In the changing times traditionally followed fundamental practices of retailing and logistics management have changed in a great way. There are several new concepts which have emerged and have lead to a new scenario altogether and has transformed the way with which business practices are carried out. Profit margins have increased in a great deal as the use of internet has helped in cutting down the costs in magnificent manner. There is need to deal with various aspects associated with online relating and there are hell lots of companies in the virtual world which are selling and communicating with their target audiences.
There are several positive aspects in form of increase consumer reach and decreased promotional costs there are certain apprehensions which are to be dealt very carefully. There are certain aspects which are to be managed with care and are to be taken special care of. This fact stated above can be elaborated further in light of the fact that in case of online retailing things are over evaluated and over estimated. There are several problems which are faced in case of supply chain functions and logistics management all the time and this reason being it has to be managed differently (Stafford 2011).
In the present article there are several aspects which will be discussed in detail and are related with a newly formed consortium of domestic and overseas investors. The case explains that the members in the consortium have joined hands to establish an online retailing company. The analysis so performed on part of the members of this consortium suggest that online retailing is a practice which is related with buying and selling practices among consumers is carried out making use of internet. There are several other elements of online retailing which have been identified on part of the consortium members which are related with opportunities which they can cater. There is high end scope for car accessories, luxurious boating products and electrical appliance the scope for online retailing is high in Australian region.
Some of the major concerns which are considered on part of consortium members are related with management and discharge of supply chain functions and logistics management at large. Some of the special aspects related with logistics management are to be defined and discussed on their part and this is done in order to anticipate about all the possible threats and strengths so associated with this new project. In this regard the most important element to be discussed and explained is related with logistics management system. With special reference to this department special emphasis has to be laid on crucial activities order management system in case of online retailing.
In addition with this some other elements will talk about activities to be performed in packaging and material handling at the Australian center so established. Last but not the least the article will also explore the options in case of physical distribution of goods all over the state in response to the orders so placed.
Logistics Management and Online Retailing
The whole effort is carried out on part of members which are part of a newly developed consortium and the members are interested in establishing an online retailing company. In case of the online retailing company the opportunities are to be explored with special reference to target audiences so identified in Australia. The whole plan has to be configured in such a way that it is capable in dealing with the needs, choices and preferences of the Australian audiences. In this contest some of the options with which this newly established online retailing business will be projected to the consumers are associated with lower prices of the products, wide range to choose from and convenience to shop without any form of physical boundary. In scope of the online retailing company which has been established on part of the consortium members it has been decided that products from Singapore and China will be procured. The procurement will be carried out at very low prices and a local supplier from there will ship products for this company and a regional center for warehousing will be set up in Australia (Stafford 2011).
There are several techniques which are to be followed so that the situational demands can be entertained and activities can be performed in accordance with it. The key activity area is the technology which has to be used in case of online retailing and transaction associated with it. There are several other technical needs which are associated with order management, packaging and physical distribution of goods in the state in scope of online retailing. In light of the overall discussion so carried out above it is important to through some light on the process of online retailing itself. This is important in order to define about other related activities associated with it. Online retailing and its favorability in the Australian market with special reference to logistics management itself is very crucial for this report.
Online retailing is believed to be an important part of the whole e-commerce process and this is also reflected upon in the viewpoints of consortium members. So in this context online retailing can be defined as the process of purchase and sale of goods and services between consumers and retailers using the Internet. Along with this definition of online retailing as per the understanding of the consortium members it is also important to mention about their belief that they visualize a positive approach of online retailing in Australia. This belief is held in mind of the members with special reference to car accessories, boating products and electrical appliance (Kowal 2012).
Online retail and its estimation in the state of Australia are associated with a high growth rate in the transportation and logistics industry. There are several ways with which this increased rate can be justified and this growth of logistics and transportation can be attributed to increased competition among online retailers in Australia. There are various possibilities of growth pertaining to the Australian sate in the field of online retailing. This explains that the level of online retailing will be high and the newly established firm will entertain the mood and tastes of target audiences in Australia. There are many important factors which are to be stated here and the very first factor is associated with low investment requirements in case of online retailing. This is in contrast with a real time brick-and-mortar stores which are to be established in traditional concept of retailing.
There are some other benefits too which are inclined towards wide range and reach for the consumers and the markets and this factor in one way or the other increases the scope for success and establishment. Results which are realized in case of such online efforts are evidently visible and lead towards a high degree reduction in several costs. These costs can be stated in the name of consumer acquisition, transaction costs and advertising and promotional costs. Along with reduction in cost there are many other factors which promote online retailing and make it popular among consumers too.
In case of online retailing there is a much faster rate of inventory turnover, there is one to one interaction with the consumers and there is also a higher degree of brand value and brand recall among the target audiences. All the physical hindrances and geographical boundaries are eliminated in context with the concerned business and this increases the overall impact of business activities. Sum total of all the possible aspects about online retailing it can be evidently stated that there is a good scope for business to get accomplished and at the same time the costs incurred and the investments so made are also low. Hence all the technological options in case of order management, packaging and physical distribution has to be availed in such a way that maximum benefits can be garnered on part of this newly formed online retailing company.
Online Retailing and Order Management System
Order management and related activities are very important in scope of online retail and hence there is need to discuss about them in detail. The very first element to be discussed here is order management system and there are several other activities which are discussed within its association. The online retailing company in case of order management system must make use of a specific information management system. This information management practice must be capable to deal with vendors, customers and the products. There are many functions which are related with availability of the marketing information.
Marketing information is important so that a fair idea about the demand and supply functions prevailing in the marketplace can be achieved. This will help in dealing with the appropriate changes and alterations which are to be made in the entire practice so that a higher degree of efficiency can be associated with order management system. There are several requirements on which the order management system has to be accomplished and these can be defined as making entry of the orders, as well as updating of the orders and customer service in order to promote the online retailing activities being carried out with the use of internet (Kowal 2012).
There are certain capabilities which are to be associated with order management system and it is important to state that the order management must be capable of making a note about the time when the consumer has actually placed the order. This is important and in line with it the other associated activities will be performed in a sequential manner, these other activities are related with all the steps in order management till the last step in which the order has been actually delivered to the ultimate consumer.
For high degree of efficiency and performance the order management system has to work in synchronization with the management information system. This will help in dealing with other contingencies which can be potentially faced in the scope of all the operational activities. The synchronization will also ensure about high grade security to all the entities involved in online retailing. Provision of administering cash on delivery aspects in case of an effective order management system being used in case of online retailing and will transform the rate of success in scope of concerned business.
Multi-channel order management system is appropriate and is highly efficient and is to be used in this online retailing business. Technological up gradations has allowed a high grade development and with these changes use of multi-channel order management solutions for online retail can be justified. This multi channel order management system will consolidate data to provide consistent service across channels. Flexibility to the consumers is also very high in multi-channel order management system and this is important for success (Xing, Grant, McKinnon, and Fernie 2010).
Convenience of consumers will not be sacrificed, which is one of the motives of concerned company. Flexibility for the consumers also entails the possibility of continuity or consistency of the brand experience they have received. Seamless coordination of order-to-fulfill processes across sales channels being used all over the state can be managed appropriately using multi-channel order management system (Xing, Grant, McKinnon, and Fernie 2010).
Automatic updates in case of multi-channel order management system for the orders taken and delivered to the consumers are very important. This helps in keeping track about the stocks which are present in the company and in this way smooth processing can be carried out in case of overall organizational activities. Inventory utilization has been improved in case of online retailing making use of retail completion system for timelier and money-spinning order accomplishment. Multi-channel order management system will surely prove out beneficial for the concerned retail store and the discussion stated about justifies this fact to a great extent (Xing, Grant, McKinnon, and Fernie 2010).
Packaging, Material Handling and Distribution Centre
Procurement of goods is important for carrying out online retail as these are to be offered to the consumers. The favorability of the marketplaces and low prices has motivated the consortium members to access Asian countries in order to procure goods. This is because Asian countries like Singapore and China are very high on mass production. This indicates that goods can be brought in the Australian economy from there at very low prices and can be made available to the local consumers. This will help in accomplishing the motive of online retail company to generate profits with a higher margin as they have procured on a comparatively low price and are selling on a price which is lower in contrast to the Australian products hut still will help in generating profits (Multi-channel order management for retail 2012).
This description indicates a need for distribution center in Australia where all the goods can be stored and channelized further throughout the state as and when orders are placed. Multi-channel order management system and the regional distribution center have to work in close association with each other so that high rate of success can be anticipated for the online retailing company. As the orders will be placed by the consumers there will be need to deliver them at their door step and here the role of distribution center will be required to be played. There will be several tasks which will be required to be accomplished and can be sated as packaging and materials handling. In this context the recent trends in the market place have to be taken under consideration. Eco-friendly packaging techniques are very popular and this supports the go green jargon being popularized all over the globe in scope of all the activities.
Organizations are very high on social responsibility activities that motivate them to make use of something different and more environment friendly than popularly used bubble wrap and peanuts. These packaging materials are popularly used but are non-biodegradable in nature and cause lot of harm to the environment (Kowal 2012). These are made up of plastics and this reason being they are not preferable to be used in packaging. These days the awareness among people is increasing and people are business houses are keen on making use of eco-friendly products. Along with the business houses government is also taking corrective actions regarding the packaging materials. The guidelines and directions have been altered to a great extent and this has caused generation of several packaging options which are non-biodegradable in nature. At the same time material handling techniques are also to be emphasized and are equally important as packaging.
In the scope of product handling the activities are inclined in such a way that they should be able to protect the products from any form of breakage and mishandling of the products. General packagings materials are composed of toxic materials and at the same time the changing trends are also motivating consumers to violate making use of such products. This reason being compliance with government regulations to ensure about eco-friendly packaging is also important to gain consumer attention (Stafford 2011). Packaging material used in this context will be made out of soy and it will be environment friendly as it is biodegradable in nature. Other eco-friendly alternatives the company can also consider making use of old newspapers and old cardboard boxes. This will become as an important component of the material handling activities to protect the goods.
Physical Distribution and Online Retailing
Role of various intermediaries has been eliminated in case of online retailing and this indicates that the physical distribution practice to be used in this case is unique. This helps in decreasing costs and at the same time consumer interest will increase. Physical distribution practices in case of online retailing are associated with some peculiar characteristics and these can be defined in terms of door step delivery. This increases the consumer comfort to a different level altogether. Physical distribution in case of online retailing is much different in contrast with those being used in case of traditional selling processes.
Age old physical distribution proves are inclined towards the use of chain of distribution channel partners through which goods flow and ultimately reach within the hands of the consumers. The chain entails several entities such as wholesalers and distributors. While on the other hand in case of online retailing there is no middle men and the goods are directly supplied to the customer end from the retailer side. The goods are delivered at the doorstep of each and every consumer and there is a high degree of flexibility and convenience to the consumer. There are several connections which are to be worked upon in case of physical distribution pertaining to online retailing.
The physical distribution is initiated with the transmission of customer order details to the distribution center where the goods are stored. The second step of the physical distribution process is related with order wise gathering or material collection at each of the location chosen for the physical distribution process. The third step of the most appropriate physical distribution process used in regard with online retail can be defined as transport of the different items in order with consumer’s orders to a common location. Then the next step of the physical distribution process is associated with order wise consolidation which accounts for different locations and packaging. All the consignments which clear this stage are further shipped to the ultimate consumer.
The article explains about the role of logistics management and supply chain activities in case of online retailing. The article is in response of a case study explaining about a newly established online retail company which is willing to offer low priced goods to the consumers with a wide range of options and high class flexibility and convenience. Within the scope of this article there are some specific elements which have been discussed and are related with online order management system, packaging and handling of the material and last but not the least the physical distribution process involved in the process.
In addition with this the article also expresses a fair knowledge about the increasing trend of internet retail and the benefits associated with this practice. There are several companies keen on this and making use of all possible opportunities in order to gain maximum benefit out of it. There is a need to take corrective actions in order to carry out all the important activities in the name of logistics management and supply chain management.