How does the internet affect the organization of the firm in the transportation industry - including a brief case study how e-markets may enter SCM

Essay by cvkostrewaUniversity, Bachelor'sC+, June 2004

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Apple with its new iPod and Samsung with its new smartphones rely heavily on third-party logistics companies and their ability to get all the components just-in-time together ready for production and then the products to the markets. Before 9/11 supply chain management was all about "enhance productivity, eliminate waste, remove supply chain duplication, and drive for cost improvement", says William L. Michels, CEO of consulting firm ADR North America, Ann Arbor, Mich. Since 9/11 managers are more aware of the weak links within their supply chain networks and their vulnerability to risks like political instability or (terror) strikes.

What does the world expect? Ask Google. The term "supply chain management" generates over 5 mio results. The term "supply chain efficiency" 0.8 mio entries. And the term "supply chain risk" 1.5 mio entries. However unacademic this Google-scenario may be it does nevertheless reflect the big challenges facing companies that jump on the bandwaggon of global outsourcing: the supply chain risk issue seems to outweigh the productivity issue today.

David Stauffer (2003) concludes in his article "Supply Chain Risk: Deal With It" that there is a 'inverse relationship between risk and efficiency that can be balanced by broadening the degree of cooperation'.

This research project will describe and discuss how the internet affects and changes the organization of the firm in the transportation industry to capture cost improvements and shows in a brief case study how e-markets may enter the supply chain through the backdoor by means of facilitating a greater degree of collaboration forming part of a more balanced risk management.



According to the Institute of Logistics and Transportation ( "Logistics is the time related positioning of resource, or the strategic management of the total supply chain. The...