Pres:Basics of Ecommerce - Supply chain & Delivery

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Basics of Ecommerce - Supply chain & Delivery

Basics of Ecommerce - Supply chain & Delivery

Title Basics of Ecommerce - Supply chain & Delivery
Target group Students, Beginners
Topics Supply Chain Management, Delivery and Service, ECommerce Basics
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Public summary

Goal of this course lesson is to give students an understanding on how inbound and outbound logistics work in relationship to the overall supply chain and ecommerce.

The lesson is divided into 4 parts:

  • In the first section the concept of value chains and processes is explained. The role of procurement is discussed in detail.
  • A class assignment is created where students create their own value chain (creating paper airplanes). Materials needed are: white paper + pencils. The exercise takes about 50 minutes.
  • The third section zooms in on terminology related to supply chain such as EDI (a short and a long video, you may want to skip one), RFID, Warehousing, Inventory and returns. There are links to several video’s explaining the concepts in more detail.
  • The course can be offered in two and three hours (skip the class assignment).


  • ICT Architectures
  • ICT Development and Management
  • Transactions & Payment
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  • The Value Chain
  • Supply chain
  • Procurement
  • Terminology
  • Warehousing
  • Delivery
Logo Ecommerce Foundation1.png Source: Adapted from Deise et al. (2000) Figure 6.4(b). 4

Members of the supply chain.png
Logo Ecommerce Foundation1.png Source: Dave Chaffey, Digital Business and Ecommerce Management, Edition 6 6


Explain the different actors within the supply chain. List the following terms: Supply chain management (SCM): The coordination of all supply activities of an organization from its suppliers and partners to its customers. Upstream supply chain: Transactions between an organization and its suppliers and intermediaries, equivalent to buy-side ecommerce. Downstream supply chain: Transactions between an organization and its customers and intermediaries, equivalent to sell-side ecommerce.

Definition: The processes for acquiring the various resource inputs to the primary activities.

Sustainable procurement process.jpg
Logo Ecommerce Foundation1.png Source: 8


Procurement is more than just buying. There are several steps. Teacher notes: discuss the 7 steps of procurement.

  • It is estimated that for every dollar a company earns in revenue, 50 cents to 55 cents is spent on indirect goods and services – things like office supplies and computer equipment.
  • That half dollar represents an opportunity: By driving costs out of the purchasing process, companies can increase profits without having to sell more goods.
Logo Ecommerce Foundation1.png Source: Hildebrand (2002) 9


Procurement is however more than just buying goods and services at the lowest price. Which other aspects count? Discuss possible other aspects with the students. Possible answers include:

  • At the right price
  • at the right time
  • of the right quality
  • Of the right quantity
  • From the right source

Baily et al. (1994)

Procurement Key.png
Logo Ecommerce Foundation1.png Source: Dave Chaffey, Digital Business and Ecommerce Management, Edition 6. 11


There are several ways procurement is done:

  • The customers buy directly from the suppliers’website.
  • The customer tells what he likes to buy and suppliers make proposals on the website of the customer.
  • An intermediairy platform brings customers and suppliers together.

Some useful terminology

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Why should you use EDI?

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Electronic Data Interchange (EDI) Electronic communication method that provides standards for exchanging data via any electronic means. It automates nearly all steps in the ordering part of the procurement process. Preventing: double entry/manual work, reducing mistakes/typo’s, fastens the process

  • EDI
  • RFID
  • JIT
  • Dropshipment
  • Off & Nearshoring
  • Warehousing
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Radio-frequency identification (RFID) Wireless use of electromagnetic fields to transfer data, for the purposes of automatically identifying objects and tracking tags. RFID in essence is a small chip which allows you to identify an object without having to scan a barcode or type in an product ID code

Where can RFID be used for?

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Definition: A production strategy that strives to improve a business' return on investment by reducing in-process inventory and associated carrying costs.

Terminology JIT.png
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Advantages: Minimize inventory costs


  • significant coordination between retailers and suppliers.
  • Risk: walk a fine line between having too much and too little inventory.


Drop shipping is a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer. The video helps explain the concept.


Offshoring involves shifting work to a foreign, distant organization in order to reduce production costs. Nearshoring - The transfer of business or (IT) processes to companies in a nearby country, often sharing a border with your own country. The primary reason for farshoring have been lower costs. There is a clear trend towards nearshoring: faster delivery, less issues with time zones, laws, cultural differences, etcetera.

  • Incoming
  • Storage
  • Picking & Packing
  • Outgoing
Key warehouse processes.png
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Warehouse management system is a key part of the supply chain and aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, putaway and picking.

Wehkamp builds warehouse:

  • 4 million articles
  • 480.000 pick locations
  • 2.5 kilometers hanging goods locations
  • 8.000 pallet locations
  • 47.000 m2
Warehouse Wehkamp.png
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There are many delivery options possible:

  • Home delivery
  • Pick up in store
  • Pick up at pick-up point

Returns volume.png
Logo Ecommerce Foundation1.png Source: 34

How can returns be reduced?

Class Assignment.jpg
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The End.jpg
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