The Structure of The Logistics Process in Taiwan

The Structure of The Logistics Process in Taiwan

The new generation of logistics war has started in Taiwan. The demand for efficient logistics has become an all-time high. Traditional logistics companies cannot fully satisfy such high demands. E-commerce in Taiwan such as PChome and momo have built their own warehousing and truck fleets to race against time. Moreover, the foodpanda and UberEats in Taiwan have joined the war for the food delivery market, as they know the demand has been unsatisfied due to the development of information technology. PChome and momo highly relied on the cooperation of logistics partners in the past, but now they have started to build their own logistics processing centers. The logistics battle has been transferred from the labor-intensive and enclosing traditional thinking to the competition for talents and a new type of retail. Regardless of evolution, what remains the same is that the logistics industry will always race against time.

Here are the steps for suppliers to cooperate with PChome24h:

1. Suppliers sign agreements with PChome and pay for the marketing and fulfillment services. 
2. Suppliers send their products to PChome's warehouses nearby.
3. PChome checks and confirms the received amounts of products with suppliers.
4. Products have now listed on PChome24h.com and available for purchases.
5. Consumers purchase some products and pay for them.
6. PChome confirms with banks and third parties for this payment.
7. Payment confirmed and orders pass to its fulfillment centers
8. PChome fulfillment centers start to pick and move these specific items into boxes.
9. Products are now in the boxes and get in the trucks stand by them. (As I mentioned above, those trucks are from third-party logistics firms and some of them are from firms owned by PChome.)
10. Products are on the trucks and heading to consumers.
11. Consumers get what they ordered earlier.

However, not everyone is feeling good at what they actually get. Therefore, some reverse logistics are unavoidable. According to the return policy of PChome, here are the steps for returning a product.

1. Consumers request returns on the PChome24h.com returning page.
2. PChome receives the message and notifies the logistics firms.
3. Logistics firms carry the returning products from consumers to suppliers.
4. Suppliers confirm the completeness of the products and send the messages to PChome. If the products cannot be returned because of some serious damage, the suppliers will report and reject the return.
5. After receiving the yes or no messages from suppliers, PChome notifies the consumers of the results.
6. PChome does the return of payments.

An additional suggestion for reducing the returns is that PChome should manage its website and teaches their suppliers how to provide more information of their products to reduce their returning rates and increase their profits.

Outsourcing and Offshoring, Just-In-Time and Vendor-Managed Inventories, Marketing

Introduction

Today, the idea behind the term value chain and supply chain is that the supply chain partners can do more for you rather than just perform basic functions. For instance, in Taiwan, PChome24h.com cooperates with the great partner T-Cat to do the transportations for it, in order to achieve the 24h-delivery. The customers not only enjoy the products they buy, but also enjoy the fast delivery, and reduce their waiting time. Besides, each partner should help you create more value for customers.

Outsourcing and Offshoring

Both offshoring and outsourcing reduce costs but in very different ways. Companies like Amazon or Walmart negotiate contracts with third parties to perform specific functions such as transportations and POS(Point of Sale) systems by outsourcing to other companies. By doing that, they can reduce the costs since they don't have to put too much money on them like open a new company to do this business. Always remember that it is vital to find a partner you can trust and specializes in the task at hand. Offshoring, on the other hand, sends internal jobs to be performed in another country. An example of offshoring is for a United States based company like Tesla to produce their electric cars in Asia and Europe to locally supply its products.

How Can Just-In-Time and Vendor-Managed Inventories Add Value to Products for Customers?

Most companies desire to lower their cost on their inventories. However, to lower the amount of inventory and still maintain the stock they need to satisfy their customers is a hard choice. An example of a company that uses just-in-time inventory systems is Toyota. In Toyota, "Just-in-Time" means making only what and when it is needed. It efficiently eliminates waste and improved productivity. In addition, companies with just-in-time inventory systems keep very little inventory on hand so they can reduce the cost of inventory.

Some companies do this approach by contract with their suppliers to ship and manage their inventory as they need it. This is vendor-managed inventory. Amazon's fulfillment centers manage the inventories for its business partners who sell products on Amazon.com. Apple also utilizes a vendor-managed system and carries very few component parts. Its chips suppliers carry them. This helps keep Apple’s in-inventory levels low. And by keeping track of its customers and what they are ordering, Apple has a better understanding of what they might order in the future. So Apple can order the right chips at the right time within the right amounts. Apple also purchases components and materials from various suppliers, then gets them shipped to the assembling plant in China. From there, products are shipped directly to consumers who bought from Apple's Online Store.

What Place Does Reverse Logistics Have in A Company’s Supply Chain? 

Reverse logistics stands for all operations related to the reuse of products and materials. More precisely, reverse logistics is the process of moving goods from their final destination for proper disposal. When a manufacturer’s product moves through the supply chain network and reaches the distributor or customer, any process or management after the sale of the product involves reverse logistics. The product would travel in reverse through the supply chain network to retain any use from the defective product. 

Reverse logistics presents one of the biggest operational challenges in E-Commerce freight logistics due to the cost of processing returns. Effective reverse logistics should have direct benefits such as improved customer satisfaction, decreased resource, reductions in storage, and distribution costs. When a return occurs, the returned product will be collected and sent to the distribution center. Meanwhile, the relevant information will be transferred to the return processing center.

The traditional logistics when products are required, they will be shipped to the distribution center and then shipped to the retail stores. It heading only from sellers to buyers. However, reverse logistics is very different. Shippers in response to actions by consumers, even though they do not initiate reverse logistics activity.

Reference

Just-in-time - philosophy of complete elimination of waste. (n.d.). Retrieved March 06, 2021, from http://www.toyota.com.cn/company/vision_philosophy/toyota_production_system/just-in-time.html

Lu, C. (n.d.). Apple supply chain - the best supply chain in the world. Retrieved March 06, 2021, from https://www.tradegecko.com/blog/supply-chain-management/apple-the-best-supply-chain-in-the-world