The balancing between E-commerce logistics cost and service quality based on value engineering approach

With the rapid development of e-commerce and increasing use of modern technology such as GPS and RFID in logistics, E-commerce logistics has gradually become prevailing. Customers always expect logistics service quality gets significantly improved, whereas its cost should be substantially reduced. However, these two objectives are at some extent contradictory. The further the service quality improves, the higher the logistics cost. So it is an important issue to find a balance between them in managing and operating logistics. In this paper, we first analyze the characteristics of current e-commerce logistics and its service innovations in threefold: concept, content, and mode. Based on the value engineering theory, we study the balance between the e-commerce logistics cost and the quality of service. A simple case study is also provided.