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E-commerce
E-commerce logistics in supply logistics in
chain management supply chain
management
Implementations and future perspective in
furniture industry 2263
Ying Yu and Xin Wang Received 27 September 2016
Department of Industrial and Manufacturing Systems Engineering, Revised 3 February 2017
Accepted 9 March 2017
The University of Hong Kong, Hong Kong
Ray Y. Zhong
Department of Mechanical Engineering, University of Auckland,
Auckland, New Zealand, and
G.Q. Huang
Department of Industrial and Manufacturing Systems Engineering,
The University of Hong Kong – HKU-ZIRI Lab for Physical Internet, Hong Kong

Abstract
Purpose – The purpose of this paper is to present the state-of-the-art E-commerce logistics in supply chain
management by investigating worldwide implementations and corresponding models together with
supporting techniques via furniture industry.
Design/methodology/approach – Typical E-commerce logistics companies from North America, Europe,
and Asia Pacific are comprehensively investigated so as to get the lessons and insights from these practices.
Findings – Future technologies like Internet of Things, Big Data Analytics, and Cloud Computing would be
possibly adopted to enhance the E-commerce logistics in terms of system level, operational level, and decision-
making level that may be real time and intelligent in the next decade.
Research limitations/implications – This paper takes the furniture industry for example to illustrate the
E-commerce logistics and supply chain management (LSCM). Other industries like electronic appliance
industry are not considered.
Practical implications – Opportunities and future perspectives are summarized from practical
implementations so that interested parties like E-commerce and logistics companies are able to get some
guidance when they are contemplating the business.
Social implications – E-commerce is booming with the development of new business models and will be
continuously boosted in the near future. With large number of enterprises carrying out E-commerce, logistics
has been largely influenced.
Originality/value – Insights and lessons from this paper are significant for academia and practitioners for
considering E-commerce LSCM.
Keywords Logistics, Implementation, Supply chain management, E-commerce, State-of-the-art
Paper type General review

1. Introduction
Logistics and supply chain management (LSCM) has been greatly influenced by the booming
of E-commerce when we are now already overwhelmed by its successes in both developed and
emerging economies. E-commerce LSCM plays an important role in the modern logistics. It was
estimated that E-commerce logistics could cost 40 percent of the price that customers pay for
the goods (Bayles and Bhatia, 2000). In China, it contributed 18 percent of its GDP particularly
in 2014, almost double the average figure of developed economies (Gui et al., 2014). E-commerce
Industrial Management & Data
logistics usually involves three main phases. The first phase is the replenishment of goods Systems
from product manufacturers to distribution centers (DCs) or warehouses. The second phase Vol. 117 No. 10, 2017
pp. 2263-2286
involves order fulfillment at E-commerce DCs through order sortation, picking, and packing © Emerald Publishing Limited
0263-5577
operations. The third phase involves the fast delivery of orders from DCs to customers. DOI 10.1108/IMDS-09-2016-0398
IMDS In the E-commerce LSCM, there are two major types of business models: business to
117,10 consumer (B2C) and business to business (B2B) (Bolumole et al., 2015). In B2C model,
business website is a place where all the transactions take place between a business
organization and consumer directly (Mangiaracina et al., 2015). In this model, a consumer
visits the website and places an order to buy the products. The business organization,
after receiving the orders, will dispatch the goods to the customer. Successful examples
2264 like Amazon.com and Priceline.com are B2C leaders (Rappa, 2008; Ta et al., 2015).
Key features of this model are heavy advertising required to attract large customers,
high investment of hardware and software, and good customer care service (Nica, 2015).
B2B refers to a situation where one business makes a commercial transaction
with another, thus, the transaction volume of B2B is much higher than the volume of B2C.
In a typical supply chain, there will be many B2B transactions involving sub
components or raw materials. But only one B2C transaction specifically identifies
the sale of finished product to the end customer. The purchase of B2B products
is much riskier than B2C products (Ta et al., 2015). The reason is that purchasing a
wrong product or at the wrong terms can put the entire purchasing business at risk
(Sila, 2013).
Third-party logistics (3PL) service providers have been increasing the investments in
expanding their capacities and major E-commerce players such as Amazon, Alibaba,
and JD.Doc have invested heavily in creating their own logistics facilities like DCs
(Ellinger et al., 2003). Businesses have a common expectation for a paradigm shift in
E-commerce logistics to reduce, if not eliminate, the bottleneck. A typical DC may have
Automated Storage and Retrieval Systems which have the ability to sort, sequence, buffer,
and store a wide range of items with high accuracy and efficiency (Ross et al., 2009).
Precision racks allow for high storage density and fast location access. Cranes or shuttles
move up and down aisles with accelerated long-distance travels (Faber et al., 2013).
Load handlers are configured to suit the size, shape, and weight of the loads.
Modern logistics have become the most important means to improve the efficiency of
material flows and to reduce distribution costs in various industries. At the same time,
recent development of E-commerce also contributed to the expansion of the logistics market,
promoting the development of technologies related to logistics. Large number of practices
have been carried out in the E-commerce logistics (Bask et al., 2012; Masmoudi et al., 2014,
Ramanathan et al., 2014). In order to figure out current movement of E-commerce logistics,
this paper gives a comprehensive state-of-the-art review of E-commerce logistics in supply
chain management so as to get the lessons and insights from various practices for guiding
future implementations. This paper summarizes the logistics models and supporting
techniques for E-commerce logistics and highlights the challenges, opportunities, and future
perspectives. Case study methodology is applied in this paper. Yin (1981) claimed that case
study was a systematic research tool which can be done by using qualitative and
quantitative evidence, to find the advantages and disadvantages of the real firms. In our
paper, we searched rich sets of reports, videos, and academic papers from case study
companies to make comparison study based on different supply chain logistics service
phases. Weakness and strength from the practice case are summarized and then
suggestions are provided for future development.
The rest of this paper is organized as follows. Section 2 reviews the business models and
supporting techniques in E-commerce LSCM. Section 3 presents a worldwide
implementation categorized in three major areas like North America, Europe, and Asia
Pacific. Section 4 presents the insights from practices in terms of the success factors and
guidelines for future trends. Challenges and opportunities are summarized in Section 5
which highlights the future perspectives including business models, technologies, and
implementations. Section 6 concludes this paper.
2. Logistics models and supporting techniques for E-commerce LSCM E-commerce
2.1 Self-support model logistics in
Many companies choose to build their own logistics service network, because the logistics supply chain
service quality, especially the last-mile service, is one the most important factors for
successful E-commerce business (Lee and Whang, 2001). As the consensus in E-commerce
management
industry, distribution and after-sales service is a bottleneck for industry development; so,
continuous improvement of the service level is an urgent requirement (Delfmann et al., 2002). 2265
Individual supply chain member feels hard to optimize the whole supply chain operation
(Fugate et al., 2006). An effective way for controlling the most part of the supply chain is to
manage the logistics from storage to distribution. In this way, it is also able to control the
logistics service reliability and variability.
However, self-support logistics network always lead to a problem of little profit and
capital shortage (Damme and Amstel, 1996). And the company will be under great pressure
to manage the logistics service department which always has a large number of staffs and
other resources. Moreover, in E-commerce business, the logistics service has to cover all
over the country or even all over the world. Self-support logistics network is hard to fulfill all
the logistics service requirements. Thus, corporation strategy is proved to be most effective
with logistics service capacity expansion (Lynch et al., 2000).
In real-world practice cases, most companies choose a balanced way, such as utilizing
self-support system to ensure part of products’ or regions’ logistics service in high level, or
strictly controlling the important parts’ decision-making and execution processes, and
outsourcing some parts of the logistics service to a 3PL company (Hultman et al., 2009).
The standard to classify products or regions is based on the supply chain management
strategy and tactic of the specified company.

2.2 Outsourcing model

Outsourcing is also a quite important model in E-commerce logistics. The first reason
why companies choose it is that outsourcing can reduce the burden of enterprises in a
degree (Xiao et al., 2014). They do not need to invest a lot of resources so that they can
concentrate on their main business. As a consequence, the core competence and
competitiveness can be increased. Additionally, by outsourcing, companies are allowed to
reduce the fixed assets investments, including field, warehouses, fleets, information
systems, and other equipment related to procurement logistics (Huq et al., 2015).
Therefore, the turnover rate of capital is accelerated. Another argument for outsourcing is
the oversupply of goods in current social economic system. Customers’ demands are
increasing. They now require for customized goods with more varieties and
smaller quantities, making the logistics more difficult to master. Outsourcing can help
companies to allocate sources in an export-oriented manner so that risks are reduced
(Govindan and Chaudhuri, 2016).
However, it has to be admitted that outsourcing still has its disadvantages. First, the
companies lack of control force over the whole logistics (Hung Lau and Zhang, 2006), as they
need to negotiate with the logistics corporations. Meanwhile, the logistics corporations’
service level may fail to meet the customers’ requirements. The efficiency might be
relatively low when companies deal with the customers’ complains. Second, logistics could
also contribute substantial profits (Yi, 2006), but companies are not able to get this
part of margin when outsourcing is chosen. Last but not least, logistics can play an
important role in propagate companies. The employees of logistics corporations cannot
introduce the functionalities and characteristics of a product to customers, so that they are
not able to enhance the credibility.
Considering the above analysis, quite a few companies take the method of
outsourcing, aiming at constraining the scale of companies within a controllable range.
IMDS In this way, they may focus more on their core business. Taking the disadvantages into
117,10 consideration, they may also choose self-built manner in some areas to have a better
control on the whole chain.

2.3 Supporting techniques

The main supporting techniques for E-commerce logistics include E-commerce system,
2266 warehouse management system (WMS), and transportation management system (TMS).
For a typical company which is able to carry out E-commerce business, an online system or
platform is necessary. Large numbers of trading systems are in use nowadays. Customers
then are able to search various merchandise. Therefore, a soft computing method was used
to create a profile to examine how the events affect each other in an E-commerce system
(Takacs et al., 2015). Ding (2013) presented a discussion about the application of business
E-commerce platform in a mechanical processing enterprise to achieve green and
sustainable development. This paper shows the possibility for small and medium-sized
manufacturing companies to use the E-commerce system for boosting their products widely.
Social commerce always relates to E-commerce which is undergoing an evolution using
Web 2.0 capabilities to enhance customer participation. Huang and Benyoucef (2013)
introduced a new model to guide social commerce design related to E-commerce systems.
This paper applies the proposed model into two leading platforms: Amazon and Starbucks
on Facebook, including individual, conversation, community, and commerce levels.
Victor Chen et al. (2013) studied the collaboration quality on B2B E-commerce system.
They proposed a model in the background of users, employing structural equation
modeling-partial least square to analyze their proposed hypotheses. Recently, with the wide
use of smart devices like mobile phones, E-commerce system has been extended into these
devices. A multi-agent recommender system for supporting device adaptability in
E-commerce was discussed (Rosaci and Sarné, 2012). A new multi-agent system named
ARSEC is introduced and each device exploited by a customer is related with an agent
which has the relationship with the E-commerce system.
WMS plays a critical role in supporting the E-commerce logistics. Large number of WMS
practices has been reported in worldwide. One of the major functionalities for WMS is real-time
inventory visibility. To this end, a Cloud Computing-based WMS was presented in Japan to
integrate incoming, logistics center, store and return goods inventory (Wakabayashi et al., 2014).
To track and trace the items in WMS, radio frequency identification (RFID) technology and the
Electronic Product Code (EPC) network have been used for the B2B E-commerce supply chain
management (Wamba et al., 2006). This paper reveals that WMS is able to capture real-time
status so as to improve shipping and receiving processes. A case study from the retail industry
was presented in the merging mobile B2B E-commerce where WMS also uses RFID-EPC
network through real-life case (Wamba et al., 2008). In the implementation of WMS, a workflow-
supported inter-enterprise system was presented for a large motorcycle company which enables
the firm to integrate the E-commerce model (Liu et al., 2005). This independent inner system can
manage the business processes across the independent company. As the development of agent-
based solutions, agent-enabled WMS is also attacked large attention. An agent-based WMS for
trading partner management in B2B was illustrated to use organizational knowledge to process
internal workflows (McGregor and Kumaran, 2002). This paper proposes a framework which is
able to analyze workflow audit logs utilizing agent technology and a case study is presented to
show the participation of suppliers to examine inter-organizational order fulfillment workflow.
In recent years, intelligent concept is widely used in various IT systems including WMS.
For B2B E-commerce to achieve effective and efficient management of large number of goods,
an RFID-based intelligent WMS was demonstrated to enable involved all members to analyze
their activities (Fosso Wamba, 2012). An intelligent and lean WMS with RFID technology
was presented to improve the warehouse efficiency driven by the E-commerce system where
customers can place an order to buy various merchandise (Chen et al., 2013). The case data show E-commerce
that the processing time of data transmission to WMS at receiving and shipping docks are logistics in
reduced by 99 and 89 percent, respectively. supply chain
In E-commerce logistics, the transportation function is very important. Bardi and
Tracey (1991) carried out a survey of transportation outsourcing from US practices. It was management
observed that most of the companies’ outsourced transportation is satisfied with the service.
Therefore, TMS is widely designed and developed to support E-commerce logistics. 2267
A parallel traffic management platform for urban transportation system was introduced to
integrated control and management based on an artificial, computational, and parallel
approach (Wang, 2008). This paper demonstrates a practical case in China for controlling
and managing of the complex transportation with social and behavioral dimensions.
For dealing with the transportation of online to offline (O2O) E-commerce markets, a hidden
semi-Markov model-based reputation management system was presented (Xiao and
Dong, 2015). Transportation evaluation is tested by the Monte-Carlo simulations and a real
case study based on O2O E-commerce platform shows that the proposed system is able to
provide a realistic solution. One of key components in TMS is fleet management.
Transportation agencies aim to achieve a sustainable TMS since various fleets should be
supervised. To this end, Mehar et al. (2015) proposed an integrated architecture for
sustainable TMS so as to reduce pollution and greenhouse gas emissions. Also, considering
the energy sources, electric vehicles are used in TMS. Tie and Tan (2013) reviewed
state-of-the-art of energy management in TMS and the vehicle technology was highlighted.
Currently, Big Data-driven smart system for TMS has attracted large number of attentions
from both practitioners and academia. Fiosina et al. (2013) used Big Data processing
and mining for an information and communication technology-based smart TMS.
They presented a real-life implementation so as to optimize the fleet management in terms
of scheduling and execution.

3. Worldwide implementation
This section presents a review of worldwide implementations from North American,
Europe, and Asia Pacific. Several leading companies are revealed such as Home Depot,
Amazon, IKEA, JingDong, etc., so that key observations and insights could be summarized
for guiding other small and medium-sized enterprises (SMEs) for implementing the LSCM
under E-commerce era.

3.1 North America

3.1.1 Home Depot. Home Depot is an American retailer company selling home
improvement, construction products, and service. Until 2014, it has more than 355,000
employees, and runs more than 2,000 superstores that are located in America, Canada,
Mexico, China, and so on. In the year of 2006, in order to adapt to the dramatically increased
E-commerce market, Home Depot decided to remodel its traditional supply chain into
omni-channel supply chain and upgrade its logistics service network (Maloney, 2009).
In the traditional model, each retailer store has a logistics management department, which
is in charge of the replenishment, storage management, and in/out products flow controlling.
When suppliers receive the stores’ replenishment orders, they have two ways to deliver orders
to retailers. One is directly sending products to the store and the other is using Home Depot’s
DC to ensure cost-effective transportation. However, in real situation, 80 percent of the orders
are sent to the retailers directly because each store has its unique replenishment cycle and
requirement so that it is hard for suppliers to realize full truckload (TL) during one piece of set
time. The company’s legacy network of distribution network is also hard to achieve
customers’ service expect since the E-commerce orders are increased at dramatic speed.
IMDS For the Line-Haul phase, Home Depot set a centralized inventory and replenishment (I&R)
117,10 department in the corporate’s headquarters and deployed a new network of DCs for store
replenishment. The new I&R department is responsible for all the stores’ inventory
management by replacing replenishment team for individual store. The centralized
replenishment improves the demand forecast accuracy, gains more power for Home Depot
while negotiating with suppliers as the single order is much larger, and it also brings benefits
2268 of cost-effective transportation, high top-selling stock keeping units (SKUs) availability, and so
on. Instead of taking a lot of inventory, Home Depot built 18 rapid deployment centers (RDCs)
in the North American area. As a result, suppliers no longer send thousands of orders to the
retailer stores, but send 18 aggressive orders to the RDCs. Then these products are distributed
to the rest of company’s logistics network (Bond, 2015a). Moreover, Home Depot requires that
the suppliers’ orders must be arrived strictly at a special time window, and products are not
allowed to stay in the RDCs for more than 24 hours (Maloney, 2009). The transformation of
information flow and physical flow network in Home Depot’s Line-Haul phase is shown
in Figure 1.
In the last-mile distribution phase, in order to address E-commerce logistics service
challenges, Home Depot built large new direct fulfillment centers (DFCs) with considerable
information and automation technique investment to improve its logistics service network.
These DFCs located in metropolises are response to fulfill customers’ demand of high volume
products, private brands products, extended assortments, strategies opportunities projects,
seasonal products, etc. Besides the DFCs, there are still two channels to fulfill customers’

Supplier Store Store

Supplier

Home Depot Centralized

Inventory and Relenishment
Department

Information Flow

Supplier Store
Store RDC
Supplier

Figure 1.
Home Depot’s
Line-Haul phase
remodeling
Physical Flow
requirements. One channel delivers the ordered items from suppliers to customers. The other E-commerce
channel delivers the goods from retailer stores to customers who could choose to pick up logistics in
products in a nearby store. Generally, live plants, bulky domestic products like lawn tractors, supply chain
and other similar products are shipped directly from suppliers to customers, while the retailer
stores’ channel can response to the rest kinds of products. By applying this logistics service management
network, 90 percent of the online customer orders can be fulfilled in two working days and
customers have various ways to shop and pick up their products (Highfield, 2014). 2269
Home Depot develops a flexible operation process in the DFC to achieve quick and effective
order transshipment which is shown in Figure 2 (Bond, 2015b).
Despite there are many information systems (yard management system, WMS,
warehouse control system, voice picking system, rack and pick modules, etc.), the flexible
order fulfillment operation system in DFC still deserves to be mentioned. First, according to
orders’ information, replenishment tasks are generated in the beginning. Second, order
picking is executed when the replenishment work lasts for 30-60 minutes, and different
types of products are picked in a specified way which is conveyable or non-conveyable.
Third, single-line orders are directly sent to the packing area, while multiple-line orders
are sent to the put wall area for consolidation. The first item of multiple-line order has to
wait for the rest items. For each order, the waiting time in the flush put wall is ensured to be
less than one hour in this system. In general practice case, the waiting time ranges from a
few minutes to half an hour. A total of 12 put walls in Locust Grove’s DFC can consolidate
480 multiple-line orders at each operation wave (Bond, 2015b).
3.1.2 Lowe’s. Lowe’s is the second largest home improvement retailer company in
the North America. Until the year 2015, there are 1,857 Lowe’s retailer stores all over the
world. Figure 3 presents the number of stores of Lowe’s worldwide from 2004 to 2015
(www.statista.com/statistics/258132/number-of-stores-of-lowes-worldwide/). Most of them
are located in North America, and some are located in Austria. Lowe’s is recognized as a
top service provider in home improvement industry.
Lowe’s business model is very similar as the one used by Home Depot. Although Home
Depot has larger market shares which improve its supply chain management continuously
to save cost, Lowe’s has its features to keep increasing in the home improvement market
(Gukeisen, 2005). First, instead of quick expansion in metropolis, Lowe’s chooses to explore
the consumption potential in small and medium size cities. Second, Lowe’s adds the

Figure 2.
The layout of DFC
in Locust Grove
IMDS 2,000
1,832 1,840 1,857
1,749 1,745
117,10 1,649
1,710
1,534
1,500 1,385
Number of stores
1,234
1,087
1,000 952

2270
500

Figure 3.
Number of stores from 0
2004 2005 2006 2007 2008 2009 2010 2011* 2012 2013 2014 2015
Lowe’s worldwide
Year

categories of products, invests for store decoration, redesigns the layout of retailer stores,
and finally attracts a lot of women customers (Fogel, 2002). Third, Lowe’s builds
its own service team to cover logistics service, sales guidance, installation service, design
service, and so on. Lowe’s also transfers part of do-it-yourself (DIY) products into only
buy-it-yourself products, and offers special service to different types of customers.
In Lowe’s, customer service is the first priority. Services provided to customers are one of
successful factors under a high competitive marketplace. It ensures that Lowe’s sales keep
increasing steadily every year (Timothy Thacher and Stuorius, 2007). However, the product
diversity, personized service, and quick expansion in smaller cities cause some problems of
cost control. As E-commerce order emerges, these problems will become more and more
serious. Lowe’s should find a balanced way between high customer service and
cost-effective supply chain management in the future.
3.1.3 Amazon. Amazon is an E-commerce and cloud computing company. It is the
biggest internet retailer in the American. It began as an online bookstore but its current
business scope covers DVD, blue ray, CD, video game, electronic, furniture, food, toys,
jewelry, and so on. Amazon has independent sales website facing different countries and
areas, including the USA, the UK and Ireland, France, Canada, Germany, Italy, Spain,
Netherlands, Australia, Brazil, Japan, China, India, and Mexico.
Amazon saves a lot of storage costs by integrating the inventories in DCs and partners’
warehouses. Then there is no need for Amazon to keep a high level of inventory like
physical retail stores (Chiles, 2005). The determinants for locating DCs consist of distance
from customer intensive places and level of taxes. Within a DC, Amazon has different
processing procedure and equipment when dealing with various product groups.
Those products which are easily classified and transported are stored in highly
automated equipment (Hays et al., 2005), while those irregularly shaped products are
handled by equipment of low-level automation.
When dealing with inter-city transportation, Amazon sets some injection points, i.e.
transportation hubs (Cronin, 2014). They are located in the districts where customers are
highly concentrated to save cost. Orders are integrated in the DCs first. After that,
TL shippers will supply the long-haul shipment service, carrying them from DCs to injection
points. As the unit mile costs for less than TL and TL shippers are relatively low, the overall
transportation costs could be saved (Oti, 2013).
In the last-mile delivery, the goods are handled by those parcel carriers like UPS and
USPS (Boyer et al., 2005). Parcels are unloaded and sorted first in the transportation points,
and then delivered to customers who are allowed to choose various service windows at
different prices. UPS system will then transport the parcels after they arrive at a zone E-commerce
according to customers’ options. logistics in
Amazon offers three different patterns each of which has its own supply chain model. supply chain
Within these three patterns, the roles that Amazon plays of are a seller, an intermediary
agent, and a comprehensive E-commerce service provider. management
When Amazon plays the role of a seller, the front-end online store is the core part of their
business. Amazon is responsible for the front-end customer relationship as well as back-end 2271
logistics. Once a customer places an order, Amazon will decide which DC will deliver the
goods for that customer and then complete the order. The entire process consists of picking
up the goods, selecting, packaging, shipping, and so on. Another pattern in which Amazon
act as seller is the Syndicated Stores Program. In this program, the third-party companies
sell their goods through Amazon website, while Amazon takes charge of supplying
technology and logistics service.
The second role is intermediary agent. It introduced a program called Marketplace and
Merchants @ programs which enable a third-party seller to show their products on
Amazon website. Marketplace serves individual sellers and small businesses, while
Merchant supplies service to major companies. Within this program, Amazon is in
charge of front-end consumer relationship and provides technology support. However, the
functions of holding inventories, realizing and delivery service are not included.
As a result, the supply chain delivery service is relatively weak. In addition, as the
marginal cost of supplying these kinds of service approaches to zero, the third-party sales
increase Amazon’s profit in a degree.
As a comprehensive E-commerce business service supplier, Amazon provides some
technological infrastructures, aid for website design, and experience on shop design
for some companies. This pattern allows retailers maintaining their own brands and
the ownership of web client. Then the retailers could realize network implementation
with the help of Amazon.

3.2 Europe
3.2.1 IKEA. IKEA is a furniture company from Sweden. It is famous for flat design and
low-price furniture products. Until the year 2014, IKEA has 349 stores which are located
in 43 countries over the world, most of which are in Europe, and the rest are dispersed in
America, Canada, Austria, and Asia (Bai, 2011).
The successful story of IKEA’s logistics cost control starts from the product design.
IKEA’s design department is located in the enterprise’s headquarters in Sweden. Every year
thousands of new products’ blueprints are sent out from this department to IKEA’s
suppliers. All of these new products are enable to be packed in flat and standardized
packages (Liu and Hou, 2011). This design plays an important role in logistics efficiency and
cost saving.
IKEA has more than 2,000 suppliers all over the world. In order to transport products
from suppliers to retailer stores, the company operates 31 centralized DCs in 16 countries.
In this Line-Haul phase, IKEA chooses to deliver products by boat/truck/rail to control
transportation cost. Only less than 10 percent products are sent by air. In the future, IKEA
will buy more rail lines in Europe and more Line-Haul deliveries will be completed by train.
Because most of IKEA’s (2013) SKUs are in standardized packages (only three kinds of
pallets are used in IKEA’s warehouse), the DC of IKEA can realize high automation. Around
20 percent of the SKUs but account for 80 percent of volume are supported by automatic
storage and retrieval facilities (e.g. automated storage/retrieval system, conveyors, high bay
pallet rack, conventional pallet rack, WMS), and the rest 80 percent SKUs which only
account for 20 percent of volume are handled by operators (Liu and Hou, 2011). Those high
IMDS automation DCs help IKEA to achieve fast and effective transshipment (each stacker
117,10 extracts goods from DC can be done from ten seconds to two minutes).
The location of each IKEA’s DC has been demonstrated so that the replenishment route
from DC to stores is optimized (Trebilcock, 2011). The principle of deciding the location is
that if the DC is response to the fast-moving consumer goods, it should be near the relative
stores to ensure the goods’ availability, whereas for slow product flows, the distribution
2272 cost is considered as first priority. The final objective is to minimize the total cost
(Trebilcock, 2011).
During the last-mile distribution phase, IKEA encourages customers to DIY. E-commerce
orders are suggested to be picked up by customers in the nearby store. For those who still
requires for delivery, IKEA (2016) will charge a considerable distribution fee. In storage
areas, the shelves are well designed for customers to get their products easily, and helpers
are available in the picking area in case any assistances are needed (Banker, 2009).
Since most of IKEA’s products are flat packed, most customers can transport their orders
by car. IKEA always provides large car parking areas for customers near the store.
Moreover, packaged service is offered near the exit of the store with well-trained staffs.

3.3 Asia Pacific

3.3.1 JingDong. JingDong is the second largest E-commerce company in China, it sales
millions of products on its platform. According to the company’s latest annual report, in the
second season of 2015, the total trading amount is 11.45 billion RMB and the number of
orders is more than 0.3 billion.
Though JingDong has to deal with enormous number of orders every day, its fast and
reliable logistics service could be guaranteed. There are various logistics services provided
by JingDong, such as “211 program,” “next day delivery,” “3 hours delivery” (Cui, 2014).
As the E-commerce business is increasing dramatically in China recently, many companies
have the big problem of logistics service, while JingDong achieves more than 95 percent of
positive feedback rate and zero complaint from its customers.
Until June 30, 2015, JingDong has built 166 big warehouses in 44 cities, and seven
logistics centers as its own supply network to cover the whole country. Those logistics
centers are located in Beijing, Shanghai, Wuhan, Xi’an, Chengdu, Shenyang, and
Guangzhou. Moreover, JingDong also cooperates with other companies, attracts
high-quality suppliers to open their own online shops on JingDong’s platform, and
JingDong provides logistics service for them (Guo, 2011). When a customer places an
order on JingDong, the order might be picked up in JingDong’s warehouse or other
supplier’s warehouse. After then, JingDong’s fleet or supplier’s large truck are used for the
Line-Haul phase.
In the second phase, no matter whether the products are from the suppliers or JingDong’s
logistics centers, they are accumulated at JingDong’s DC for transshipment. Starting from
this phase, JingDong takes over all the products’ logistics service (Wei Guo, 2013).
In the last-mile distribution phase, JingDong employs deliverers with company’s uniform
and trains them to provide a standardized service. For those customers failing to receive
their orders, JingDong also provides other ways, such as PUDOs where customers can pick
up their order from specific cabinet using a password (Xu et al., 2011). Customers can also
choose to pick up their orders in nearby convenience stores which are called self-pickup
points. There are 4,142 self-pickup points all over the country, covering more than 2,043
towns and districts in China.
The success of JingDong’s logistics system is based on a fast expansion of logistics
network (Hu, 2013). In 2007, JingDong started to build its own warehouses which are located
in Beijing, Shanghai, and Guangzhou. In 2009, JingDong increased the warehouses’ capacity
in Beijing, Shanghai, and Guangzhou, and built a new warehouse in Chengdu. Moreover, it E-commerce
operated 26 delivery stations in 26 cities. From 2010 to 2011, JingDong increased all the logistics in
warehouses’ capacity again, and finally formed super logistics centers in the four big cities, supply chain
and added 20 medium warehouses and 50 delivery stations were built. In the year of 2014,
JingDong built seven logistics centers in Beijing, Shanghai, Guangzhou, Shenyang, Wuhan, management
Chengdu, and Xi’an. The Asian No. 1 super warehouses (Asian No. 1 is the largest modern
operation center with highest degree of automation in Asian B2C industry) in Shanghai and 2273
Guangzhou came into service, and the number of medium warehouses achieved 118. In the
year 2015, those seven logistics centers were upgraded with higher degree of automation and
larger capacity, and more medium warehouses were completed. According to JingDong’s
second season financial report of 2015, JingDong had built 166 warehouses, 4,142 self-pickup
stations and delivery stations. Thus, the logistics service network covers all over the country.
However, JingDong’s self-support high-quality service cannot cover every village or
town of China. So these parts of logistics service are outsourced to other 3PL companies.
JingDong also cooperates with some third-party fleets for the Line-Haul transportation, and
applies the vendor-managed inventory model to use suppliers’ warehouses ( Ji-yue, 2011).
While the fast expansion makes JingDong enable to provide a good logistics service to
customers, it also brings big problems to JingDong, such as the management of the huge
company. There are more than 200,000 staffs and this number still keeps increasing.
Additionally, JingDong ranked No. 2 on the Losing Enterprises Ranking List of China with
5 billion RMB in the year 2014.
3.3.2 GuoMei. GuoMei is the largest household appliance retailer in China. It operates
more than 1,200 stores with more than 300,000 staffs in China and its annual sales amount
achieves 100 billion RMB. GuoMei was founded in 1984 and launched its E-commerce
platform in 2011. As the first company to try the B2C plus physical store model, GuoMei
started to improve its supported logistics system in the same year. Table I summarizes
the characteristics of GuoMei’s logistics network operations.
GuoMei concentrates logistics investment on building centralized DCs. Since 2002 when
the company’s logistics management department was set, GuoMei has already built 25 DCs,
and the total warehousing area is 232,000 square meters (Wang, 2005; Huiqin et al., 2012).
In order to keep pace with the expansion of retailer network and sharp increase E-commerce
market, GuoMei decided to build seven central distribution center (CDC) in first-tier cities,
40 regional distribution centers in primary markets, and small DCs to cover the secondary
markets. Many advanced techniques are applied in those CDCs, such as AS/RS system,
automated-guided vehicle, RFID, information management system like WMS, ERP, and so
on (Gao, 2007). Around 300 suppliers of GuoMei are responsible for the Line-Haul
transportation, and products are sent from manufacturer’s warehouses to GuoMei’s DCs.
In the last-mile distribution phase, GuoMei outsources most part of logistics service.
It owns only 186 trucks and the rest 4,800 trucks are belonged to 3PL companies.
In addition, GuoMei’s 11,000 deliverers and most logistics service providers are from
outsourcing companies ( Jiang, 2007).

Strategy Control the cost for first priority

Model Outsourcing + self-support
Cost The logistics cost of one-off investment is low, the logistics model is flexible which is also easy
for GuoMei to control the cost
Service The service level of outsourcing part is hard to control Table I.
Information Because the third party join in the logistics service network, the direct information The characteristics of
transformation is hard to realize, which increases the risk of information asymmetry GuoMei’s logistics
IMDS 4. Insights from practices
117,10 Some insights could be obtained after reviewing the above practices worldwide. Take Home
Depot and Lowe’s for example, Figure 4 presents a comparison of their stores. They are the
main players in US home improvement industry by selling appliances, kitchen fittings,
lumber, building materials, plumbing, and other home improvement products. These
“Big-box” companies control almost the entire home improvement market. It was reported
2274 that Home Depot and Lowe’s as the two best home improvement store chains in the USA,
based on customer satisfaction.
Demand for home improvement products is associated with the demand for housing.
Therefore, any change in sales of new and existing homes significantly impacts the
industry’s performance. In 2013, total sales of home improvement retailers in the USA
generated approximately USD309 billion. It is estimated that in the coming five years, the
demand for home improvement products will be increased stably.

4.1 Success factors analysis

After the practice review, several success factors contributing to the companies’ excellence
in LSCM are presented in Table II. This table analyses the supply/manufacture, line-haul,
warehouse, and distribution along the supply chain so that lessons and insights could be
referenced by practitioners and academia.

4.2 Guidelines for future trends

From Table II, it can be seen that these companies are adopting different strategies for
optimizing the LSCM management. Therefore, companies are suggested to establish their
strategies in accordance with their own visions, missions, and characteristics.
Cost-oriented companies may refer to Home Depot and IKEA. In the sourcing stage,
centralized implementation strategy will equip the company with a stronger bargaining power
so that purchasing cost is saved to a large extent. Information sharing with the suppliers is
also encouraged to reduce the lead time and cut down the inventory holding cost.
In manufacturing stage, design for logistics is important. Standardization and postponing
differentiation will save the production cost as well as the logistics cost. Especially, IKEA is
greatly benefited from this strategy. It usually delivers components instead of the whole piece
of the furniture so that they can be packed in flat and standardized packages. In this way, the
space of the truck can be made full use of to save the transportation cost. Companies may take
this as a reference when designing or manufacturing their products. Modifications on the
business model are needed without doubt. In the distribution segment, these cost-oriented

2,500
2,252 2,256 2,263 2,269 2,274

2,000 1,832 1,840 1,857

1,745 1,754
Number of stores

1,500

1,000

500

Figure 4.
0
Numbers of stores Home Depot Lowe’s
from Home Depot
DIY Chain
and Lowe’s
2011 2012 2013 2014 2015
Study
E-commerce
case Supply/manufacture Line-haul Warehouse Distribution logistics in
supply chain
Home Centralized Cost-efficient line-haul Rapid deployment Direct fulfillment
Depot implementation gains is realized by centers (RDC) are built centers (DFC) are management
more negotiation transporting most for fast centralized located around big
power with suppliers products in full implementation cities to cover
Information sharing truckload from Multiple IT E-commerce orders 2275
with suppliers for supplier to Home technologies support Customer can pick
fast and accurate Depot’s rapid fast transshipment in up the order in retailer
implementation deployment center the RDC shop, or the third-party
logistics company
would deliver it
to customer
Lowe’s Add the categories Suppliers are in charge
Lowe’s build online Lowe’s has its own
of products to of transporting fulfillment centers to service team to cover
attract customer products to Lowe’s cover E-commerce last-mile logistics
Build long coordinate distribution centers or
orders service and other
relationship with retail stores Retail stores are used value-added services
varies suppliers as warehouses too
Amazon It has a large business
Transportation hubs The inventories in DCs Parcel carriers will
scope which covers are set to facilitate and partners’ handle the last-mile
various products the inter-city warehouses are delivery, because they
Amazon has 3 differenttransportation integrated to save are more flexible
business patterns so LTL and TL are storage cost Customers are allowed
that the suppliers selected because of Products of different to choose various
may choose the their lower unit groups are dealt service windows at
most suitable way mile cost with by different different prices
to cooperate equipment and highly
with Amazon automated equipment
is adopted there
IKEA IKEA design the flat Most products are sent More than 30 high IKEA provides
packaged products and by boat/truck/rail for automation centralized package service, large
more than 2,000 cost saving, and IKEA distribution centers parking area, and flat
suppliers around the plans to buy more are located in 16 designed products to
world manufacture rail lines countries for quick encourage customers
those products replenishment pick the order
Set quality Retail stores are used by themselves
management center as warehouses too Delivery service is
to control the also offered, but
products’ quality the charge is high
JingDong There are many kinds JingDong provides JingDong built 166 big JingDong builds its
of suppliers on line-haul logistics warehouses located in own logistics service
JingDong’s platform: service for suppliers. 44 cities, and 7 team to fulfill last-mile
VMI (vendor manage And it also coordinates logistics centers to delivery; it is famous
inventory) with the third-party cover the whole county for its high logistics
The third-party logistics companies service quality
suppliers to build complete
Self-built warehouses line-haul network
for supply
GuoMei It mainly focuses on the Around 300 suppliers GuoMei invested It outsources most of
household appliance are responsible to the heavily in building the distribution service.
and becomes the larges Line-Haul distribution centers 4,800 trucks are owned Table II.
household appliance transportation (DC). They have at by the 3rd party Success factors in
retailer in China least 7 large central logistics companies various segments
DC, 40 regional DC to along the
cover the market supply chain
IMDS companies usually cooperate with a 3PL company. In this case, they can focus on their
117,10 main competence and leave the logistics to their logistics partners. Thus, the cost of building
their own delivery facilities or teams is saved.
However, the cost-oriented companies are exposed to some problems as well. The first
problem is that the products may fail to satisfy the customers’ needs. It is true that
standardization can save the manufacturing and the delivery cost, but customers may prefer
2276 customized products considering the trend of customer individualization. Another problem is
the service/product quality control. The control on the last-mile logistics service is weak
because it is usually handled by the third party. Therefore, it is suggested companies such as
Home Depot of IKEA could have better customer segmentation. For those important
customers, they may provide better last-mile logistics service to improve the customer
satisfaction. Some new technologies such as RFID can be adopted to trace the materials
quality from the very beginning. For customers who attach more importance to cost, they can
stick to their original strategies to lower the price as much as possible.
Another type of companies is service oriented, such as Lowe’s and JingDong.
They usually have good management on the relationship with suppliers. Then, customers
are given more alternatives when buying their products considering different sizes,
functions, and colors. The customer satisfaction is improved in this way. Another common
characteristic of these companies are that they all mainly rely on self-built logistics service.
In such mode, companies have a much tighter control on the logistics, especially in the
distribution stage. The reliability, accuracy, safety and speed of delivery might be better
guaranteed. Furthermore, customers may directly interact with the logistics operators when
receiving goods. The training for these operators is very important to maintain the customer
service level.
Whereas the increase of service will incur a higher cost in most cases, higher production
cost will be generated when increasing the product categories. A huge investment is needed
when building its own delivery network, including the fixed cost to set up the DCs, the cost
to buy the fleets, the salaries for the delivery workers, and so on. It is recommended that
these companies seek for more cost-efficient ways to improve their performance.
For instance, they may apply big data analysis to have a more accurate demand forecasting.
A higher degree of automation in DC may save the labor cost further.
To a summary, companies are suggested to make a trade-off when balancing the cost
and the service given their own objectives. Generally, all companies are suggested to
manage a good relationship with the stakeholders along the supply chain and
collaboratively improve the network all the time. Information should be shared
appropriately to facilitate the inventory replenishment, save the cost, and make the entire
flow smoother. It is also suggested that the logistics mode should be selected carefully from
the self-build logistics, 3PL, logistics handled by suppliers, and the other forms so as to
maximize the total profit or minimize the total cost. Last but not least, more advance
technologies are encouraged, including the RFID for tracking, the automated facilities for
manufacturing, the cloud technology for data storage, and so on.

5. Opportunities and future perspective

5.1 Logistics model
The relationship between logistics performance and E-commerce customer loyalty is much
closer in E-commerce business than in any other industries (Ramanathan, 2010). E-commerce
orders are always small but the shipment of these orders is complex. And the logistics service
is directly provided to the final customer who always has high expectation. Many studies
show that customers consider the logistics performance as an important factor of E-commerce,
especially the last-mile distribution (Esper et al., 2003; Agatz et al., 2008). And company’s
logistics capacity has significant and positive effects on its performance in E-commerce
market ( Joong-Kun Cho et al., 2008). Future logistics model should focus on controlling the E-commerce
last-mile distribution service quality. Companies have self-support logistics team such as logistics in
JingDong, Lowe’s, and Amazon, which provide really good logistics service with higher supply chain
customer satisfaction.
However, considering the cost and revenue, operational flexibility, investment, core management
competency, and other factors, companies find that outsourcing is the most effective and
reasonable way to fulfill all customers’ logistics service requirement (Wilding and Juriado, 2277
2004). But outsourcing should not be a simple decision as “no or nothing” (Millen et al., 1997).
Joong-Kun Cho et al. (2008) showed that outsourcing has different effect on different
companies. For those with low logistics capacity, outsourcing has significant positive effect
on company’s performance especially on sales growth, but it has negative coefficient for
high logistics capacity companies. It is suggested that those companies should avoid
overlapping investment on the same logistics service part.
According to recent successful implementation cases and relative research works
(Rao and Young, 1994; Rabinovich et al., 1999; Bolumole, 2001; Knemeyer et al., 2003;
Wilding and Juriado, 2004; Highfield, 2014), the future development of E-commerce logistics
should classify logistics service first based on the specified company’s situation. Take IKEA
for example, products are divided into high-flow and low-flow categories based on the
circulation of products, while Home Depot designs different delivery channels for its
products based on the circulation and size of products. JingDong classifies its service
categories mainly based on regions, and Amazon categorizes customers into different
service groups.
With the globalization, the design of logistics model becomes much more complex.
Taking Home Depot for example, it is really hard to enter successfully into Chilean and
Chinese market (Bianchi, 2006). First, the consumer behavior is different in these countries
from North America. Customers in these countries have to work for such a long time so that
they do not have time to do DIY furniture. And women mainly decide what to buy for house
decoration in these countries. That makes DIY market is very small. Home Depot thus can
only achieve around 5 percent of the market share in Chile. Second, Home Depot still uses
the same supply management strategy in Chile and China, where the market is different.
Suppliers reject to coordinate with Home Depot when they find that the sales volume is
small while the coordinate terms are harsh. Third, Home Depot has strong local competitors
who know the local customers’ requirement well (Bianchi and Ostale, 2006). As a result,
Home Depot had to close all its retailer stores after entering Chilean and Chinese market
for around three years. Lessons from Home Depot in Chile and China are not only about the
market research, but also about that during different company development period,
different supply chain management strategy, and supported logistics model should
be applied. In the early stage, outsourcing transportation and warehouse renting can be
applied because it is the most cost-effective way and it is positive for sales performance
(Li and Ding, 2014).

5.2 Technologies
Future technologies for supporting E-commerce furniture LSCM include three future
perspectives: Internet of Things (IoT), Big Data Analytics, and Cloud Computing. These
technologies may be able to upgrade and transform the E-commerce logistics into a wider
implementation not only for giant corporations, but also for SMEs to get the benefits from
E-commerce era.
IoT is a smart network of physical objects, devices, vehicles, architectures, and other
items that are embedded with sensors so that these objects could communicate and
exchange data within an intelligent environment (Xu et al., 2014; Qiu et al., 2015;
Zhong, Huang, Lan, Dai, Xu and Zhang, 2015). As the E-commerce logistics involves large
IMDS number of items such as trucks, drivers, warehouse facilities and workers, etc., it is difficult
117,10 to control and manage such enormous items. The final customers always want to trace and
track the logistics once they placed an order on the E-commerce platform. IoT provides a
golden opportunity for the future E-commerce logistics to convert various items involved
into smart objects which are able to sense, interconnect, and react with each other once they
are carrying some sensors like RFID readers or tags (Zhong et al., 2013). The IoT-enabled
2278 smart environment will capture the real-time data generated among different mart objects
which are carrying out various operations and behaviors. Thus, great myriad of digital
devices and sensors could be used for creating the smart environment where smart phones,
RFID readers and tags, PDAs, smart Kanban systems, and so on could be adopted to enable
the vision of future intelligent E-commerce logistics.
After using vast number of digital devices in E-commerce logistics, huge number of data
will be created. The large number of data from E-commerce logistics may carry rich
knowledge which could be used for supporting advanced decision-makings for various
enterprises. Thus, Big Data Analytics is another future perspective to lift E-commerce
logistics. Big Data refers to the data sets with so huge volume or complexity that typical
data processing technologies or approaches cannot deal with in an efficient and effective
way (Ciobanu et al., 2014; Tan et al., 2015; Zhong, Huang, Lan, Dai, Xu and Zhang, 2015;
Zhong, Huang, Lan and Wang, 2015; Zhong, Xu, Chen and Huang, 2017). Considering the
large data sets from E-commerce logistics, several challenges may be address by using the
Big Data Analytics because the data from this domain have some characteristics such as
heterogeneous format, multi-dimensional attributes, real-time generation, and different
source providers (Zhong et al., 2014; Pang et al., 2015). Big Data Analytics is able to
overcome such challenges through decent models, algorithms and mechanisms in different
stages like storage, processing, pattern recognition, visualization, standardization,
and interpretation (Zhong, Lan, Xu, Dai and Huang, 2016). For example, if the large
number of E-commerce logistics data could be visualized, decision makers are able
to real-time track and trace the status of various smart objects. For any abnormities,
he/she can make adjustment or another decision as soon as possible. Additionally,
Big Data Analytics will excavate the trends of targeted objects in terms of current status
and future situations. Therefore, prediction model could be obtained for facilitating the
decision-makings in E-commerce logistics supply chain management such as inventory
prediction and control.
To process the large number of data with reliable approaches, Cloud Computing maybe
suitable since it is a kind of internet-based computing where resources, data, and information are
shared to computers and other devices on-demand. In such model, on-demand access to a shared
pool with configurable computational resources (Armbrust et al., 2010; Chaabouni et al., 2013;
Kehoe et al., 2017). It enables ubiquitous, convenient, on-demand, and flexible network access to
a shared pool with various resources like networks, servers, services, and so on (Morgan and
O’Donnell, 2017). Graham et al. (2013) highlighted the E-logistics by making full use of the
Cloud Computing technology and infrastructures. In the E-commerce logistics, the SCM needs a
large computation ability to work out optimal solutions or decisions, thus, the distributed
computing resources could be utilized to figure out the decisions locally and globally.
Services models like infrastructure as a service (IaaS), platform as a service (PaaS), and software
as a service (SaaS) could be associated with different layers of the E-commerce logistics. For the
smart objects, IaaS is able to provide physical layer services like locating, scaling, data
partitioning, etc. (ten Hompel et al., 2014). After that, the end-users in E-commerce logistics are
able to deploy their applications on a cloud infrastructure. For boosting the products or goods in
the E-commerce system/platform, PaaS could be adopted. A PaaS provider develops some
toolkits and standards for the payment and transactions. The trading behaviors or workflows
will be run over the platform where is equipped with various services designed and developed to
match application automatically so that the cloud users do not need to allocate resources E-commerce
manually (Subramanian et al., 2014; Wolf and Rahn, 2015). In the E-commerce logistics, large logistics in
number of users access to the application software and databases via SaaS model which is supply chain
usually termed as on-demand software. In the future logistics, E-commerce driven SCM may
focus on the customer satisfaction so that cloud service provider can install the application management
software in the cloud easily. In this way, the applications of software for E-commerce system,
logistics, and SCM could achieve a way of scalable, reconfigurable, extensible, and self-adaptive. 2279
The integrated logistics service is able to open and sustainable in the E-commerce era by
using various components encapsulated as services using the SaaS model (Cegielski et al., 2012;
Wu et al., 2013; Subramanian et al., 2015).

5.3 Implementation
5.3.1 Implementation of logistics model. Considering the advantages and disadvantages of
self-built and outsourcing, usually companies have to make a decision after trade-off.
The factors need to be considered include status of fund, sales volume, management level,
and informatization capability. It is possible to build enterprise’s own logistics systems only
when the company has abundant financial resources (Cheng, 2012). Otherwise, it may be
better to choose outsourcing. Large amount of capital is needed to build logistics systems,
including warehouses, DCs, fleets, and other necessary equipment. Moreover, it usually
takes a long time to recover the funds from profit. As a consequence that lot of capitals are
occupied, the other business of companies might be influenced negatively. Hence, a
company which prefers smaller amount of investment or instant effect may consider
outsourcing as the first choice. However, self-build logistics systems are relatively stable,
which is good for sustainable development. Therefore, the companies owning substantial
capital and hoping for steady development may try to build their own logistics companies
step by step (Giovanis and Tsoukatos, 2013).
The second determinant is the sales volume, as the flexibility of making use of logistics
sources varies between self-built system and outsourcing. Companies with self-built
logistics systems have to bear a relatively high cost because of low loading rate and low
utilization ratio of warehouses resulting from fluctuating demand. Only when companies
can flexibly match their distribution system to their sales volume in certain areas, they are
able to control the logistics costs within a reasonable range, whereas if the sales volume is
difficult to predict, companies may choose to cooperate with the third-party transportation
companies in order to spread the risks.
The level of management also matters when deciding the logistics pattern. It requires
for more staff and departments to handle the self-built logistics system. It is the
good management of employees, appropriate adjustment of business structure and
unity of enterprise culture that are vital for the smooth implementation of the logistics
system. If the company has the required management capability of high level, it may
consider the choice of building its own distribution system. Otherwise, it may be wiser to
choose outsourcing.
Another challenge of building companies’ own logistics system is the high demand for
information capacities. The company should be more advantageous to build its own
logistics system if it can develop a mature information system, which is required to handle
information about sales or logistics and complete connection of different segments,
whereas if the companies are lacking of IT talents or enough capital for developing the
information system, they can only focus on their core capacity by transmitting the task to
the third party.
5.3.2 Implementation of hi-tech equipment and information management system. Facing
the higher and higher trend of customers’ requisition for services and products, enterprises
IMDS especially E-commerce companies are required to implement appropriate hi-tech equipment
117,10 and information management system when they deal with their logistics.
Multi-layer shelves in three dimensions are accustomed to match the large quantity of
goods in daily operation. Especially, when the parcels are easily sorted and in regular shape,
the WMS can be very highly automated. In this manner, not only the labor cost could be
saved, but also efficiency could be increased significantly.
2280 There are now several popular information management systems. One of them is ERP
system that can help coordinate various departments of the enterprise, integrate
the information system of the whole company, and add new modules to satisfy
new requirements. ERP system is flexible, accurate, convenient, and interactive. Logistics
usually demands highly in dispose of order, contract, delivery and return of goods.
It should rely on data sharing in real time, integration of parcel flow, capital flow and
information flow, remote control, and various management strategies. ERP can
satisfy those requirements. One common type of informatization solution in logistics
nowadays is ERP.
Another information innovation is highly customized software applications which
can link the company into its partners’ systems. The information such as inventory levels
and product types can be shared and displayed together. It enables the company to
receive orders or manage the delivery better using their supply chain business models.
There are for sure other kinds of WMS or IMS. Companies having sound capital
foundation usually try to develop and update their systems to match the higher and
higher market needs.

6. Conclusions
This paper talks about the E-commerce logistics in supply chain management from a
practice perspective by taking furniture industry for example. Due to the fast development
and large influence of E-commerce, logistics has been greatly changed compared with
several decades ago. This paper highlights the logistics models and supporting techniques
which have improved the E-commerce logistics significantly. Worldwide implementations
such as North America, Europe, and Asia Pacific are reported. Typical E-commerce
companies are reviewed in this paper aiming to get the opportunities and future
perspectives which may be used for guiding practitioners and academia when
contemplating E-commerce LSCM in the near future. Lessons and insights from these
practices are highlighted so that some success factors are identified.
For the practice view of E-commerce logistics, the IT technology plays an essential role in
improving the efficiency and effectiveness of supply chain management. Future
technologies like IoT, Big Data Analytics, and Cloud Computing would be possibly
adopted to enhance the E-commerce logistics in terms of system level, operational level, and
decision-making level that may be real time and intelligent in the next decade.

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Corresponding author
Ray Y. Zhong can be contacted at: zhongzry@gmail.com

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