Evolution of E-commerce Logistics & Supply Chain Management

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Evolution of E-commerce Logistics & Supply Chain Management

In a developed economy like India, evolution of e-commerce logistics represents the latest big changes in logistics and physical distribution networks, which have evolved substantially over the past 45 years or so.

Let’s take a look at the Evolution of e-commerce Logistics.

What is logistics?

Logistics is referred to a supply chain management that allows various e-commerce business in shipping their products to their targeted destination.

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For example, think of the process like this. So,if you are a seller who makes homemade jewelry and sells them in your area. One day you decide to expand your horizons and sell your products in other cities, states and even countries as well. In order to make it possible, you contact a few logistics companies. Once you do that, these e-commerce logistics companies in India will outreach their services towards you and will help you to deliver your product to your customers in different places.

These delivery logistics will plan, execute and control the movement of your product through a confined shipping system. Once you tie up with a logistics partner, you will be able to deliver your goods hassle free.

Evolution of E-commerce logistics

Over the years, the module of e-commerce business has evolved. Not only did it affect the economy but also allowed various logistics industry to grow. These distribution networks have evolved massively in the last 40 years. Let’s take a look at this evolution in excruciating detail.

Evolution of e-commerce logistics

There is a broad evolution in various phrases that are explained through different timelines.

  1. Back in the year 1970, different retail stores were replaced and direct deliveries were carried out by the suppliers and the wholesalers.
  1. In 1980, different retailers decided to streamline their store delivery through distribution centers that would be controlled by them.
  1. Later in the year 1990, these retailers started shipping nonfood products and the foundation of global sourcing took place. This allowed different retailers to set up their own import and delivery centers and exchange goods in a streamlined way.
  1. After that, from the 2000s, as the concept of e-commerce started kicking in, these retailers started developing their e-fulfillment distribution network to keep up with people’s demand, all across the world.

Since then, these logistics are blooming at an equal pace as that of e-commerce and they are not slowing down. The sales and purchase ratio has increased massively and these e-commerce logistics are serving just the right purpose to make the whole concept possible.

The Amazon Effect

It all started 19 years ago. A small online book store started by Jeff Bezos is now on the largest e-commerce giant in the world. With a market share of more than 500 fortune companies, Amazon’s popularity has been spread all across the world.

A simple idea to ease-out people’s lives, where they will be able to buy things without going out of their house, has not only skyrocketed but has also allowed a lot of businesses to flourish. Since e-commerce has born, logistics services for e-commerce in India has also witnessed massive growth.

The low prices and convenience have become the driving forces that are catering to every kind of product in the world. It was not a smooth ride. The sector has witnessed a lot of challenges.

Check out how different order fulfillment strategies from best logistics partner for e-commerce have evolved to eradicate these challenges. Read on…

Supply chain changed to e-logistics

Supply chain changed to e-commerce logistics

Then: Supply chain worked in bulk. The products used to enter the warehouse in bulk and shipped out of the store in bulk. It was mainly useful for the wholesalers who sold products in a big amount.

Now: As the e-commerce flourished, various e-commerce logistics hub were set up. Here products started moving out in bulk as well as in the single piece. They invented a streamlined strategy to deliver products in a different part of the country through a recorded system. This is how different e-commerce started growing through the ages.

Evolution of e-commerce logistics setup in developed markets

The e-commerce growth has been extensively witnessed in the world of fashion, electrical goods, decorative items, and even in the food sector.

E-commerce logistics setup
Source: Alibaba Logistics (China hub)

This wave has made it possible for various shipping partners in India to create a managed distribution center for different demands and has also divided the logistics functions. So as per the latest scenario, there are four different types of logistics.

Mega Fulfillment centers in e-commerce logistics

Different mega fulfillment centers in e-commerce logistics are stocked with different goods and the delivery boy picks from it at an item level. These logistics are actually huge warehouses that work on an area more than 500000 sq ft. They work 24*7 to allow delivery guys to pick up products any time they want.

The parcel hubs

These are small distribution centers that are placed in different areas. These logistics are used for sorting orders as per the area code. This allows relevant parcels to get easily distributed and prevents confusion among the operation team.

The Delivery centers

These centers take care of the last mile delivery when the product reaches the nearest location of a customer.

The logistics aggregator

These are virtual logistics centers. Their actions are based on API integration. This allows various customers to get the exact price quotations for shipping a particular product. The logistics aggregators are a good option to go for since they allow you to manage your business better, while they take care of the entire distribution process through their internal tie-ups. This is probably the latest technique implemented and they hold a lot of benefits for the retail markets. Not only that, but they are also beneficial for shippers, customers, and 3PL service providers. Some of the benefits are:

Benefits of Logistics Aggregators

The technological advancements are not only building up a driving force for the entire logistics and e-commerce sector but also are transforming the way of a better living. These interconnected supply chains are letting businesses to build their online presence and outreach their products to different parts of the world. By collaborating different fields like transport, storage, and management, these logistics are providing service across the globe. There are a lot of latest trends are coming in into this sector and some of the top tech trends are given down below.

The digitization of the supply chain

Combining all the latest technologies, these logistics gave birth to the digitization and redesigned their logistics practices. This process has paced up their work process and allowed them to hold their position in this highly competitive business environment. The whole concept has not only improved the speed and dynamics but has also brought resiliency in the operations of these supply chain.

The digitization of the supply chain

Through this method, these logistics companies not only witnessed the performance graph and but also increased their market revenue. The field is vast and there are a lot of transformative solutions available.

The digitization is helping them monitor their inventory,  manage their warehouse stocks and also make detailed plans about the transport routes so that they don’t have to spend on extra dead mileage.

The use of Artificial intelligence

Different logistics are currently switching to artificial intelligence to automate their daily work process. Different AI-driven technology is building up various virtual calling systems, that helps in reducing return and refund rates.

The use of Artificial intelligence

They also have a lot of other implementation in supply chain and warehouse management. By reducing human intervention they are making the logistics targets much easier, and achievable. The robotics concept has already been implemented in the different supply chain. They are easy to operate and are pretty cost-effective and flexible.

A better risk management

It is needless to say that every logistics considers a tad bit of supply chain risk, and keeps a backup plan for any sort of unfavorable events. The different outsourcing process includes a lot of risk factors. The offshore transporting, maintaining product versatility, logistics security can lead to a disaster if not managed properly.

Hence logistics and supply chain nowadays are bracing themselves up with proper disaster management. Thus different logistics operations are taking up better practices to improve their supply chain management and dealing better with all the risk factors.

A better risk management

There are times when the disaster cant is prevented. Hence they are also laying down rule and techniques for the damage repair and take care of all the disrupted events. They are making the platform more resilient and flexible to create better transparency for the retailers, customers and for them as well.

Using sAAs for managing supply chains

E-Commerce success depends on logistics. Therefore different companies are using up the software-as-a-service model to manage their supply chain operations.

Using sAAs for managing supply chains

The process has gained popularity as the functionality of cloud computing came into the market. This technology allows different logistics business to stave off high fixing cost and helps in easy maintenance with timely upgrades and also looks after the infrastructure-related expenditures.

Betterment of supply chain visibility

The better visibility and a correct supply chain analysis can help a business to grow significantly and forecast its growth for the future as well. Keeping the supply chain transparent and clear can be used to optimize the resources present in the inventory and can ease out their storage and transport process.

An unclear idea about the logistics resources that affect the overall functioning and create confusion during shipment and delivery. Thus an efficient supply chain handling is extremely crucial.

An improved GPS has been a big evolution of E-commerce logistics

One of the latest tech trends in logistics is the use of improved GPS. this helps in determining the real-location of the shipped product. Not only does it helps the customer, but also helps the organization to stay updated on the detailed information of the product.

An improved GPS

Organizations can now easily track their delivery trucks and get the necessities done during any sort of trouble. This reduces fuel utilization and helps the truck reach its desired destination in a much faster way.

E-logistics using social media platforms

Content Marketing or E-mail Marketing strategies are not enough, Social media can impact your business in more ways than you realize.

e-logistics using media platform

Different social media platforms are now helping a lot of e-commerce and logistics to find a suitable way to coordinate with the customers. This is also useful when it comes to sharing business news, giving out information and working on customer feedback as early as possible.

Enabling multiple Payment & Delivery system

One of the best ways to intrigue customer regarding a product is by providing enough choices and discounts for the same.

The multiple payment options & gift wrap options available for the customers just adds the cherry on the cake. With an increased option, it becomes easy for customers to carry out a hassle-free payment.

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This process is not only increasing the e-commerce sales but also allowing the logistics to come to the limelight to will get the product delivered to the customer.

Enabling the Payment & delivery of choice

Understanding third-party logistics (3pl)

The third-party logistics, often abbreviated as 3PL is a form of supply chain management that helps in outsourcing a company’s distribution, warehousing, and other fulfillment services. They specialize in carrying out various integrated operations and work on the market’s supply and demand. They also help in product transportation and even caters to storage and inventory management.

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Over time, as the business of e-commerce flourished, there were a lot of logistics services that came to action. The 1st party logistics (1pl), the second party logistics (2pl), etc. These logistics were called to action to trade products to different countries as well. But a lot of management issues and other logistics constraints led to a downfall of these logistics. But as time progressed different businesses started re-evaluating with working strategies and gave birth to the third party logistics. These third-party logistics became way more polished and eased out a lot of previously present issues

How 3rd party Logistics Stands Out?

A 3rd party logistics provides outsourced logistics and transportation services to its customers. Their supply chain management includes several functions like inventory and storage management, packing and picking goods, shipping, distribution and many more. This type of logistics are not only highly advanced and one of the most dependable forms of logistics but also has its major advantages are discussed below.

How 3rd party Logistics Stands Out?

They have professional supply chain expertise

The people involved with 3rd party logistics are known to have the best industry knowledge. They have the most technologically advanced gadgets and manages all the operation in a smooth and seamless way. They are also capable of advanced reporting and solving all shipment and delivery related issues within a short period of time. These types of logistics allow different businesses to built a- better presence for them and also boosts their confidence to keep going with their work.

They have  a strong resource network

The 3rd party logistics have a wide range of a network that works best for different supply chains. Their chain of management is extremely vast and they provide the most optimized and cost-effective form of logistics. The efficiency of these logistics makes it different from any other similar logistics industry. Not only they work with the best technology, but also helps in cutting down the overall cost of any e-commerce industry.

3pl network

Their services are flexible and scalable

One of the major ways in which these 3rd parties stand out is by providing a scalable mode of transportation. There is no place that these 3PLs can’t reach. They set up their inventory according to the location of different businesses and makes the product exchange between the buyer and seller much easier. Other than this, they help to outreach your business to new territories and allow you to grow every day.

It improves and optimizes your supply chain

Different 3rd party logistics, mostly like iThink logistics help in improving and optimizing the supply chain to ease out the work of different e-commerce businesses. They leverage high-quality virtual calling systems, to pull back the e-commerce economy from the pit and provide a seamless service. These 3rd party logistics also offers tools that will ensure cost-effective functionality.

Conclusion

So the changes have been massive and the results have been great. Therefore the leap from a simple courier service to an enormous supply chain management has been one hell of a journey.

Hope we have covered the major points. Let us know in the comment section about how e-commerce logistics sector have affected your business.

Looking for an e-commerce shipping solution? Get started with iThink Logistics