B2B Commerce

E-Commerce framework

Common business services infrastructure (security/authentication, electronic payment,

directories/catalogs)

The messaging & information distribution infrastructure

Multimedia content & network publishing infrastructure

The information superhighway infrastructure (telecom, cable TV, wireless, Internet)

Public policy legal & privacy

issues

Technical standards for electronic documents, multimedia

& n/w protocols

E-commerce applications

• Supply chain management• Video on demand• Procurement & purchasing• On-line marketing & advertising• Home shopping

Organizational structures

• The vertical organization– Problems:

• Creates boundaries ( gaps between employees)• Dept goals may cause friction among depts

• The horizontal organization– Goal

Facilitate smooth transition of intermediate products & services through its various functions to the customer

• Goal achieving:Empower employeesImprove communicationEliminate unnecessary work

• Two-tiered structure– Senior management (strategic decisions & policies)– Employees (process team)

• Objective of horizontal structure:– Change the staff’s focus from coordinating &

reporting to improving flow management , work quality & increasing value for customers

New forms of organization structure

1. Virtual / Network Organizational structure (Eg:- CISCO Systems – manufacturer of routers)

2. Brokerage structures

Virtual / Network Organizational StructureThe virtual organization is closely coupled

upstream with its suppliers and downstream with its customers

A virtual organization or company is one whose members are geographically apart, usually working by computer e-mail and groupware while appearing to others to be a single, unified organization with a real physical location.

Geographically dispersed teams allow organizations to hire and retain the best people regardless of location.

Electronic Brokerage

• Goal:- to increase the efficiency of internal marketplace

• Multiple services provided by a single interface with a single point of accountability on an order-by-order basis

Types of electronic brokerages in internal markets

customers

Order management & financial accounting

Design brokerage

Manufacturing & scheduling brokerage

Logistic & supply chain management brokerage

Production brokerage

shipping

Internal markets

order

delivery

Customization & Internal Commerce

Electronic commerce & technology

Technology provides access to a variety of products & services

Consumer behavior & choice

Organization dynamics & market place competition

Need to cut costs drives the need for improved technology

Consumer choice dictates the marketing, distribution & production of products & services

The technology, choice and marketplace triad

• Mass customization, not mass production– Cars, planes, textile / clothing technology

Example:- – Radio frequency tags, eliminate the need

for bar coded labels– Infrared scanning

• Customization of services

Supply Chain Management (SCM)

• SCM is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible.

• SCM optimizes info & product flows from the receipt of the order, to purchase of raw materials, to delivery and consumption of finished goods

Characteristics of SCM• Ability to source raw material / finished goods

from anywhere in the world• Centralized, global business & management

strategies with flawless local execution• On-line, real-time distributed info processing to

the desktop, providing total supply chain information visibility

• Manage info across industries & enterprises• Integration of all supply chain processes &

measurements• Development & implementation of accounting

models• Reconfiguration of the supply chain org into high

performance teams

Models of SCM• Push based SCM• Pull based SCM

A customer "pulls" things towards themselves, while a producer "pushes" things toward customers

• In a "push" system the consumer does not request the product to be developed; it is "pushed at" the end-user by promotion. example:- perfume product

• In a "pull" system the consumer requests the product and "pulls" it through the delivery channel. example:- car manufacturing company Toyota. Toyota only produces cars when they have been ordered by the customers.

Elements of these models1. logistic & distribution (integrated logistics)

A methodology employed to more efficiently manage inventory mechanisms. The activities are viewed as a system, rather than many different activities. Usually involves the inventory pulls from manufacturing sites and warehouses, through distribution to the customer. The execution involves merging transportation modes, systems and distribution for the optimum solution.

2. Integrated marketing & distributionintegrate the customer directly & react to changes in demand by modifying the supply chain

3. Agile manufacturingAgile manufacturing is a term applied to an organization that has created the processes, tools, and training to enable it to respond quickly to customer needs and market changes while still controlling costs and quality.

Key attributes

Agility has four components:1. delivering value to the customer2. being ready for change3. valuing human knowledge and skills4. forming virtual partnerships

Financial / marketing-driven forecast

Master scheduling

Replenishment based on distribution center inventory

Manual purchase order & invoicing

Order point based on warehouse inventory & historical forecasts

Deals, promotions & forward buying

Manual purchase orders, info entry and o/p

Order point based on shelf inventory & forecasts

Promotions

Manual entry of items to be reordered

Retail store

Retail distribution center

Manufacturer

Push based supply chain

Consumers purchase merchandise

POS data collection

Perpetual inventory tracked UPC level

Automatic replenishment using EDI services

Automatic replenishment

Shipping container marking

cross-dock receiving

EDI services

Demand driven forecast based on POS data & product development

Micromarket-driven

Short cycle manufacturing

Advances shipping notice & EDI services

Bar code scanners & UPC ticketing

Manufacturer

Retail distribution center

Retail store

Pull based supply chainConsumers purchase merchandise