Internet technology ensures a very fast flow of information and unlimited reach. As a result, the Internet is widely used not only for purposes such as advertising, but also for the flow of material goods, supporting the logistics processes of enterprises.
Under the concept of logistics, according to the definition developed by the Council of Logistics Management, we understand the process of planning, implementing, and controlling the efficient flow and storage of raw materials, semi-finished products, and finished goods, under conditions that allow for effective cost management and related information, from the point of origin to the point of consumption, in accordance with customer requirements. In logistics, the Internet is used primarily for Electronic Data Interchange (EDI), but also in procurement logistics for order processing or purchases on online exchanges, in transport logistics, e.g., for shipment tracking systems, on transport service exchanges, and in distribution logistics for the sale of goods.
EDI, as is commonly known, is the electronic exchange of commercial or administrative data between different computer systems, using an agreed-upon standard for formatting this data. In the case of using EDI, instead of paper documents sent by mail (e.g., order, order confirmation, invoice), equivalents of these documents are transmitted in the form of computer files. The files are sent electronically to the recipient’s computer system and then processed by an application that interprets the received data structures. The use of electronic data interchange reduces costs, eliminates errors during data entry, and, which is not insignificant today, eliminates language barriers. It also allows for the rapid transmission and processing of data, thus streamlining organization and information flow, reducing inventory, and improving the company’s competitiveness.
Due to the open nature of the Internet, transmitted documents are exposed to many dangers. In Internet communication solutions for EDI needs, several types of EDI are used: Mail-based EDI – using electronic mail, WEB-EDI – using websites, the http protocol, and the SSL data encryption protocol, and XML-EDI using the new XML document description language.
Currently, modern techniques are becoming available not only to large enterprises but also to small and medium-sized companies. In enterprises that have not used EDI until now, the processing scheme using XML syntax is simplified because it is devoid of EDI message translation. The costs of implementing such a system are much lower than traditional EDI. This is due to the ease of access to the Internet and low software costs.
In the case of order processing, a significant component of delivery time is the time required to process the order. With the help of electronic mail, it is possible to send and receive orders faster than, for example, by a letter sent by traditional method. There is also the possibility, unlike a fax, of sending various types of information in the form of computer files (spreadsheets, text editors, graphic files, databases), which can be processed. Material delivered in this way is of very good quality, and the use of electronic mail itself contributes to lowering the company’s operating costs. Unfortunately, the use of electronic mail entails certain risks, such as low signature reliability or the need to print orders.
Very often in order logistics, a web browser is used as a tool enabling the placement of orders in virtual stores. Thanks to the use of such a technique, there is a significant simplification and automation of the order processing process, and the order processing time is very short. Online exchanges, on the other hand, are a platform for establishing commercial contacts between enterprises, and thus in the B2B (Business-to-Business) segment.
Exchanges can be global or local in nature. Currently, large companies are most interested in virtual markets because they can significantly reduce the costs of procuring materials for production. Thanks to the ability to negotiate on the exchange with thousands of suppliers offering their goods, low prices can be obtained in a relatively short time. It can be assumed that exchanges on the Internet will have a profound impact on the production process and the distribution system. Online exchanges allow for lowering the costs of finding new suppliers and customers and accelerate the flow of information. They favor effective ways of conducting business activity. Exchanges on the Internet are a kind of “auctions” of requests for quotations, orders for goods, and shared use of logistics. They favor effective ways of conducting business activity. Retailers, wholesale distributors, and suppliers participating in online exchanges save on transaction costs. They can keep smaller inventories, optimize the degree of resource utilization, and eliminate some losses from the value chain.
In the case of transport logistics, the Internet offers transport service exchanges and shipment tracking systems. Virtual logistics exchanges are websites where supply and demand offers for logistics services, such as free transport capacity, are located. Using this type of exchange brings many benefits to companies, consisting of reducing empty runs and the resulting cost limitations. Thanks to the exchanges, companies can optimize the transport route and increase the number of orders. In Europe, one of the most dynamically operating online transport service exchanges is “DAT Services”. There are also several transport exchanges operating in Poland.
The shipment tracking system is a complementary service to the transport of goods used by modern logistics companies. Its goal is to increase the level of customer service through the use of new technology (GPS system, electronic mail, websites, and WAP). The functioning of the shipment tracking system consists of assigning an individual number to each load. The number can be read using a scanner connected to a GSM mobile phone and sent to the control unit. After loading the goods onto the means of transport, the transport route is tracked using the GPS system. After the delivery of the goods, this fact is recorded using a scanner. The sender and recipient of the shipment, using a web browser, electronic mail, or a mobile phone, can observe what is happening with the goods and, on this basis, estimate the delivery time. The shipment number is always known to the sender, while the recipient, wanting to know it, must contact the sender.
Distribution logistics includes the sale of tangible goods and the sale of digital products. The Internet constitutes a distribution channel for goods sold in an online system, through online stores. Furthermore, the Internet enables the transmission of all products that can be saved in digital form. This solution significantly shortens the distribution channel, thanks to which faster access to consumers and unlimited sales reach are achieved. Through this distribution channel, it is possible to send, among other things, software, newspapers, books, music, etc.
The Internet is an effective carrier of information and an excellent distribution channel. It is also a source of new opportunities for logistics, as it significantly reduces costs, shortens operation time, and limits the number of intermediaries. Important for logistics processes is the possibility of using the Network for data exchange, which consequently leads to closer cooperation between companies at every level of the supply chain.