Supply chain management has been defined as the integration of key business processes, from raw-material suppliers through end users, that provide products, services, and information that add value for customers and other stakeholders (Lambert 1996).
Whereas supply chain management is relatively straightforward to define, e-logistics inspires varying definitions. E-logistics can be defined to be the mechanism of automating logistics processes and providing an integrated, end-to-end fulfillment and supply chain management services to the players of logistics processes. Those logistics processes that are automated by e-logistics provide supply chain visibility and can be part of existing e-Commerce or Workflow systems in an enterprise (Zhang 2008).
On the other hand, in a commercial manifestation, UPS presents its e-Logistics service as the hosting of a virtual logistics department for other companies that then present this capability as their own, but leave UPS to run and manage it (Levy 2008). These viewpoints can be considered as two halves making a whole in the light of the case-study that we have selected: UPS, the company under consideration applies e-logistics in Zhang's sense to its own internal operation and offers e-logistics as in Levy's description to its business customers.
With regard to these definitions, e-logistics is a part of supply chain management in general, but not an obligatory part. Supply chain management may or may not include such e-enablement. However in this paper our goal is to investigate the situation when supply chain management does use Internet either wholly or partially and in particular what advantages or disadvantages are conferred by e-logistics.
If the supply chain business process relating to e-logistics is most naturally that of order fulfillment, other processes that complete the picture are customer relationship management, customer service management and demand management. These processes involve all of the major departments of a typical company which are those of quality, logistics, marketing and sales, production, R&D and finance (National Research Council 2000).
A common theme in works on supply chain management is the competitive advantage to be gained from a fully integrated supply chain. Integrating into a single supply chain is hailed as the deciding factor for companies that will now succeed or fail (Handfield & Nicolas 1999). In the continuing battle for many companies to provides customer service that is cheaper, faster and better, there is a growing understanding of the need to form supply chain alliances with solid partners above and below in the chain, as few companies have the resources to do it all themselves. It is a natural step to then link the increase in global competitiveness to an increase of a company's market share and from there to arrive at a conclusion of increased shareholder value (Coyle 2003).
The requirement for rapid and sustainable development within supply chains then becomes one of the major preoccupations of businesses. Reaping the benefits