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Business-to-business electronic commerce implies

that both the sellers and buyers are Business

Corporation

while business-to-consumer electronic commerceimplies that the buyers are individual consumers.

Business-to-business electronic commerce is

expected to grow to $1,330.9 billion by 2003 and

continue to be the major share of the EC market

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The percentage of Internet based B2B EC

compared to total B2B commerce will expand

from 0.2 percent in 1997 to 2.1 percent in 2000

and 9.4 percent in 2003.Computing electronics, utilities shopping and

warehousing, motor vehicles, paper and office

products food and agriculture are the leading item

in B2B EC

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Business-to-business EC covers a broad spectrum

of applications that enable an enterprise or

business to from electronic relationships with their

distributors, resellers, suppliers, and other partners.Handfield and Nichols(1999) suggest B2B

applications will offer enterprises access to the

following sorts of information

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Product:

specifications ,prices, sales history

Customers:

sales history and forecasts(estimate or predict)

Supplier: Product line and lead times ,sales terms and conditions

Product process:

capacities, commitments product plans

Transportations: carriers, lead times, costs

Inventory :

inventory levels, carrying costs locations

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Supply chain alliance:

key contacts, partners, roles and responsibilities,

schedules

Competitor: benchmarking competitive product offerings , market

share

Sales and marketing:

Point of sale (POS) promotions Supply chain process and performance:

Process descriptions, performance measures quality,

delivery time, customer satisfaction

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In this section the business models of B2B are

described. The first three models are classified

depending upon who controls the market place .

The supplier, customer or intermediary.

Other important business models are virtual

corporation networking between headquarters and

subsidiaries and online services to business

Supplier Oriented Market Place.

Buyer Oriented Market Place.

Intermediary Oriented Market Place.

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Supplier Oriented Market Place.

The common B2B model is the supplier oriented

market place.

Most of the manufacturer driven electronic stores

belong to this category.

In this method both individual customers and business

buyer use the same supplier provided marketplace

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Buyer Oriented Market Place

Under the platform of supplier oriented marketplace

The buyers acquisition department has to manually

enter the order information into its own corporation

information system

Searching e-stores and e-malls to find and compare

suppliers and products can be very costly to companies

like GE

Who purchase thousands of items on the Internet.

Therefore such big buyers would prefer to open their

own market place which we call buyer-oriented market

place

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Under this model, a buyer opens an electronic

market on its own server and invites potential

suppliers to bid on the announced RFQs are the

GE case illustrates.This model offers a greater opportunity to

committed suppliers

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IntermediaryOriented Marketplace:

The third business model is establishing and electronic

intermediary company, which runs a market place

where business buyers and sellers can meet.

This concept is similar to intermediary-based e-malls or

e-stores developed for B2C EC

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Lead time: The time between the initiation

and completion of a production process

Product line:

a particular kind of product or merchandise;"a nice line of shoes".

Subsidiaries: A company controlled by a

holding company.

RFQs requisitions for quotations

Demand the use or supply of,

Procurement: the obtaining of supplies

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Procurement Management:

From the purchasing companys point view. B2B EC isa medium of facilitating procurement managementsuch as

reduced purchase price and reduced cycle time.

To implement B2B EC from the procurementmanagements point view.

The buyer oriented marketplace or supplier oriented

market place can be used in this model where thebuyers announce the RFQs to potential suppliers forcompetitive purchasing.

The concept of this model is described in a case studywith GE trade process market place and winning thebid is the major concern

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Just in time delivery: The just In time(JIT) delivery of parts to

manufacturing buyers is crucial to realize JITmanufacturing. Since online direct marketing

requires an internal JIT manufacturing system the JIT delivery and advanced confirmation of

suppliers inventory are essential elements forB2B EC.

Just in time delivery was not a critical issue in

B2B EC, so it was not handled as a central themeof EC yet.

However as the importance of b2b grows, thestudy on JIT delivery should be emphasized.

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Many innovative B2B models were developedover the years.

Before we present these topics it isimportant to note that companies,

especially if they are large ones, can useseveral models. IBM uses a supplier model forits products a buyer model for procurementand other models for various other activities.

Other models are: B2b auctions

Managed Interactive bidding

B2b services

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B2b auctions:

B2b auctions are growing very rapidly due to thefollowing benefits they provide:

Generating revenue

Increasing page views Acquiring and retaining members

Generating revenue New sales channel that supports existing online sales.

For example Weirton steel Corp doubled its customerbase when it started auctions

New venue for disposting of excess obselete, andreturned products quickly and easily

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Increasing page view: Auctions give sitesstickiness Auction users

spend more time on a site and generate morepage views than other users

Acquiring and retaining members: All bidding transactions result in additional

registered members

Three types Independent auctions

commodity auctions

private auctions by invitation only

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Managed interactive bidding: the bidding process conducting by large companies are

managed by companies themselves.

This model provide facilities to the bidders to takeparticipation in the bidding process of the large

companies throughout globe. B2b services: B2b service model of business organization provides

after sale service to other business organization. Someb2b services are provided by intermediary other byspecialist .

Examples of B2b services are Commerce net (www.commerce.net) is a global non-

profit organization providing B2b service. Its target is topromote and support emerging communities ofelectronic commerce. Other sites that provide b2bservices are

http://www.commerce.net/http://www.commerce.net/

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The majority of B2B transactions are conductedby EDI(extranets)

We will discuss traditional EDI and Internet basedEDI separately

Traditional EDI: EDI has been around for almost 30 years in the non-

internet environment.

It standardizes the process of trading and trackingroutine business documents. Such as

Purchase order

Invoice

Payments

Delivery schedules

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Electronic data interchange translates these

documents into a globally understood

business language and transmit them

between trading partners using secure

telecommunication links.

The traditional EDI standards are EDI FACT

uses by USA for administration and

commerce trade

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Significant initial investment is needed

Restructuring business processes is necessaryto fit EDI requirements

Long start-up time is needed

Use of expensive private VAN is necessary

High EDI operating cost is needed

There are multiple EDI standards

The system is complex to use There is a need to use a converter to

translates business transactions to EDIstandards

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The most feasible alternative for putting

Online B2B trading with in the reach of any

organization in Internet Based EDI.

There are several reasons for firms to createEDI ability over the internet

The internet is publically accessible network

Provide access to a large number of trading

partnersCut communication cost by 50%

Internet browser is user friendly and easy to

use