerssincewehaveordermanagementsystems.Itiscalledsuppliersmanagementandthatincludessoftwareondifferentlevels,whereyoucanintegratecustomersonhowtheywanttoreactwithsuppliersthroughus.Sotheycanuseconsiderationservices,bettertrackingservices,orthingslikethat.

Howdoyouhandlematerialandinformationflows?

Manytimesinformationfollowsmaterial.Sometimesinformationgetsdelayed.Onlyforwarehouseoperations.Warehouseislikeasmallpiecefromthewholebasket.Imeanwhenthecargocomes,materialcomesfromsomewhere,usuallyitcomesfromthewarehouse,someplatformsandthingslikethat.Andonthewaytherearemanycheckpoints:ports,airports,drivers.Ateachcheckpoint,thecargoisscannedandthatinformationgoesthroughinternalsystem,whichgoestothecustomer.

Howdoyoumanageinformationalandmaterialflowsinyourcompany?

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Forthisquestion.Recently,webasicallymadeanewsupplychainforoneofourcustomerstoAustraliafromFinland.Weknew,wherewearegoingtoaim.Allwehadtodoistoputalloursubcontractorstogether.Andwehadtheinformationflowwiththemtothecustomer,tous.Thenweshowedthesolutiontothecustomer,theyaccepteditandtheyitstartedtowork.

Whatinternationalpartnersdoyouhave?

Weusemanydifferentairfreightcompanies,likeKLM,SingaporeAirlines,andFinnair.Icancountthatourinternationalsubcontractorsareourinternationalpartners.Wehaveoutsourcedourwarehouses.InFinland,weareusingspecialparceldistributionvehicles.

Whatchallengesyourcompanyisfacingwhendealinginsupplychain?

Companieswanttoprotecttheirbusiness,thussharinginformationisstillquitereluctantly.Whenwestarmeetingswiththebuyersofourservices,wegotusedtotheroleofannoyingpartythatwantstofindoutanykindofinformation.Evenifthereisnothingvaluable,somecompaniesbehaveirrationally,bynotlettingususethatinformation.Therefore,wetreatitlikenormalsalesnegotiationprocess.Howeversometimesthisprocesscantakealongperiod.

Howdoyouimproveinformationalandmaterialflowsinyourcompany?

Wearealwaystryingtoimproveexistingsolutionsforourcustomers.Welookingfornewsolutions,butalsocheckthecostfactor.Ifwecanseethatinourpipelinethecostmightbelesswithcertainsolution,thenwesendthesolutionforthecustomer.

Doyouhaveanyparticularexamples?

Well,almostallinformationisclassified.However,Icangiveanexampleofsimplesolution.WhenthecustomerhasLCLcargocominginfromsomewhereFarEast.Andtheyhavevolumethereintheport.Sowesee,thatthevolumegoeswiththeLCLandtheLCLismoreexpensivethenweshouldputthiscargotoFullcontainer,soweconsolidatethiswholeshipmenttoonecontainerandshipit.Thenwesendtheinformationtothecustomerthatwesavedroughly1000eurosonthedelivery.

Whatinnovationsyourcompanyisbringingtotheindustry?

Yeahofcourse,bigcompaniesaresettingnewfrontierinthedevelopmentdirection.Theyhavetheresourcestoinvestigatedifferentinnovationandifsomeofthemwillshowperspective,otherwillcatchup.Whatwearetryingtodoistogetinvolvementwithourcustomers,suppliers.Whencustomerhave30-40differentsuppliersinonecountry,wetrytogetthemallandthecustomer.Thenwenegotiatewiththecustomer;ifyouletusintoyourbusiness,wewillhelpyoutodiscoverthepainpointsofthelogisticssupplychain.Thenwetrytoconsolidatematerialflow,orintegrateourownsystemswiththesupplier`s.Itgoestothroughourownsystemsbacktotheactualconsignee.Becauseinmanycaseswhenconsigneeshavediscussionswithsuppliers,theactualinformationflowisusuallydonebyemails.

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Becausemanysuppliersdon’thavenecessarysystems.Whereoursystemscanintegratethisflowintotheorganization.Andourservicecanmakereal-timefollowing.

BlueWaterShippingOy

Me:Howdoyouhandleordersfromyourcustomersandsuppliers?

Theorderswegetfromclientsareconcerningtransportation.TheywanttoplaceanorderfromustocarrytheircargotoFinland.Thesearetheorderswearereceiving.Mostofthemarecomingbye-mail.WearenotusinganyInternetplatforms.However,salesdepartmenthavedifferentsystems.Weareusingsoftwareformakingtransportquotationsandcustomermanagement.

Whatsystemlimitationsyouhavetodealdaily?

Forinstance,systemdoesn’tshowamountofjobsforaparticularclient.IfIwanttocheckhowmanyshipmentswasprocessedforparticularclient,Ineedtomakearequestforthisinformationthroughanotherdepartment.Iamnotupdatedwithmyclient’svolumes.

Howdoyouthinkthisinformationcouldhelpyou?

Forexample,Ihadameetingwithmybiggestclient.Ididn`tknowhowmanyoftheirshipmentswecarried.ButIshouldknowthat.AsIsaid,Ineedtomakearequestforthatinformation.However,thisinformationIshouldgetquickly.

Howdoyoumanageinformationalandmaterialflowsinyourcompany?

Sometimesinformationiscomingfasterthantheactualmaterial.However,sometimesitisviceversa.Forexample,onepalletfromItalytoFinlandtoourclient.Thegoodscameearlier,thentheinformation.Andthereisnosystematicallyregularity.

Whatinnovationsyouhaveexperiencedinthepast5yearsinyourcompany?

Ouraimwastoimprovethecargoflow,forinstance.Andallthesupplychainmanagement.Ontheotherhand,thecompanyhasgrown.Sosomeway,wehavebeenforcedtochangesincewewereasmallercompany.Becauseourvolumesaresomuchhigher.Sothesechangedhavebeennecessary.

Howyoucompanyisimprovingitswarehouseoperations?

Wehavemanytrailerscomingtoourwarehouses.Andtheamountisincreasing.Wehavemovedloadingandunloadingoperationsfromourterminaltooursubcontractors,whohas10000sqmcomparetoour1000sqmwithfewworkers.Whereassubcontractorshavetensandhundreds.Sotheycanprocessmoretrailersinshortertime.

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InwholeFinlanddemandhasincreased.Economicreasons;freighttransportationcompanies;nobodyishavingtheirownterminalactually,exceptbigplayers.However,theirterminalworkersarehiredforshortterm.Itallowsthemtoadjustfordemandfluctuations.

Whatchallengesyourcompanyisfacingwhendealinginsupplychain?

Themainchallengesareininformationflowbetweenourcompanyandthesubcontractor’sterminal.Westartedusingthisterminalatthebeginningofthisyear,soeverythingisquitenewforus.Firstmonthswerequitechallenging.Ithinkthatinformationinourbusinessisalwaysnumberone.Itisalwaysthemostimportantmatter.Whateverhappens,informationmustcomefirstandafterthatcargo.Butthetimegapbetweenthisinformationandactualphysicalprocessmustnotbetoolong.TheinformationmustcomeonMondayforinstance,thattomorrowyouwillreceiveonepalletfromItalyfromthisandthissupplier.Notviceversa,thatpalletcomesfirstandthentheinformation.

WhatkindofITsolutionsyouuseinyoursupplychain?

Barcodessystems,thesearewhatweareusing.Andforinstance,theorderinformationwesendingtotheterminalconcerningeachtrailer,whichconsistsof20-30differentshipments.Wehavetosendtheinformationtotheterminal,whatcargothereisandwhattheyhavetodowiththiscargo.Sumofitmustbeunloaded,sumofthatmustbeleftinsidethetrailer,becausethisis,forinstance,veryheavy,oritisbigconsignmentwhichwedeliverrightaway.ThisistransferredwithEDIautomatically!Afterthejobisdonetheyaresendingconfirmation.Ifthereisdamageormissinggoods,theywillinformthat.Wehavetoreadthismessagethatsomecargowasmissing,thenwehavetodosomethingtofindit.

Whatissuesyouhavewithpartnersandhowyouaredealingwiththem?

Well,thepartnerswehaveweareonweeklycontact.Unfortunately,lackofinformationhappenssometimes,whichismoreofamisunderstanding.Usually,themainproblemrelatedtothepartnerisamoneyproblem.

Whatotherissuesyouhavetodealwithinyoursupplychain?

Itdoesn’thappenoften,butsometimesourpartnersinothercountriescanmakemistake,whichcanleadfordelaysindelivery.Sometimesitcanhappenthatinourtrailerthereisnospaceenough.Sopartoftheshipmentstaysinthewarehouse.

OutsideEU.Whentalkingaboutcontainershipping.Containersdonotbelongtous.Theybelongtoshippingcompanies.ThereisshortageofcontainersinFinland.

Concerningcustomsclearance.IfyouimportfoodfromChina,customstakesamplesofit.Whichmayresultforadelay.Sincethewholeshipmentiswaitingtheclearance.However,thisispartofthebusiness,andwearenotworseorbetterinthiscomparingtoourcompetitors.Wecan’tmakechangestothismatter.

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Therearesomanyoutsidefactorsthatcanaffecttheoperation;thereisstorminthesea,orthereissomehazardouscargothatisnotsufficientlysecuredforinstanceorthepapersarenotcorrect.Aslongaspeoplearedoingthisjobthereisalwaysariskofsomethinggoingwrong.

Howtoimproveinformationflowofdailyoperations?

Forexample,thereisatrafficoperatorinItaly,Verona,whoistypetheinformationabouttheshipment.Andthen,byEDIthisinformationcomestoouroffice.Andourtrafficoperatordoesnotneedtotypeitagain.Sooursystemsaretalkingtoeachother.Iftherearemistakesormissinginformation,wecompleteorchangeit.

Howtoimprovematerialflowofdailyoperations?

Getmorevolume,makebiggershipments.Inourregion,thereisenvironmentallimitationonthespeedofships.Only0.1%ofSulfuricisallowed.Anotherproblemisthescheduleofthedeliveries.IntheexampleofItaly,therearenotdeparturestoFinlandearlyintheweek(Monday,Tuesday)youcan`tgetthatonepallet.Becausethereisnomanyshipments.ThustheshipmentswillleaveThursday,Friday.Sospeedisnotthemainproblem.However,iftheshipmentisFLC,wecansendthetrailerrightaway.

Howdoyouseethedevelopmentoflogisticsindustry?

Ittechwillimprovealot.Automationisthenextstepofthedevelopment.Someofourcompetitorsprovidecustomeraccesstotheirinformationalsystems.Butitnotnecessaryhelpingcause,itthereisnoinformationthereisnothingtosee.IfthecargoisnotyetinFinland,itisinItalystill.Itdoesn’thelpifcargoisnotmoving.