Strategic Management Journal Sharing

Shaping the E-Commerce

Logistics Strategy
Antonio Ghezzi, et.al.
Politecnico di Milano, ITALIA

Shared by Hery Purwanto

Executive MBA IPMI, Indonesia, 2019
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E-Commerce Phenomenon

Global retail market in 2017 is………… $28 trillion

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10% is shared by e-commerce
= $2.8 trillion

E-commerce will grow by 20% CAGR in 2020

= $4 trillion
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The Nielsen company data. 2017. (www.nielsen.com)
Internet penetration Smartphone penetration

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RETAIL RIDES ON THE BACK OF SMARTPHONES …
MOSTLY
Mostly affected to the sectors like apparel and electronics, it’s still
early in the evolution of e-commerce for most FMCG categories.

Nielsen, 2017.

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E-Commerce penetration to retail sales is considered
still low over the years..

Retail Ecommerce Sales Worldwide, 2017-

2023.
Trillions, % penetration of total retail sales.
(www.eMarketer.com) Although the absolute value of e‐commerce and the

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average growth per year are strong, its penetration rate is
relatively low to overall retail sales.

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Key factors influencing e-commerce penetration

Broadband availability

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Legal aspect for consumer protection

Security and trust perception

High quality customer experience

The best logistics strategy

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Determining
logistics strategy is
very important
So, which
logistics
strategy I
have to use?
We have the answer from this research!

Shaping the E-Commerce

Logistics Strategy:
a Decision Framework

Jens Martensson
Antonio Ghezzi, et.al.
Politecnico di Milano,
Piazza Leonardo da Vinci, ITALIA

International Journal of Engineering Business Management.Vol. 4:13. 2012 10

Context of the study
Many researches have presented various type of logistics problems and
strategies in B2C e-commerce market.
But none of them presented the relationship between logistics strategies and

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logistics problems, which can help B2C merchants to design their logistics
strategies.
The majority of the papers are focused on specific industries and on specific
strategies, lacking a broader perspective which is useful to identify common
principles in order to drive the main logistical choices in the e‐commerce field.

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Research Questions to address:
RQ1‐ What are the most typical ecommerce logistics problems?

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RQ2‐ What are the main e‐commerce logistics strategies?

RQ3‐ Is it possible to correlate logistics problems with logistics

strategies?

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Research framework

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Research methodology

1). A comprehensive literature analysis, the main descriptors of

“logistics problems” and “logistics strategies” were identified.

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2). Through the cross-case examination of 28 case studies of leading e-
commerce merchant in Italy, the main logistics problems and
strategies were categorized.

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 Logistics problems in ecommerce (1)
4 types of ecommerce business models
investigated: Classification of logistics problems :

1. Complete online sellers: selling goods  Product features; like value

purely online which carry broad product density, product range, risk of
ranges. obsolescence (short expiration

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date) and product‐specific needs;
2. Focused online sellers: pure players that
focus on narrow product range, like mobile  Customer service level; like
phones, cameras and professional books. returns management, order cycle
time, punctuality and flexibility.
3. Online clubs: pure players that focus on a
very limited range of end of offered et the
lowest price lasting just a few days campaign.

4. Traditional sellers: usually large distributors 15

that offer online a selection of the product

range.
Logistics problems in ecommerce (2)
Business grouping from the case studies

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Logistics problems in ecommerce (3)
The matrix of the logistics problem classified
in 4 groups:
1). Product-side complexity
2). Service-side complexity
3). High complexity

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4). Comparatively easy.

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Logistics strategies in ecommerce (1)
There are 4 logistics activities:

1). inventory ownership

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2). order picking and preparation

3). order assembly

4). order delivery 18

Logistics strategies in ecommerce (2)
6 strategies are identified:
1). Supplier full managed;
2). Supplier managed inventory;

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3). Distributed inventory;
4). Consignment inventory;
5). Merchant managed inventory;
6). Full in-source.

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The relationship between logistics strategy &
logistics problem
The matrix has clearly showed each
business model with specific logistics

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problem to be placed in the specific
logistics strategy.

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Lesson learned (1)

• I agree…. 1).The logistics strategy depends on the specific logistics problem.

2).The logistics problem is not the only element driving the choice of the logistics

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strategy. The selection of business model also can determine which logistics
strategy that the business owner want to opt.

3).The model proposed provides the guidelines to decide when to completely

outsource or in‐source the logistics processes. Each strategy implied to the
cost of logistics, which overcoming specific problem they faced.

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Lesson learned (2)

• Not fully This study has too much simplified the real logistics problems for e-commerce
agree… B2C businesses, and disregards logistics operation barriers, such as:
o warehouse dimension & networks,

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o geographical challenge across the countries,
o and technology barriers.

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