UNIVERSITY OF NATIONAL AND WORLD ECONOMY, Bulgaria
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Erasmus+

Author: Nikolay Dragomirov, Ph.D

Е-commerce platforms – logistics activities management

Methodological description of an Innovative class or educational game

(A standardized template for instructions to teaching staff)

 

Overview

The game demonstrates the capabilities of modern e-commerce platforms for management and automating routine tasks in logistics – procurement management, inventory management, and deliveries.

The game is based on using platforms that require self-hosting and installation (domain name that is redirected to a hosting account where the software solution is physically located). There are plenty of software products based on this principle, and for this case, an open-source platform could be used because of their advantages, especially for education purposes. The game is based on a WordPress platform that is upgraded with a WooCommerce plugin and other related (WooCommerce for 2020 is considered one of the leading e-commerce solutions, powering about 30% of the websites around the world). One of the main benefits of this solution is the possibility to upgrade with additional plugins related to management of the logistics processes within the organization and along the supply chain.

The purpose of the game is achieved by demonstrating how e-shops function and how orders are processed from the logistics pint of view. Special attention is paid to the possibilities for expanding the functional capabilities of the platform in order to increase the efficiency of logistics processes.

Objectives

The game aims to demonstrate the specifics of how of e-commerce platforms function and the connection with the logistics processes in the completion of orders, as well as the opportunities for development of the platforms according to the specific needs of the organization.

Group Size

No special requirement for the group size.

Time requirements

1 – 1.5 hours that can be reduced or extended.

Set Up

For the game to take place, it’s necessary to first introduce the players to the nature of e-commerce and the importance of platforms that connect the buyer and the seller in the digital space. Then, we can go further with the management of real processes, mainly the logistics of material flows. E-commerce platforms are information products that provide the sellers with solutions that let them offer their products and services in the digital space, and if the buyer has expressed interest, to facilitate the selling process by closing the sale and finishing the transaction. In practice, there are hundreds of solutions to do that, and it is impossible to cover the variety of platforms. In general, they can be classified based on several criteria, mainly by the functionality of the platform and the ownership of the supporting infrastructure. One popular solution provides sellers with their own domain name that is redirected to a hosting account where the software solution is physically located. There are plenty of software products based on this principle. The open-source blogging platforms are particularly important due to their numerous advantages. One of them is WordPress that can be used to create fully functional e-commerce platforms by upgrading with additional cart plugins to add functionalities for transaction processing, for example with WooCommerce. For this solution, for example, there are many active plugins on the market, and some of them have thousands of real installations. With these upgrade options, every e-commerce platform could be transformed into a fully functional platform focusing on customer needs.

Necessary set up:

  1. Clear WordPress installation – any type of hosting is possible.
  2. WooCommerce plugin installed and activated – the e-commerce platform needs to be set up only for the basic functionalities. Design layout and any other customizations could be done for the specific needs of the class. The recommended method is to use a simple design layout for a simple product group and no visibility of the systems outside.

Optional plugins:

  1. Installation of inventory management plugin. For example, ATUM Inventory Management for WooCommerce or other.
  2. Plugin for picking list generation – WooCommerce PDF Invoices & Packing Slips or other.
  3. Demo integration plugin with a local logistics service provider – depends on the practices in the country.
  4. Plugin/s for adding – EAN codes, ISBN, supplier’s info, etc. in the product’s master data.

Procedure

Introduction part

At the beginning, it’s necessary to clarify for the audience the role of e-commerce platforms, more specifically:

  1. Nature of e-commerce platforms.
  2. Types of widespread solutions.
  3. Architecture of e-commerce platforms – front/back panel.
  4. Categories and products relation explained. Products attached to one or many categories.
  5. Product’s master data:
    • Product’s description – short/long.
    • Product’s media.
    • Simple products – all submenus explained

Figure 1

  1. Role of integration with logistics service providers (optional). The interaction between the store and the courier organization can be done in different ways, the main ones being: performing calculations for the price of the service; generating a bill of lading and a courier request; subsequent inquiries about the current state of delivery.

Figure 2

The first area of ​​interaction is related to determining the price of delivery. With this method of organizing the process, the trader determines the selling price they’re looking to get, and very often, the cost of delivery is not considered important. All other costs: for delivery, payment processing, etc., remain at the expense of the buyer. In many cases, however, if the customer decides that they want to be informed about the cost of delivery before the transaction, it is necessary to make an inquiry to the courier organization and, based on the characteristics of the product, to perform the necessary calculation. In this case, the product’s master data (e.g., dimensions, weight, value) and the delivery address are factored in, with the delivery cost calculated on their basis.

Another important area of interaction is the preparation of a bill of lading. In this case, the e-commerce platform can submit the necessary data directly to the information system of the courier company in order to prepare the necessary documentation and even to print the required documents. After this step, what’s left is the physical delivery of the shipment to a courier (by requesting a courier or taking the shipment to an office of the courier organization).

Once the shipment is entered into the courier organization’s system through a unique identification number, for example that of the bill of lading, the shipment can be tracked.

Demonstration part 1 – Product entering

  1. Creating a new main directory for a selected product group. Simple product type is recommended – for example, stationery, watches, jewelry, fast-moving consumer goods, etc. It’s not recommended to use products that have variations, for example, clothes with different sizes and colors.

Figure 3

  1. Creating a new product and definition:
    • Product name and short description.
    • Simple product
    • General -> define regular sales price.
    • Inventory -> define SKU.
    • Inventory -> Enable stock management at product level – Yes. Define Stock quantity – 10.
    • Shipping

Figure 4

  1. Assign product to the already created category.
  2. Upload product image/gallery.

 

Action part 1

  1. Every participant has to complete the steps from Demonstration part 1. They are at liberty to select what product to enter as long as it fits the predefined category type. In the end, each participant will have one product entered.
  2. It is necessary to create an organization for the purchase of products – each participant should act as a visitor to the site and buy a product by finalizing the order. It is necessary to distribute the participants so that a purchase for each of the products can be created.

 

Demonstration part 2 – Order processing

After the purchases have been completed, it is necessary to illustrate the process of order processing. This step has a number of variables, depending on the installation and configuration of the extension for integration with the courier organization. It is advisable to emphasize the high degree of automation and the reduction of human labor.

After the purchases have been completed, an analysis of stocks should be made and a discussion on possible actions towards replenishing stocks should be held. At this stage, depending on the installed extensions, it is possible to extend the game in the direction of inventory management and relationships with suppliers.

Action part 2

Every participant has to complete the steps from Demonstration part 2.

Directions

The system utilized in this case is basic and covers main processes in e-commerce. Depending on the possibilities and the specific situation, it is possible to extend the game in many directions. It is advisable to monitor the execution of each stage by each of the participants and then move on to the next stage in order to avoid lagging behind.

Debrief

After the task has been successfully completed, a discussion with questions should be held:

  • What are the main processes performed by e-commerce platforms?
  • What is the relationship between product and category?
  • What is the difference between front/back panel?
  • What is the role of software extensions? (If necessary, prompt about the customization of the systems.)
  • Which e-commerce activities can be highly automated; what does this necessitate?

Variations

The task can be significantly extended according to specific needs. The main directions for development in the logistics part are:

  • Degree of integration with courier organizations – according to the proposed solutions.
  • Inventory management approaches – inventory monitoring, placing orders with suppliers, tracking orders.
  • Integration with systems such as Enterprise resource planning (ERP) and Warehouse management system (WMS).
  • Integration with warehousing processes (picking, products locations), materials handling, and packaging.
  • Automatic identification – barcode systems, GS1 standards.

The article is part of the development of a study on the application of the game approach in logistics and transport training (Output title O4) under the Erasmus+ strategic partnership project “Building an innovative network for sharing of the best educational practices, incl. game approach, in the area of international logistic and transport”, Project number: KA203/HE25/13.09.2019