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E-Logistics Technologies for Small and Medium-Sized Businesses

Abstract

Transportation and logistics processes are an integral part of companies’ operations when dealing with customers and other businesses. In the conditions of the modern world, the role of e-commerce is increasing, which makes its adjustments to the logistics management of companies. In particular, this factor is of increased importance for small and medium-sized businesses (SMEs), which need to implement effective e-logistics tools in a limited resource environment. E-logistics are now seen as necessary to maintain the competitive advantage of companies. This paper examines the role of e-logistics tools in the logistics management of modern companies, and also examines the factors that influence the choice of specific technologies for use by SMEs.

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Introduction

The modern world is characterized by a high level of digitalization and globalization. Logistic processes also need transformation and adoption of innovative solutions. This assumption is motivated by the fact that the global market is paying increasing attention to e-commerce, which makes the physical aspects of transportation, not the only significant factors. Using the appropriate e-logistics tools allows companies to maintain a competitive edge by streamlining their logistics processes. However, for SMEs, this process can be challenging due to limited resources.

At the same time, large companies have sufficient resources to invest in hardware development and implementation of innovative tools. SMEs, in turn, need to carefully assess the risks that are associated with the implementation of e-logistics technologies. Thus, SMEs need to focus on communication and the selective use of e-logistics tools, which would provide outsourcing of transport operations to improve logistics efficiency.

Literature Review

Globalization processes force researchers to pay increased attention to more efficient use of resources in logistics management. In particular, there is an increasing focus on harnessing the digital opportunities that modern technologies offer. Additionally, the development of global e-commerce has a significant impact on the transformation of global transportation systems and approaches to them. Currently, the competitive advantage of companies is influenced not only by the quality of goods and services but also by logistics management and delivery to the customer. Erceg and Sekuloska (2019) argue that the implementation of modern logistics methods and systems has a significant positive impact on the company’s competitive advantage in the market. In particular, the researchers argue that working with today’s customers requires organizations to adapt to new conditions.

Supply chain management (SCM) is currently an integral part of the company’s success in the market. However, global communication methods such as the Internet allow customers to access a much broader range of organizations and products, which increases congruence. For e-commerce, companies need to integrate digital technologies to optimize logistics resources, and transport flows in the physical world.

Thus, Erceg and Sekuloska (2019) present the concept of e-SCM, which is an “emerging business strategy which incorporates e-commerce into the physical supply chain to speed up information exchange, reduce transaction costs, streamline the manufacturing process and better satisfy customers’ needs” (p. 158). In other words, the researchers conclude that modern companies need synergies between Internet technologies and the business process to conduct operations. This article also presents a list of existing and emerging digital tools for e-SCM, discussing their benefits and interaction.

The principles of e-logistics as a basis for the implementation of e-SCM are now gaining wide popularity. Georgise et al. (2020) conducted a study of the effectiveness of the implementation of these tools and the effect they have on the logistics performance of companies. The main problem of traditional SCM is the large amount of time it takes to conduct operations, which negatively affects the quality of service. The research by Georgise et al. (2020) identifies that the implementation of e-logistics principles can reduce transportation time and costs by up to 90%, reduce the risk of errors by 43%, and accelerate delivery by more than 50% (p. 31).

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The article also examines the framework necessary for the implementation of new logistics technologies, the requirements for implementation and also provides an overview of the process itself. Additionally, the researchers note what software is necessary for the correct and efficient operation of e-logistics and what benefits they can bring to customers.

Big-data technologies occupy a special place in modern e-commerce and in any business operations. Govindan et al. (2018) offer an overview of studies that focus on the effectiveness of the implementation of various big data tools within e-logistics. This article argues that modern companies must implement a wide range of different approaches for effective SCM. In particular, big data technologies allow organizations not only to motivate supply chain risks, reduce costs but also increase opportunities for innovation. Govindan et al. (2018) conclude that “manufacturers, logistics, suppliers, and retailers should develop a holistic approach to add value to their customers and services” (p. 343). This statement underlines the fact that modern e-logistics is based on the interaction of many different technologies and requires attention from the company to each of them. These processes integrate both analytics and the management of operations within the supply chain to assess and meet the needs of customers.

To create a holistic system, modern companies need to focus on a multitude of tools that are based on computer technology (CT). Xing (2021) explores how CTs have transformed modern logistics processes. In particular, the article compares the use of barcoders and RFID technology to optimize logistics processes at all levels. RFID technology refers to the use of radio signals to retrieve product information, and it “eliminates the manual registration means, which speeds up the progress of logistics” (p. 4). Compared to traditional barcodes, this tool offers a large number of advantages, significantly increasing the speed and accuracy of work.

Xing (2021), on the example of this comparison, shows that the implementation of CT and suitable software is the key foundation for the implementation of e-logistics principles. Thus, organizations need to pay attention not only to the use of new technologies but also to technological transformation. However, this process can be difficult for small and medium-sized enterprises, whose resources are significantly limited.

In this case, the researchers are interested in how relevant investments in e-logistics are for companies in the modern market and what impact they have on the performance of the organization. Ullah et al. (2021) performed an “examination of an entire supply chain from both upstream and downstream perspectives” (p. 1791). Thus, the researchers were able to identify the e-logistics tools as well as their relative effectiveness within the company’s operations.

The results show that the success of organizations in today’s market is highly dependent on the ability to adapt to new conditions. In this case, companies that implement e-logistics and e-transportation tools are able not only to optimize their operations but also to quickly train on their trading experience. (Ullah et al., 2021). Thus, e-logistics help companies to increase their competitive advantage not only through more efficient resource allocation but also through increased adaptability to new conditions, which makes these tools extremely important in the long term development. However, the study was conducted only for large companies that have broad opportunities for investment in new technologies.

E-Logistics Technologies for SMEs

The introduction of e-logistics technologies is associated with a high level of investment for the transformation of the company’s SCM principles. However, as identified by Ullah et al. (2021), the use of relevant tools can significantly increase the performance of organizations. At the same time, in relation to the subject under consideration, the issue of the effectiveness of certain technologies within the framework of SMEs, which, in comparison with large companies, have more limited resources for development, remains relevant. Dallasega et al. (2019) note that SMEs can benefit from e-logistics only “by following customized implementation strategies, approaches, concepts, and technological solutions” (p. 851). Thus, SMEs need to be more careful in selecting individual tools that could improve the efficiency of their logical processes than larger organizations.

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In connection with this assumption, it is necessary to understand which factors have the greatest influence on the choice of e-logistics principles and which aspects should be taken into account. Mabrouk et al. (2020) emphasize that for SMEs, the most important factors in logistics efficiency are “associated with innovation and communication tools” (p. 569). At the same time, metrics such as relationships with customers and suppliers, as well as quality and marketing, are of lesser importance but highly dependent on other metrics. In this case, the most relevant tools for SMEs may be Internet communication and big-data tools for analyzing customer expectations. At the same time, systems aimed at optimizing the direct transportation of goods may be of secondary importance for such organizations.

There are various tools for developing an e-logistics company, but some of them may be more suitable for SMEs than others. Glass et al. (2018) emphasizes that an inappropriate business strategy or insufficient compatibility of software and standards can become a major obstacle to the effective development of an organization’s e-logistics principles. When adopting new tools, it is necessary for SMEs not only to assess the current needs and available resources but also to monitor the effectiveness of the interaction of the technologies used.

Consideration of specific tools is necessary to assess which ones can be successfully used by SMEs. The use of cloud technologies for smaller companies presents special advantages since it can significantly reduce the cost of data storage (Miscevic et al., 2018). Additionally, SMEs can benefit from the use of mobile logistics, which can significantly increase the level of transparency at all stages of transportation, which is important when working with clients and other businesses (Miscevic et al., 2018).

The adoption of digital twins, which are virtual copies of a company’s physical assets, is now also widely used. This technology can improve the logistics performance efficiency of the organization by 10% (Miscevic et al., 2018, p. 1355). Digital twins not only help to avoid the influence of changes in physical conditions but can also be used to simulate and evaluate possible events.

The use of digital twins is associated with a fairly high investment not only in software but also in hardware, which can be difficult for a small business. Digital twins are currently actively developing as an outsource product, which gives access to them not only to large companies but also to SMEs (Digital twin technology, 2020). Nevertheless, these digital twins are more effective when implemented in manufacturing enterprises since they allow minimizing possible risks associated with the production of a certain product (Miscevic et al., 2018). Thus, this tool can be useful for the logistics management of small businesses, but it requires a careful assessment of the implementation purposes.

SMEs, due to limited resources, need to focus on using innovative technologies that are offered by larger companies. Industry 4.0 offers a comprehensive system for managing all stages of transportation using automation, which is a major investment for smaller businesses (Miscevic et al., 2018). Thus, it makes sense for SMEs to use isolated tools while larger processes can be outsourced. Nowadays, there are many startups that offer logistics solutions or methods for transporting goods. For SMEs, effective communication with shipping companies is also an important aspect, which will provide an expansion of the scope of focus in the e-commerce field (Miscevic et al., 2018).

Additionally, the use of blockchain technologies, artificial intelligence, and augmented reality are also capital-spending tools. These technologies can be adopted by large companies, while smaller ones can use them as outsourced. Thus, for the effective implementation of logistics innovations, SMEs require the development of effective communication not only with customers but also with logistics service providers.

Conclusion

E-logistics is a necessity for all modern companies that strive to satisfy customers’ demands and provide quality services and products. However, innovative tools require significant investment, which, given limited resources, can hinder successful transformation. This issue is especially relevant for SMEs who cannot afford to adopt expensive technologies to create a more efficient logistics system. In this regard, smaller companies should focus on choosing e-logistics tools that provide opportunities for improved communication. In particular, SMEs need to use cloud technologies, various logistics software, as well as outsourced transportation services to benefit from the new conditions.

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References

Dallasega, P., Woschank, M., Ramingwong, S., Tippayawong, K. Y., & Chonsawat, N. (2019). Field study to identify requirements for smart logistics of European, US and Asian SMEs [Paper presentation]. Proceedings of the International Conference on Industrial Engineering and Operations Management Bangkok, Thailand, 844-8565.

Digital twin technology now available to SMEs. (2020). Interreg North-west Europe Machining 4.0. Web.

Erceg, A., & Sekuloska, J. D. (2019). E-logistics and e-SCM: How to increase competitiveness. Scientific Journal of Logistics, 15(1), 155-169. Web.

Georgise, F. B., Heramo, A. H., & Bekele, H. (2020). Improving automotive service through e-logistics: A case of Moenco Hawassa, Ethiopia. International Journal of Economics and Management Systems, 5, 21-40.

Glass, R., Meissner, A., Gebauer, C., Stürmer, S., & Metternich, J. (2018). Identifying the barriers to Industrie 4.0. Procedia CIRP, 72, 985-988. Web.

Govindan, K., Cheng, T. C. E., Mishra, N., & Shukla, N. (2018). Big data analytics and application for logistics and supply chain management. Transportation Research Part E: Logistics and Transportation Review, 114, 343-349. Web.

Mabrouk, N. B., Omri, A., & Jarraya, B. (2020). Factors influencing the performance of supply chain management in Saudi SMEs. Uncertain Supply Chain Management, 8, 569-578. Web.

Miscevic, G., Tijan, D., Žgaljić, S., & Jardan, M. (2018). Emerging trends in e-logistics [Paper presentation]. 2018 41st International Convention on Information and Communication Technology, Electronics and Microelectronics (MIPRO), Opatija, Croatia, 1353-1358. Web.

Ullah, K., Sharif, I., Junaid, M., Khattak, A. A., Malik, F., Ajmal, M. M., & Naseer, R. (2021). The impact of e-logistics on firm performance in the context of supply chain. Elementary Education Online, 20(3), 1791-1795. Web.

Xing, X. (2021). Application of computer technology in supply chain management of electronic logistics. Journal of Physics: Conference Series, 1915, 1-6. Web.

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