Since the climb of the web, there was a substantial change of the business activity and the shopping behaviour for the buyer (Peterson et al. 1997). In the past years, the buyer used to get consumer items through the physical store (merchant). However, the introduction of it brings an innovative thinking and selection which is the web store (e-retailer). Weighed against the other shopping route, the online store not only creates a new sales environment but also reshape a shopping behavior for the consumer. Mathwick et al. (2001) also comment that the online shopping can be an alternative solution marketing tool for the consumer because of the popularisation of the Internet. In general, although the physical store (shop) and the online store (e-retailer) involve some similar functions such as the product search and the client service, it still has some differences within its supply chain operations which contain the inventory management, the aggregate planning, the distributor relationship and the product delivery. Therefore, the project will analyses the principal difference between the physical store (store) and the online store (e-retailer) and discusses the supply string efficiency through the Amazon, the HMV and the Argos. Beside that, the solutions of the source chain performance improvement and the strength of the info technology will be displayed.
The difference between the physical store (store) and the web store (e-retailer)
Chang (2000) clarifies that the physical store is a specific place that could obtain a face to face service such as communication and purchasing immediately from the sales personnel. Chang (2000) also highlights that the super market, the division store and the shopping mall could be generalised into the physical store (retailer).
With respect to the online store (e-retailer), Haynes & Taylor (2006) claim that the online shopping, that could be implemented by the Internet, is an innovative business deal model called electric business (e-commerce). Chiang & Dholakia (2003) state that the web store could provides some benefits prior to the purchasing. First of all, the web store could reduces the time and cost. In the second place, the online store could achieve a high amount of customisation. Lastly, the web store has strengths for the positioning and the convenience. Dark brown et al. (2003) assert that the efficiency and versatility are two competitive advantages of the online store. Kaufman-Scarborough & Lindquist (2002) contend that the consumer could not only acquire extensive information but also obtain multiple choices through the online store.
Gutman & Mills (1982) describe that the feature of the product and the connection of the shopping are two main distinctions between the physical store and the web store. For example, when purchasing in the physical store, the consumer need to visit the store, to ask the purchase price and also to touch the real product, and then to buy it. Whereas, the web shopping, which only needs the computer and the Internet service, could bring the convenience purchasing activity for the buyer. Furthermore, Farag et al. (2006) stress that the online store (e-retailer) creates the consumer purchasing behavior record through the information technology, in order to increase the customer romantic relationship management. Furthermore, Taher et al. (1996) assert that the relationship with the sales staff is the most attractive factor for the physical store. The buyer could have the pleasure form the connections process which could not be performed by the online store. Furthermore, Alba et al. (1997) point out three essential factors which could effect the purchasing design for the buyer. In the first place, the durability for the physical store is the product syndication, whereas the power for the web store is the digital product market. Second, for the purchase, the physical store has three advantages such as delivery, touch and customer service representative, whilst the online store is endless of their time and space. Finally, for the communication, the physical store utilise the setting of "one to one" or "someone to many", as the web store could adopt more diversification methods such as the mode of energetic communication and the setting of static communication.
The supply string management
In the recent years, the business enterprise competition environment should face not only the short product life routine but also the requirement of customisation that causes the concept of supply string is developed. Christopher (2005) claims that the source chain, which is made by several organises or enterprise, is a network connection. Christopher (2005) also points out that the main concentrate on of the resource activity and string relationship is to create the merchandise or the service. Slack et al. (2007) describe that the supply chain should support the creation activity and syndication process which could expands from the supplier's supplier to the customer's customer. Swaminathan et al. (1998) emphasise that the resource chain is a small business system which could delivers the finish good or the service to the client. Furthermore, the string members within the business system are the supplier, the manufacturer, the distributor, the store and the client. Simchi-Levi et al. (2008) assert that the source chain is a two way process that is merged by the merchandise stream and information stream.
Wisner et al. (2008) contend that the supply string management could integrate the key functions which may contain the materials purchasing, the manufacture management, the requirement management, the distribution planning and the product quality management. Wisner et al. (2008) also highlight that the short term goal of the resource chain management is to reduce the inventory cost and improve the production, while the long-term goal is to boost the customer satisfaction, the marketplace show and the revenue. Christopher (2005) contends that the resource chain management is a chain relationship management which could creates a well value for the customer with a minimal cost. Mentzer et al. (2001) point out that the resource chain management has seven critical activities which include the business behaviour integration, the info sharing, the revenue and risk showing, the business collaboration, the client service aim for, the chain process integration and the long term partnership.
It can be concluded from those explanations that the resource chain management not only handles the supplier romance but also integrates the target of chain member, in order to attain the best value for the client. Furthermore, due to the supply chain management software, the significant change not only influences the maker but also impacts the dealer. Therefore, in the following paragraph, the difference of the inventory management, the aggregate planning, the distributor relationship and the product delivery for the physical store (merchant) and the online store (e-retailer) will be reviewed.
Inventory management
The purpose of the inventory is to balance the uncertainty of the demand and the source. Fogarty et al. (1991) declare that on the resource part, the inventory can prevent shortages also to maintain the operation of the equipment and equipment. On the demand side, the inventory should be able to meet the potential demand, the cyclical demand and the fluctuant demand (Fogarty et al. 1991). Markland et al. (1998) assert that we now have six advantages for the inventory. To begin with, the inventory could meet up with the demand forecasting. Subsequently, the inventory could reduce the price of purchasing. Thirdly, the inventory could reduce the expense of sold-out. Fourthly, the inventory could maintain the self-reliance of the operations. Fifthly, the inventory could make the production task more versatility and simple. Finally, the inventory could protect the business operations, when the price of the raw materials rises. However, too much inventories could cause the challenge of financial liquidity whereas too little inventories could cause the chance of the out of stock.
In order to manage the inventory more efficiency, the e-retailer (Amazon) adopt not only the vender maintained inventory (VMI) with consignment but also the drop shipping and delivery. The vender supervised inventory (VMI) with consignment is employed in Amazon's warehouse management. When Amazon adopts the inventory type of the vender been able inventory (VMI) with consignment, to begin with, the supplier could storages their products in Amazon's warehouse. Second of all, the inventory is handled by the supplier themselves, while the Amazon only has responsibility for offering. Furthermore, the inventory management type of the drop shipment is usually employed by the e-retailer (Amazon) (Hsi 2010). Hsi (2010) also highlights some critical factors that why the drop shipping and delivery is utilised by the Amazon. In the first place, the drop shopping could allow supplier to control the stock easier. Second of all, the method of the drop shipping could reduce the degree of stock for the warehouse. Thirdly, the Amazon doesn't need to set a division for the inventory management because the merchandise could directly be sent by the supplier. Fourthly, the Amazon doesn't need to concern the excess cost of overdue or destruction. Lastly, the drop shopping could decrease the travelling cost when the variety products are ordered in once. In regards to to the physical store (HMV), the amount of sold-out reduction can be an important issue for the physical store (store) that identifies the efficiency of the inventory management. The technique of VMI is still a common technique for the dealer inventory management.
Aggregate planning
Wisner et al. (2008) assert that the aggregate planning, which could be recognized to three categories such as the long range, the intermediate rang and the short rang planning horizon, can be an operation plan for the capacity requirement. In other words, the aggregate planning can be an method of balance the source and demand that could be generated by the demand forecasting, the existing requests and the labor force etc. For the physical store (retailer), the aggregate planning is vital for their functions. For example, the HMV, who adopts a centralised purchasing way for their business functions, requires a reliable aggregate planning to meet the demand forecasting that relate to the inventory management. For the online store (e-retailer), the well aggregate planning cannot only reduce the risk for the hot product but also improve the free cash spin. For example, in the present era, the Amazon medication dosage not necessarily achieves the aim of zero stock. For the hot product, the Amazon supports a large number of shares which is believed by the aggregate planning, in order to improve the overall flexibility of inventory management and the satisfaction of the customer. In addition, due to the permanent historical record data source, the Amazon will make a more correct and complete aggregate likely to have the competitive edge.
The company relationships
In order to achieve a particular goal and profit, two specific businesses maintain a partnership called the supply chain partnerships that could brings the information and risk posting (Maloni & Benton 1997). Vokurka (1998) promises that the well supply chain partnerships cannot only decrease the degree of stock but also increase the business performance. Buzzell & Ortmeyer (1995) assert that the source chain partnership is an ongoing relationship that could achieve the consensus of aim for, insurance policy, business process, circulation and transportation between the dealer and the store. Peng (2006) shows that there are two types of the resource string partnerships for the B2B activity which contains the horizontal cooperation collaboration and the vertical co-operation partnership. Peng (2006) also highlights that the horizontal assistance partnership is well suited for the e-retailer such as the Amazon. In addition, the approach of collaborative planning forecasting and replenishment (CPFR), which should be applied in a well partnership, could declines the problem for the inventory management. Thus, it can be concluded from the research above, to maintain the best source chain partnerships is very important for the shop and the e-retailer.
The product delivery
The Amazon develops their delivery service through the 3rd party logistics such as the DHL (Hsi 2010). Hsi (2010) highlights two factors for the Amazon's product delivery. In the first place, the Amazon offers a function of the order check and the bundle tracking because of their consumer. In addition, the Amazon is applicable some software applications to improve their delivery service which include the warehouse management system, the Oracle, the SQL and the Linux. In terms of the merchandise delivery of physical store (dealer), the merchandise could be provided by the store. For example, when the client purchases the mattress from the Argos, the client could require the store to deliver it and also to give a supplementary cost for the travel. For the other example, when the customer purchases a lot of products which can be more than a certain price from the HMV store, the HMV will provide a free service for the travel. These two circumstances are the common product delivery way for the physical store.
The supply string performance improvement
The third party logistics (3PLs), who could helps the organization to achieve the economies of level through the specialisation within the supply chain network, is a proper option for the supply string performance improvement. Reynolds (2000) asserts that if the third party logistics could create a logistics information platform, which can only help the info exchange from the e-retailer to the 3PLs. Tsai (2007) promises that the function of the 3PLs for the e-business could not only deliver the merchandise but also control the order or the client service. For example, in case of the original business activity, the provider has responsibility to transport the product to the physical store (retailer). Which will make a supplementary cost for the travel. Therefore, if the 3PLs could be utilised in this situation, the company only need delivery their product to the 3PLs. And then, the 3PLs, who could transports right to the customer, will perform a role of "last mile". Besides that, the worthiness added service, which provides the go back management, co-packing and the retail ready POS exhibits etc, is a superb additional service from the 3PLs. That also is another possible strategy which also could improve the supply chain performance. Therefore, it could be concluded that when the development of the supply string is more specialisation, the role of the 3PLs will more and more critical for the physical store (retailer) and the web store (e-retailer).
The enterprise resource planning (ERP) can be an it for the business process improvement and the business enterprise tool integration. Dovenport (1998) asserts that the ERP, which could shares the business enterprise information through the Internet, is an information technology for the business enterprise integration. Lin (2002) promises that whenever the ERP system is put on the organization, there are four advantages could be obtained. To begin with, the ERP system could improve the velocity for the response. Subsequently, the idea of the information showing could be achieved by the ERP. Finally, the operation cost could be dropped because the ERP bring the work flow decrease. Finally, the ERP system could create a much better service for the dealer and the merchant. Thus, if the ERP system could be executed within the resource chain, not only the physical store (merchant) but also the online store (e-retailer) will achieve the mark of cost reduction, flexibility increasing and supply chain performance improvement.
To maintain a proper marriage within the string members is vital for the present day enterprise. Each business or company of the supply string play different assignments and have different responsibility. The purpose of the supply chain management is to combine those resources and operations, in order to attain the final target. Additionally, although the existing partnership is vital, the merchant or the e-retailer still needs to explore the new suppliers that could decline the chance such as the out of stock from the existing suppliers. Thus, the idea of the supplier romance management (SRM), that could web links the suppliers' potential more efficiency, is another strategy for the supply string performance improvement.
The appropriate demand forecasting or aggregate planning, quick response (QR), efficient consumer response (ECR) and collaborative planning forecasting and replenishment (CPFR) are four vital factors for the source chain management that may also influence the chain performance. Inaccurate forecasting might causes the problem of sold-out or the surplus inventory. However, to utilise the information of the QR and the strategy of the ECR could not only improve an with time response but also make an efficient promotion and replenishment. Furthermore, the concept of the CPFR, which is basic on the procedure of the QR and ECR, is a method for process integration between your provider and the shop. The most common approach of the vender monitored inventory (VMI), which really is a kind of the CPFR, could create a shared solution for the marketplace change and customer need through the information writing from the upstream to the downstream. Thus, it is clear that the exact aggregate planning or demand forecasting, QR, ECR and CPFR are four management approaches for the supply string performance improvement.
The competitive edge from the info technology
The e-business, which can be an it for the new commercial activities such as B2B, B2C and C2C, bring an impact for the resource chain. Furthermore, the concept of the electronic supply chain could assimilate the operation process for the company, producer, distributor and merchant through the information technology. After that, a co-operation environment will be created that will bring the benefit for the source chain.
The information technology of the air frequency recognition technology (RFID) brings a competitive benefit for the retailer and the e-retailer. Both of the retailer and the e-retailer could manage and keep tabs on the stock information. Beside, the info technology of the EDI also could provide the service of transaction checking and tracking for the consumer.
The E-CRM (customer romance management) can be an electronic program for the client service management. The e-retailer (Amazon) could analyse the customer's personal data and the historical deal record that could help the e-retailer to infer the shopping behavior or the commitment of the customer. Furthermore, the customer's long term transaction record or search record also could become useful information of the online marketing strategy for the new product. More accurate, in the pre-commercial activity, the E-CRM cannot only deliver the order information but also save the purchasing record to the relevant department or the dealer. Within the post-commercial activity, the data analysis and the info mining will be done, in order to construct the complete customer romantic relationship management database which may support your choice making for the business enterprise operations. In case there is the Amazon, the E-CRM heightens their market share and customer satisfaction. Thus, it can be concluded that the E-CRM cannot only reduce the expense of operation but also enhance the acceleration of response.
Conclusion
The demand and offer always is an important issue for the business enterprise operations. For this reason, the idea of the supply string management is playing an extremely critical role in the current business. Furthermore, many management techniques also are created, in order to make the supply chain management more efficiency. In addition, the service of 3PLs is also a key role for the existing supply chain operations. It really is clear from the research above, the effective of inventory management, aggregate planning, supplier romantic relationships and product delivery could bring the huge benefits for the dealer and the e-retailer. Furthermore, the 3PLs service and the ERP, QR, ECR and CPFR implementation also could increase the supply chain performance for the dealer and the e-retailer. Lastly, the suitable it application such as the RFID, EDI and E-CRM could make a far more efficiency and versatile business environment form the distributor to the shop (e-retailer).
