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Logistic aspects of the Electronic Commerce in Cuba

Logistic aspects of the Electronic Commerce in Cuba. Juan Fernández Cuban Commission of Electronic Commerce Ministry of Informatics and Communications Republic of Cuba. Some Statistics About Cuba. Area: 110,860 km ² Population: 11.2 million Provinces: 14 Municipalities: 169

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Logistic aspects of the Electronic Commerce in Cuba

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  1. Logistic aspects of theElectronic Commerce in Cuba Juan Fernández Cuban Commission of Electronic Commerce Ministry of Informatics and Communications Republic of Cuba

  2. Some Statistics About Cuba • Area: 110,860 km² • Population: 11.2 million • Provinces: 14 • Municipalities: 169 • Schooling rate (6-14 years): 97.8% • Number of telephones: 4.7 per 100 inhab.(Fixed lines) (digital only 60%) • Number of computers: 2 per 100 inhab. • Number of e-mail accounts: ~ 100,000 • Computers with internet: ~ 60,000 Source: www.cubagob.cu

  3. It was outlined in 1997. It aims for the massive use of the information and communication technologies (ICT) with the following general objectives: To increase the efficiency and competitiveness of production and services, improving their quality and decreasing their material and energy consumption. To increase the effectiveness and to ease the decision making process of government and the administration through the availability of reliable and updated information at all the levels. To generate a source of revenue for Cuba through the export of products and services of the national software industry. Program for the Information Society in Cuba

  4. Program for the Information Society in Cuba General objectives (cont.): • To raise the quality of the public services, especially in the education, health and social security sectors. • To improve the quality of the services that the popular administration councils offers by diminishing the average time and the steps that the citizen must carry out. • To offer to the world, by means of internet, trustworthy information about Cuba, its political, social and economic reality. • To offer to researchers, educators, students, functionaries and any interested person, access to information that exist in the internet and in other electronic formats.

  5. Cuban situation to undertake Electronic Commerce Disadvantages: • Deficient infrastructure (network and services). • Lack of knowledge on the subject. • Inadequate regulations. Advantages: • State will to advance in this activity: Creation of the Cuban Commission of e-commerce (1999) and the Ministry of Informatics and Communications (2000). • Investments already going on to improve the infrastructure. • Great number of trained or “trainable” specialists.

  6. Cuban Commission of Electronic Commerce Created in January of 1999 Government involvement and support To build the proper infrastructure: • Telecomm infrastructure • Service infrastructure • Regulatory infrastructure To train and educate: • In the development of applications • In the marketing and managerial aspects

  7. Cuban e-commerce sites No delivery (intangibles or services): Company: Internet address: Product or service: Cubacel www.cubacel.cu Rental of cell phones CUBANACÁN www.cubanacan.cu/cubacar Car rental Hotel Nacional www.hotelnacionaldecuba.cu Hotel reservation Teledatos quickcash.cubaweb.cu Money remittances Transtur www.transturtaxionline.cu Car and minibus rental with chauffer Viazul www.viazul.cu Bus rental and transportation services

  8. Cuban e-commerce sites Delivery inside Cuba (domestic e-commerce): Company: Internet address: Product or service: CUBANACÁN www.cuba-shop.com Gift shops with the Softel www.cubagiftstore.com delivery inside Cuba CUBANACÁN www.optica-miramar.com Optician consultation, services and articles Habanos www.habanosdecuba.cu Cigar boxes to be delivered in Cuba Divep www.ccw.cu Domestic B2B industrial supply store

  9. Cuban e-commerce sites Delivery outside of Cuba (Export): Company: Internet address: Product or service: Tesys www.cubaonline.cu Books, music CDs, videos, perfumes and cosmetics Artex www.discuba.com CDs of cuban music Prensa Latina www.latincuba.com Virtual store of Cuban information products

  10. Electronic commerce and international transport services The only experience so far is the use in the Cuban shipping companies of the Internet for internal communication between their premises and with their vessels through Internet – Inmarsat. Currently: • Electronic mail. In development: • On-line chat and voice. • Videoconferencing.

  11. Avoiding the logistic bottleneck? Of the 14 ongoing e-commerce projects only 3 tackle the thorny problem of international fulfillment.

  12. What is restrainingthe Cuban enterprises? • Logistic personnel with little knowledge of the best practices. • Insufficient compatibility among the information systems (if any) of the different enterprises in the supply chain. • Deficient connectivity for clients and providers. • Difficulties to obtain the best components for a secure and low cost packaging. • Non-existence or limited in quantity and quality of specialized service providers. • No integration of the supply – production – distribution processes.

  13. Additional hurdles forthe Cuban enterprises: • Cuban customs regulations not appropriate for B2C e-commerce. • High cost of the international parcel companies. • Difficulties to process the claims of the customers. • The blockade of the United States to Cuba sets additional hurdles: • Limiting the access to the biggest market (the U.S.). • Impossibility to use US dollars as the currency for the payments in the virtual stores.

  14. As a consequence, the service is characterized by: • Orders incompletely delivered. • Violation of delivery deadlines. • Lengthy order-delivery cycles. • Limited capacity to react to contingencies. • Slow response to the changes in the clients demands. • Increase in the stock levels and immobilization of capital. • Interruptions in the material flow due to unbalances between the processes that form the logistic chain.

  15. Working for a solution: • Re-engineering of the enterprises. • Automation of the business processes in the enterprises. • Improve the connectivity of the enterprises. • Big effort in training everybody involved, from managers to foremen. • Preparing the regulatory framework. • Implementing “Pilot Projects” to identify and test the best practices. • Creation of enterprises specialized in logistics.

  16. Conclusions: • The problems that affect the viability of the electronic commerce in a developing country like Cuba can not be isolated from other problems that emanate from the underdevelopment state of it’s economy. • Therefore, it’s solution should be part of a wider strategy of ICT for development. • In the end, these problems will have to be solved by persons, so that’s why to increase the cultural level of the population has a paramount importance. • And this knowledge should be supported by the proper organizational schemeand regulations.

  17. Thank you For more information please contact: Juan Fernández Coordinator of the Cuban Commission of E-Commerce Ministry of Informatics and Communications Republic of Cuba juan@mic.cu

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