Logistic aspects of the Electronic Commerce in Cuba

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Logistic aspects of theElectronic Commerce in
Cuba

• Juan Fernández
• Cuban Commission of Electronic Commerce
• Ministry of Informatics and Communications
• Republic of Cuba

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(No Transcript)
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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
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Program for the Information Society in Cuba

• 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.

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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.

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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.

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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

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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 Ca
r and minibus rental with chauffer
Viazul www.viazul.cu Bus rental and
transportation services
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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 co
nsultation, services and articles
Habanos www.habanosdecuba.cu Cigar boxes to be
delivered in Cuba Divep www.ccw.cu Domestic
B2B industrial supply store
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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
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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.

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

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Additional hurdles for the 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.

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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.

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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.

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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 its
  economy.
• Therefore, its 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 thats why to increase the
  cultural level of the population has a paramount
  importance.
• And this knowledge should be supported by the
  proper organizational scheme and regulations.

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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_at_mic.cu