Utilizing E-business at Ocean King Transportation Co., Ltd.

Literature Review

E-Business in Global Supply Chain Management

The case study of Danish Furniture On-line and the Aksel Kjersgaard cabinetmaker factory presented a good example of how small firms could use the Internet for customer service and marketing purposes. It showed that the Internet could be an important medium of furniture presentation, as well as for initiating contacts with customers and suppliers. Moreover, the website offered opportunities for increasing the number of end customers and intermediate vendors, selecting more and better suppliers. as well as improving customer service and reducing costs related to all these functions.

While global supply chain (GSC) sourcing is now common for large, multinational corporations, the need to keep shortening the supply chain was noted by Tyan, Wang, and Du. This required development of ever more efficient and effective GSC management. Still, the actual transportation aspect of the GSC was the weakest link in such chains, with international transportation typically requiring up to two weeks, not counting the lead time for manufacturing. To shorten this trend, Tyan et al. proposed a new collaborative transportation management (CTM) solution as a revised business model for logistics. This new model included the actual carrier as a strategic partner, with the goal of reducing transit times and costs to the retailer, and increasing the net asset utilization for the carriers, thus making the entire system more efficient. The CTM solution required significant and coordinated e-business applications among manufacturer, end customer, and third-party logistics provider to maximize the efficiency of transportation throughout the system.

Penaloza, Brooks, and Marche studied the impact of e-business on container shipping companies through four case studies involving deep-sea container lines (one each, small, medium, and large) and one medium sized feeder line. A shift in priorities had taken place in such companies in the decade between 1992. In this study, the priority for e- business in 1992 was focused on improving management efficiency rather than any other application. In contrast, by 2002, the focus for e- business for these container lines was on customer-focused applications . Despite the consistency of that theme across the four companies studied, there were differences among the studied companies. For example, the large deep-sea line focused on improving cost-efficiency, reducing costs, and also in developing business ideas that were in compliance with various maritime security issues that arose after September 11, 2001. Another interesting aspect of this large company is that the company was in the process of restructuring its organizational structure along electronic regions rather than physical regions, which could make the electronic environment perhaps more important than the physical geography.

In the case of the medium deep-sea line, e-business applications were used to overcome a bad market and move from being in serious financial trouble in the early 1990s to developing major management and organizational changes that resulted in improved market share in its niche market. This particular company did an exceptional job of implementing a user-friendly, highly functional website by developing its own proprietary e-business applications. Although interconnected, those applications were only gradually becoming Internet-compatible rather than transmitting along a proprietary network.

The small deep-sea line, had a dual market thrust, in both bulk shipping and in container shipping. While primarily a maritime shipper, just before the turn of the century it expanded into providing land-shipping support as well, at the request of its customers. Although a fairly early adopter of electronic data interchange (EDI) systems, this company was only slowly adapting to Internet-based applications.

Finally, Penaloza et al. considered the case of a feeder shipping company with more than a quarter-century of experience. It specialized in international short-sea business with a competitive strategy of providing both price and service advantages to its customers. The key to this company's e-commerce strategy was to give its customers tools that were highly reliable and provided information about the cargo status. Based on these four case-studies, e-business in ocean shipping firms was far more likely to be adopted by larger carriers than small ones. This perhaps generated ongoing disadvantages to those smaller firms as they were shut-out of the integration efforts such as the previously mentioned CTM solutions. As e-business grows and became more mandatory for global competitiveness, smaller companies without e-business implementations were placed at greater disadvantages than ever before.