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E-Supply Chains, Collaborative
Commerce and Corporate Portals
Author: Hafez Shurrab
II
Contents
1. Introduction _______________________________________________ 1
2. Theoretical Framework ______________________________________ 1
2.1. Supply Chain and e-Supply Chain __________________________ 1 2.2. The Transition from Supply Chain to Full Connectivity _________ 2 2.3. Collaborative Commerce _________________________________ 5 2.4. Corporate Portals _______________________________________ 6
1. Discussion ________________________________________________ 8
2. Conclusion _______________________________________________ 9
References ___________________________________________________ 10
Figures
Figure 2.2.1 Network Formation __________________________________ 2
Figure 2.2.2 Value Chain Constellation _____________________________ 3
Figure 2.2.3 Full Network Connectivity _____________________________ 4
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1. Introduction
It could be simple to the mind imagining any flow of materials as they are
simply passed through different suppliers along the supply chain. For
instance, if we look at a simple example of a water bottle, one may
straightforwardly say it consists of clean water, a plastic bottle, a plastic cap,
and a label. Therefore, one of the most common consumers’ misconceptions
is that they estimate the total cost of a product based on the estimations of the
individual components, ignoring the fact that no single material could be
passed through from a supplier to supplier without negotiations on prices,
being packaged for extra costs, transportation, and manning all the way.
A simple product as a bottle of water may include many suppliers and 3PL
providers to enable the delivery of that few number of components required
to produce a water bottle. There would be intensive communication among
all parties from suppliers to retailers in order to avoid stockouts and other
relevant potential issues that may negatively influence customer satisfaction.
Imagine now that a product is rather complex and the contributing set of
suppliers is a broad one. It would be definitely problematic and rather
challenging to use the traditional way of communication that might be
followed for producing a water bottle to coordinate the delivery of the
required components for that complex product. There is no doubt that supply
chain management (SCM) emerged as a responsive business strategy to the
challenges stem from such circumstances to better handle that kind of
challenges (Anderson et al., 2007). After the internet revolution and the rise
of wide range of web-based software applications dedicated to the
collaboration between business partners, e-business and e-commerce became
widespread terms, and the concept of e-supply chains followed the attempts
of integrating them to many businesses (Poirier & Bauer, 2000). To raise the
level of this discussion, I dedicate to take a deeper look and discuss the role
of e-supply chains, collaborative commerce and corporate portals in today’s
business.
2. Theoretical Framework
2.1. Supply Chain and e-Supply Chain
Manthou et al. (2003) define SCM as the systems, leadership, and methods
dedicated to improve the performance of organizational processes and
activities including logistics, customer satisfaction, product and service
design, order management, inventory management, purchasing, sales
forecasting, distribution, and manufacturing or production. Manthou et al.
(2003) also include the optimizing efforts required to both create and deliver
goods, services, and information from suppliers to consumers as another
primary responsibility lies in the domain of SCM. Therefore, SCM is an
effective tool to gain a competitive position within the market. Nevertheless,
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to activate the competitiveness effectiveness of SCM, it is imperative for
constituent members of any supply chain network to collaborate and dedicate
their efforts beyond the internal focus of costs cutting and profit margin
improvement within the boundaries of a single company (Zhang, 2008).
The collaboration between partners within a supply chain network is
recently managed electrically. Supply chains that are mostly managed
electronically are called electronic supply chains (Manthou et al., 2003).
According to Zhang (2007), e-SCM is a concept refers to the integration of
information flow activities required for a supply chain network into a highly
dynamic e-business environment. Zhang (2007) also adds that e-SCM
represents the e-linkages that build a supply chain network and connect
different parties and constituent members within it.
2.2. The Transition from Supply Chain to Network to Constellation and
Full Connectivity
Manthou et al. (2003) showed examples of conceptual transitions of a supply
chain network from a basic form to a full connectivity mode where e-
commerce is fully integrated and enhanced with a supply chain network.
Manthou et al. (2003) proposed three main positions for a focal firm starting
from nucleus firm position (“get going” phase), passing by nucleus firm and
allies position (“get real” phase), and ending with nucleus allies position
(“get business” phase) where full e-business connectivity is enabled.
Figure 2.2.1 shows the movement when a focal firm starts to change its
focus from internal to external environment opening opportunities for
discussions, partial sharing, and trustworthy partners. However, in this phase,
the network is still not formed, but the idea of sharing mutual benefits is
brought up and made visible for all participants.
Figure 2.2.1 Network Formation - source: (Manthou et al., 2003)
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A practical example for one of the functions shown in figure 2.2.1 is in the
buying sector. The representatives in charge of purchasing responsibility can
for example meet and discuss how the supply chain constituents can work
together to reach win-win situation not by focusing on getting lower prices,
but by cutting order entry and payment costs or even developing non-price
features and benefits and viewing e-business integrating alternatives that
might be worth investing in.
Following the same strategy with making, delivery, inventory, technology,
and selling sectors would facilitate outlining the emerging supply chain
network. The information connections and linkages between partners should
be enhanced by leading-edge technology and e-commerce features if the
integration effort is to be successful. The connections should be combined
together using a reliable communication system that can create, use, and
disseminate the vital data that enables the timely satisfaction of consumer
demands (Manthou et al., 2003).
It is common that a leading firm intersects with several value chain
constellations. Figure 2.2.2 shows the next level in which a network has been
already prepared to integrate e-commerce by supporting different constituent
members in adapting themselves and applying the required preliminary
improvements. It is also expected in this phase for the nucleus firm and its
allies to raise the level of trust that may enable establishing the first version
of their electronic network. The collective supply chain system enables
knowing the cost of each process step by using activity-based costing
information, which makes the supply chain closer to be a value chain. Being
so, the main room for optimization is in the value to be delivered and the cost
of its delivery (Manthou et al., 2003).
Figure 2.2.2 Value Chain Constellation - source: (Manthou et al., 2003)
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By recalling the same example of the buying team for this phase, it is
expected that the volume of purchases will be aggregated in key categories to
be used by all companies in the network. Moreover, the joint savings will be
generated since transaction costs are reduced and buying on a larger scale is
accomplished. The means to do consortia buying will be developed, and the
procurement activities will become web-based (Manthou et al., 2003).
The final phase of full network connectivity goes beyond saving money to
collectively find new revenues by using the advantages of e-commerce
capability across a full network. The full connectivity means that e-business
models are in use and have been jointly developed by network allies, and
there is a connected, compatible and reliable application of relevant
technology and full connectivity of information flow and different
information systems from beginning to end of the supply chain.
Figure 2.2.3 Full Network Connectivity - source: (Manthou et al., 2003)
2.2.1. Activities and Infrastructure of E-SCM
According to Manthou et al. (2003), the key activities and processes of e-
SCM include supply chain replenishment, e-procurement, supply chain
monitoring and control using RFID, inventory management using wireless
devices, collaborative planning, collaborative design and product
development, e-logistics, use of B2B exchanges and supply webs.
Supply chain replenishment (SCR) is mostly found in production and
distribution processes. The replenishment information is used to synchronize
supply with demand along SCs so that inventories are reduced, stockouts are
avoided, and the replenishment velocity is increased. Furthermore, real-time
supply and demand information enables adopting assemble-to-order and even
make-to-order manufacturing strategies. SCR is naturally sympathetic to
web-enabled customer orders (McLaren et al., 2002).
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Processes such as the purchase of both direct and indirect materials,
contracting, requisitioning, sourcing, ordering, and payment are supported by
web-based technology to form what is commonly known as e-procurement.
There are many other functions e-procurement supports including online
catalogues, contracts, shipping notices, and purchase orders. The benefits
from that could be for instance eliminating components redesign and
fostering decision making in product development by using online catalogues
and viewing available parts and their attributes. Moreover, the possibility of
purchasing orders online accelerates the ordering process, and the shipping
notifications sent in advance streamline delivery (McLaren et al., 2002).
Monitoring and controlling items along the supply chain as well as
inventory management can be done using real-time information RFID tags
and wireless devices offer, respectively. One of the main advantages of RFID
technology is tracking the essential information about items as they move
through supply chains. The type of information to be tracked and utilized by
RFID is per se a huge competitive advantage to the company. It could track
where for instance some delays throughout the supply chain occur and as
such need to be improved (Zhu et al., 2012).
Collaborative planning is one of the effective solutions to reduce bullwhip
effect. Buyers and sellers collaboratively develop shared and regularly online
updatable forecasts and supply plans along the supply chain. Likewise,
collaborative design and product development embed the same logic. The
reusability and secure sharing of product design and development techniques
as well as engineering drawings across multiple companies reduce new
product time to market (McLaren et al., 2002).
Logistics activities including material acquisition, warehousing, and
transportation are for e-logistics supported by web-based technologies.
Routing optimization together with inventory-tracking information are
enabled. For instance, internet-based freight auctions open rooms for costs
cutting. Moreover, companies can use virtual logistics services 3PL providers
offer by integrating and optimizing distribution resources (McLaren et al.,
2002).
As for the infrastructure, the main elements and tools of e-supply chains
may include electronic data interchange (EDI), extranets, intranets, corporate
portals, workflow systems and tools, groupware and other collaborative tools,
and identification and tracking tools (McLaren et al., 2002).
2.3. Collaborative Commerce
Collaborative Commerce a collaboration and interaction between employees,
business partners and/or customers of companies that comes together to form
a trading community and sharing of information online. The sharing of
information encourages integration of business (Gunasekaran & Ngai, 2004).
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Connecting companies, trading partners, agents, suppliers, distributors etc.
into a powerful competitive force to create a network to reduce costs, shorten
business processes and improve the workflow. This is crucial to be
competitive and to enhance company growth (Gunasekaran & Ngai, 2004).
The ideal goal by Collaboration Commerce is to maximize the
effectiveness a business gain with information technology, to enhance
customer service, increase the agility which is crucial to be competitive and
also to maximize the benefits of e-supply chain management (McLaren et al.,
2004).
The key to improve the communications between trading partners is
integration, automation and collaboration regardless of what level of
information technology being used at their disposal. Integration is to make
sure that the different applications, internal and external, can function with
each other. Automation and collaboration enable the different partners to
communicate with each other and to trade information (Chen et al. 2007).
Communications between different parts in Collaboration enable a unified
planning, forecast and replenishment-method, (CPFR). CPFR is useful when
suppliers and retailers work together with unified planning to optimize of
materials in a supply chain (Umeda & Zhang, 2006).
2.4. Corporate Portals
Corporate Portals are a gateway from which you can enter through a standard
web browser to access corporate information and to engage in
communications and collaboration (Grey part in document, reference?). A
part from public portals, corporate portals is designed to hide the information
from the public and to only share it with those granted access for example
employees in a company (Elsner & Krämer 2013).
One of the most useable functions of a corporate portal are the support the
portal provides in corporate decisions and collaborative process. With the
corporate portals it will be easier for manager to gain access to more hands-
on information and this will help in the decision making process into taking
the right decisions (Dias 2001).
The development of corporate portals is moving from a simple knowledge
database from which employees can withdraw information to a more
interactive portal of applications. Though to the success of the corporate
portal employees have to be informed of the current functionalities or the
applications that should improve productivity will not be affective (White
2003). And to increase productivity each employee task should be evaluated
and identified to design the portal and applications to relevant employee
(Elsner and Krämer 2010).
“Enterprise information portals are applications that enable
companies to unlock internally and externally stored information,
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and provide users a single gateway to personalized information
needed to make informed business decisions.” (Shilakes & Tylman
1998)
There are two different types of classifying a portal, first one is relative to
the environment, public or corporate, the other are related to their functions,
decision support and/or collaborative processing (Dias 2001).
Decision support is a system consisting with information to help managers
and analysts to make decisions. Collaborative processing portals is similar to
groupware and automation systems and deal with information from the
supply chain stored in the company applications but also information that is
produced by those in the company or in the supply chain (Dias 2001).
Although Dias’s (2001) work might be outdated by the rapid development
of e-supply chain management, collaborative commerce and corporate portals
and much has happened since 2001, Dias (2001) could see benefits such as
structured access to enterprise information, a place for trading information
between different parts and functions within a company or a collaboration.
And with high connectivity and ease of use that a web interface presents,
corporate information can be accessed anywhere. But this will only come in
handy if the information if well-structured and organized, otherwise a user
might feel overwhelmed, or as Firestone (2000) call it – information
overload.
Dias (2001) also claims that corporate portals has a probability to end up
in high return of investment because portal applications are easier to
maintain, faster to deploy and cheaper than customized systems.
2.4.1. Groupware
Groupware is software that encourages people in collaboration by giving
them tools for engaging in communications to achieve a common goal and
for the involving members to share information. A groupware could contain
functions as folder sharing, conference, screen sharing, organizing etc. This
gives a company or e-supply chain a range of methods to engage in
communication and information sharing and is key for virtual teamwork and
is a good component in a workflow (Dustdar, 2005).
There are different kinds of groupware such as; communication-oriented
groupware, enterprise groupware and workspace groupware.
Communication-oriented groupware, which the work activities and
interaction mostly focuses on communication. An example of
communication-oriented groupware is e-mail. Enterprise groupware is more
focused on wide messaging and discussion databases. Workspace groupware
allows employees to upload and download files, by this able to organize their
own work (Dustdar 2005).
Accordingly to Dustdar (2005) groupware does not involve a a proper
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organizational model presenting the task, their members, members roles etc.
and therefore the system treats every message equally without any
consideration of underlying business processes which is vital for an effective
collaboration.
2.4.2. Workflow
A workflow is a series of steps in a process that makes an organizations work
procedures. The activity or step could be either a human or machine
performed. By planning the different steps a company can improve its
effectiveness when all is planned out where for example one task is done it is
passed on to the next person/machine for processing. This is called workflow
management (Dustdar 2005).
There are some benefits to achieve by implementing workflow
management. Management get a good overlook of the work process
performing the different series of tasks so they get improved control of the
business process. The improved control should also consist in better work
quality and efficiency when done right. The mangers job should also become
a lot easier this way (Dusdar 2005).
1. DiscussionIntroducing e-collaboration is extremely difficult. Involving loyal suppliers to
a particular focal firm is not easy-going due to increasing globalization and
offshoring. For instance, it is common that 3PL providers, especially the
global ones, intersect with many competitors. Besides, suppliers and partners
contribute differently. Thus, not all of them are critical to a supply chain.
Therefore, it is recommended to configure and customize the data to be
shared through e-collaboration based on the need for sharing. Using
analytical tools to segment suppliers is recommended. The relationship with
suppliers with rather high impact should be thoroughly studied since they are
more likely to be greatly connected with the focal firm in terms of e-
collaboration. If such suppliers are also connected with other competitors, a
high risk may threaten the competitive advantage of the focal firm. Therefore,
selecting the right partners to share trust and start e-collaboration with is
fairly important since proceeding to high level of e-collaboration may require
moving away from win-win situations for some suppliers. Strategic suppliers
should have less potentiality to lose win-win in high level of e-collaboration.
Furthermore, it is recommended that the focal firm is in charge of the portal
and intranet contents since the whole supply chain revolves around the value
of their core competence. Otherwise, the contribution of each constituent
member of a supply chain should be evaluated and the responsibility should
be given to the member delivers the highest value.
Since most of today’s supply chains are globally connected, lack of
logistics infrastructure might be a challenge for one or more constituent
members along the supply chain, which adds higher risk to the delivery of the
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right goods on time. Moreover, bullwhip effect is a very common risk in
supply chains and e-collaboration can hugely contribute in resolving and
reducing that effect. There might be many other concerns related to quality
problems with materials, order taking, order fulfilment, electronic payments
… etc. Such concerns should be dealt with as potential risks and planned for.
A key element in Collaborative Commerce, C-Commerce, is Business
Process Management (BPM) for complex solutions where companies and
business partners can engage in communication and sharing of information.
2. Conclusion
E-SCM is the integration of information flow activities required for a supply
chain network into a highly dynamic e-business environment. The integration
of e-business applications may however vary from between supply chain
networks ranging from network formation to full functional connectivity that
can increase the productivity and cut the overall cost.
E-supply chain success relies heavily on collaboration between partners
and defining the required degree of sharing information. Besides, the mutual
trust should match the level of integration.
For a having effective collaborative commerce, the implementation of it is
a key. If the different parts of the collaboration do not get it right, it might
have implications in the e-supply chain management systems. As a result of
bad implementation the company/companies might lose market shares to
competitors.
A corporate portal could be a good alternative to consider to engage in the
communication needed in a collaboration, as a fast, easy and relatively cheap
as Dias (2001) demonstrates it could be a first step into developing a strong
and competitive e-supply chain with all parts of the collaboration. The
applications could even be customized to suppliers and salespeople to
maximize the performance and the benefits of both collaboration and the
portal.
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