INCREASE IN E-COMMERCE

INCREASE IN E-COMMERCE

The supply chains adopted by industries have been impacted by the increased use of electronic commerce and online shopping, especially as companies tend to go global. The new technological innovations have impacted on the retail environment, and they have pulled distribution centres and warehouses along with them. While some companies are complaining about the emerging and drastic changes, others have embarked on training their workforce with an objective of ensuring effective management of the omnichannel distribution system. Due to e-commerce, the strategies used by the distribution centres have changed. Initially, the centres were used to fulfil and replenish orders among the stores. However, this has changed, and the distribution centres are being used to support the e-commerce activities of a company.

Within supply chains, the increase in technology has also made firms rely on automated order fulfilment strategies, thus enhancing their efficiency besides effective management of labor requirements. According to Krish Nathan, the Chief Executive Officer at SDI Company, managing various channels at the same time provide an opportunity for a business to have a labor pool that works with it. To support the use of e-commerce, Nathan notices that vendors such as SDI have embarked on creating real-time management solutions that positively impact on the way companies make decisions.

Industry 4.0 has further revolutionized the way people are connecting through social media. This revolution has also been transferred in industries and companies, and it relates to the way employees and machines are linked into a network through the Internet of Things technology. Apart from the adjustment in factories, Industry 4.0 also covers procurement and distribution processes (Szozda, 2017). The 60 technologies associated with Industry 4.0 can be classified into four categories, including analytics and artificial intelligence, connection and data, interactions between human and machines as well as automated machine park.

Adoption of new technology has also created shifts in the labor market. As noted by Bill Leber, a business development manager based at Swisslog, more organizations have become interested in shuttles, robes and besides other automated equipment that enhances person-to-goods movement (Mccrea, 2016). This will lead to loss of jobs where most of the activities within e-commerce were conducted manually. For example, due to increasing online shopping, there will be shortages of warehouses workers and transport drivers since most of their roles will be automated.  Nonetheless, to effectively manage the supply chain, companies will demand more IT and Quality Assurance Managers as a result of the increased level of global business exchange.

Due to the shift emanating from new technology, companies have been able to collect data regarding the delivery time. For example, Amazon has established a one-hour delivery strategy that has motivated other organizations to use the store-to-store transfer approach, shared inventory and in-store picking carts.  In addition, automated solutions or matrix sortation like the one used by SDI helps companies drill units and achieve individual order level. Over the last 15 years, retail jobs have experienced significant changes. For instance, e-commerce increased by 334%, warehouse clubs by 80%, while department stores reduced by 25% (Robert and Karl, 2017).

E-commerce has generated quite a number of rewards for local and global companies, particularly within their supply chains. For example, it has created a closer connection between customers and marketers. This has improved the accessibility of products that were once not easily accessed by consumers. However, exposes companies to various risks ranging from loss of finance to comprising the confidentiality of data. For example, companies will need to invest more in IT infrastructure to ensure their e-commerce strategies fits the requirements of the global market, resulting in strain on the research and development budget. Likewise, vital data of an organization may be accessed by authorized parties by manipulating the new technologies.

References

Mccrea, B. (2016). Retail and e-commerce operations chase accuracy and flexibility. Modern Materials Handling, 71(1), 32-34, 36-37.

Robert, G and Karl, R. (2017). How the Growth of E-Commerce
Is Shifting Retail Jobs. Retrieved from https://www.nytimes.com/interactive/2017/07/06/business/ecommerce-retail-jobs.html

Szozda, N. (2017). Industry 4.0 and its impact on the functioning of supply chains. LogForum, 13(4).