Ruchi Prabhu MMS Student Dr. V. N. Bedekar Institute of Management Studies ruchiprbhu@gmail.com Vibhuti Save
Assistant Professor Dr. V. N. Bedekar Institute of Management Studies vibhuti.thakur1@gmail.com
Abstract : Third-party logistics (3PL) is a business which is dynamically growing importance all over the world. However, it is at a very nascent stage in India, though some domestic and multinational companies are trying to establish themselves in this sector and they are achieving their heights. This paper is an attempt to provide a process of 3PL in E-Commerce Industry with
keeping Electronics Goods as a base. The paper focuses on three major issues – present extent of usage of third-party logistics services in the E-commerce industry, reasons for reaching products/orders late than delivery date and impact of usage of third- party logistics services on business/ brands of E-commerce. The paper reveals that most customers are not satisfied with the current level of services provided by E-commerce service providers as it has led to a negative impact on business. The result is that the usage of third-party logistics services will decrease substantially (40 percent) in the near future, or they need to upgrade themselves to new technology and satisfy the customers.
Keywords: Supply Chain Management, Third Party Logistics, E-commerce, Electronics Goods.
Credits : Freepik.com
1. Third-party logistics (3PL) companies are a becoming an important part of today’s Supply chain. 2. These companies offer services that can allow businesses to outsource part of all of their supply chain management function. 3. Many 3PL companies offer a wide range of services including; inbound freight, freight consolidation, warehousing, distribution, order fulfillment and outbound freight. 4. In developed countries like US and Japan, use of 3PL services account for over 50% of the total logistics cost.
Third Party Logistics firm may be defined as an external supplier that performs all or part of a company’s logistics functions.
As companies are concentrating on managing supply chain demand for 3PL’s has increased rapidly. Increased awareness about efficient logistics practices led to the growth of 3PL industry. Because ofthe infrastructural development such as ports, highways, bridges as well as increasing connectivity and rising significance of logistic services in the country, 3PL has vast opportunities in India. Segment-wise market potential of the 3PL services facilitates the better analysis of the penetration level of latest logistic services across different industries in India. Analysts says that, automobile and IT hardware industry to be the largest end-user industry for 3PL services, multinationals being the dominant users. FMCG and retail sectors are among the other sectors which contribute to the 3PL market and have significant potency to grow in future.
The 3PL in India is still in a growing stage because multinational companies are the main user of these services. However, local companies in the industry have also begun to follow the same steps of their MNC counterparts and DR VN BRIMS, THANE starting with contracting out their basic logistic functions. The domestic companies might increase their 3PL usage in the basic logistic functions and irregularly testing with the value-added services but the small and medium companies could now begin to use 3PL services for their basic logistic functions. The multinational companies that are using 3PL in basic logistic functions might adapt to outsourcing value - added services such as inbound logistics, customer support, and reverse logistics. However, taking into account that the most important logistics functions for Indian companies still are transportation and warehousing, which are likely to be outsourced to 3PL in increasing share, a high level of growth is estimated for the Indian 3PL market in the next 5-7 years.
VRM is a category of business activity made possible by software tools that provide customers with both independence from vendors and better means for engaging with vendors. These same tools can also apply to individuals’ relations with other institutions and organizations VRM tools provide customers with the means to bear their share of the relationship burden with vendors and other organizations. They relieve CRM of the perceived need to “target,” “capture,” “acquire,” “lock-in, “ direct,” “own,” “manage,” and otherwise take the lead of relationships with customers. With VRM operating on the customer’s side, Customers are also involved as participants.
Logistics is, therefore, emerging as a key frontier of competition in the future. Good logistics performance requires a trade-off between the need to reduce overall supply chain inventory and lead times, while simultaneously capturing economies of scale and improving customer service for enhanced business performance.
Watsonand Pitt (1989), Sheffi (1990), al have suggested the following reasons for the growth of logistics outsourcing in America: need to focus on core activities, better transportation solutions (e.g., consolidation), cost savings, customized services, reducing inventory, penetrating markets, becoming more active in international shipping, gaining the use of sophisticated technology, need for more professional and better-equipped logistics services.
Palmer,Kimberly, More (2011) have observed that the future usage of third-party logistics services is a function of the current level of satisfaction of the firm with the logistics services The authors have also explored the changes in the level and the nature of outsourcing of logistics services by the user firms. The above studies indicate the high levels of satisfaction with third-party logistics services providers, which will translate into increased outsourcing in the near future. Typically, firms start with the outsourcing of few logistics services, moving over to activities which have maximum impact on logistics performance and thenincrease the scope of usage of logistics services with perceived and quantifiable impact on overall businessperformance.
David Whiteley (2001) mention in his book named “E- commerce strategy, technology and applications” that Electronics commerce is a general concept covering any form of business transaction or information exchange executed using information and communication technologies (ICTs). E-commerce takes place between companies, between companies and their customers, or between companies and public E-commerce includes electronic trading of goods, services and electronic material (Esprit, 1997)
Categories of E-commerce referred from the book “E-commerce Strategy, Technology and implementation” by Gary P. Schneider (2009) are as follows:
1.B2C(Business-to-Consumer)
2.B2B(Business-to-Business)
3.C2C (Consumer-to-Consumer)
4.B2G(Business-to-Government)
Consumer shopping on the web, often considered as Business-to-Consumer (B2C), This paper also focuses on these categories.
As rightly mentioned in the article named “3PL - The Backbone of Online Shopping” that the evolution of e- commerce and shopping for just about anything being only a click away makes it important to have a smooth supply chain management system. With continuous product lines and delivery times that are faster than ever, online simply retailers have become the one-stop shops for many. In order to make sure timely deliveries e-commerce stores need to tackle problems of inventory, packaging, warehousing, shipping, and tracking.
Logistics is a part of online shopping where complications can arise and this is why online retailers require third-party logistic providers also called 3PL. Outsourcing logistical necessities to a service provider that focuses on different areas such as handling inventory and distributing products.
Small and medium scale online clothing retailers are making the most of this capability. The clothing e-commerce market is overflowing with new companies every day, and hence the issue of distributing products in the shortest span of time arises. If an e-commerce portal is unable to accomplish the order in 48 hours, then consumer quickly move to another website or like to buy it from a physical store. Many e-tailers are also offering the speedy process of delivery by giving the choice of receiving products ordered on the same day. Such competitive environments call for partnering with specialized services of 3PL.
Logistics: The key to E success this articles reveals the fact that how 3 PL leads E-commerce business towards success in China. The rapid growth of E-commerce and the subsequent logistics challenges means both e-commerce companies and logistics providers have an opportunity to move quickly to address their problem. The solutions are unlikely to come from e-commerce in-house logistics, for market growth will soon make this unsustainable. The real solutions are more likely to be found in strategic partnerships between e-commerce firms and third-party logistics providers.
1. To study consumers concern before buying the electronics goods ( Question No. 11 & 12)
2. To study consumers behavior with respect to goods delivery by (Correlation test Question No. 14 First & Last Sub Question)
3. To study consumers behavior for electronics goods delivery during festive/sale/offer(Correlation test Question No. 14 Second & Question No.15)
Conduct Regression test between Objective 1 & 2(Delivery Date, Reading Reviews & Sharing Reviews if late delivered)
H 01 : Consumers have no concern before buying the electronics goods online.
H 11 : Consumers have concern before buying the electronics goods online.
H 02 : There is no effect on consumer behaviour with respect to goods delivery by 3PL.
H 22: There is an effect on consumer behaviour with respect to goods delivery by 3PL.
H 03: Consumers behaviour have not affected by electronics goods delivery during festive/sale/offer period Sample Size: 100 respondents
H 33: Consumers behaviour gets affected by electronics goods delivery during festive/sale/offer period.
We have found out the attributes of factor influencing Online Shopping of Electronics Goods.
Then prepared 26 open-ended & close-ended questionnaires and did a trial survey of sample size 30. With the modified questionnaire, we have done an online survey by forwarding link to the respective consumer and getting responses from 100 consumers.
These questions were used to know what are the different attributes which consumer looks while selecting theBrand for Online Shopping.
To record the data the following measurement techniques would be used:
Five, as well as seven options were given to the respondent.
The Likert scale would be used to find out agreement and disagreement of the respondents perceives the attributes of selecting the brand and also the effect if the brand is changed.
Personal questions like Name, Age, Gender, Occupation, Income (Annually) has been asked at the first of the questionnaire Statistical Tool: IBM SPSS Statistics Time Frame: 10-15 Days. Sampling Method: Simple random sampling (SRS) Sample Size: 100 respondents
Research methodology is a way to systematically
The sample for survey would be taken on the following basis.
Sample Frame: Name, Age, Gender, Occupation, Income (Annually)
Sample Unit: Students, Working professionals, and Businessman.
solve the research problem. It may be understood as science of studying how research is done
These research studies are concerned with describing the characteristics of a particular individual or of a group. This study is concerned with specific assumptions, with narration of facts and characteristics concerning individual, group or situation are examples of descriptive study.
ANOVA is widely used by researchers to investigate the underlying relationship between a dependent variable and various independent variables.
It is used when there are multiple samples. It is a statistical tool which is used to analyses the variations among the data and calculate the inequality among the population mean.
It helps to examine ‘n’ number of factors influencing the dependent variables.
Correlation analysis is a quantitative research method which is used when the study involves modeling and analyzing several variables, where the relationship includes a dependent variable and one or more independent variables.
The basic form of correlation models includes unknown parameters (b), independent variables (X), and the dependent variable (Y).
Correlation model, basically, specifies the relation of dependent variable (Y)to a function combination of independent variables (X) and unknown parameters (b)
Y H” f (X, b)
Three major uses for regression analysis are
(1) causal analysis, (2) forecasting an effect, and (3) trend forecasting.
Test Variable: Overall Satisfaction Grouping Variable: 1= Male & 2= Female Here significant value is 0.101 and 0.100 which is greater than 0.05 therefore Accept Null Hypothesis, that means overall satisfaction is independent on gender.
Dependent Variable: Delivery Date & Reading Reviews b Grouping Factor
Online shopping is becoming more popular day by day with the increase in the usage of World Wide Web known as www. Understanding customer’s need for online selling has become challenge for marketers.
Specially understanding the consumer’s attitudes towards online shopping, making improvement in the factors that influence consumers to shop online and working on factors that affect consumers to shop online will help E- commerce organisations to gain the competitive edge over others.
In conclusion, having access to online shopping has truly revolutionized and influenced our society as a whole. This use of technology has opened new doors and opportunities that enable for a more convenient lifestyle today. Variety, quick service and reduced prices were three significant ways in which online shopping influenced people from all over the world.
If huge discounts are arranged by E-commerce site then the consumers buy more goods which lead to late delivery even after the festive offers are over. This affects on the customer buying behaviour from a particular site and the brand is switch by them.
While planning for festive carnival along with inventory management e-commerce organization should also focus on involvement of 3PL for planning following factors:
Also read : E-LEARNING - A BOON TO EDUCATION
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