E-Businnes and The Supply Chain
The Role of E-BusinessE-business is the execution of business transactions via the
internet:• Providing product information.• Placing orders with Suppliers.• Allowing customers to place orders.• Allowing customers to track orders.• Filling and delivering orders to customers.• Receiving payment from Customers.
Today, The internet plays a significant role in many supply chainsAnd companies are using the internet to conduct a wide variety ofSupply Chain transactions.
B2B vs B2C
• Business to Business commerce. When one business sells to another business rather than to an end user
• Transactions between a company and a consumer.
The role of E-business
The Value of e-business will allow business to create significat value in the future.
The value however will depend upon the industry and the stage in the supply chain a firm occupies.
The E-business Framework
• Impact on responsiveness. (which primarly affects a company’s ability to grow and protect revenue).
• Impact on effiency. (which primarily affects a company’s cost).
Impact of E-Business on Responsiveness
Enables a company to gain new revenues or to protect existing revenues.
• Direct Sales to Customers.• 24 Hour access from any location.• Wider Product portfolio and Information Aggregation.• Personalization/Customization.• Faster time to Market.• Flexible pricing, product portfolio, and promotions• Price and Service discrimination• Efficient funds Transferr• Lower stockout levels.• Convenience/automated processes
Impact of E-business on Cost
• Inventory• Facilities• Transportation.• Information
Dell
• Customers• Inventory Cost• Facility Cost• Transportation• Information
Dell
Area Impact Area Impact
Direct Sales xx Efficient funds transferr xx
24 Hour access xx Lower Stockouts xx
Wider Product portfolio xxConvenience/ automated processes equal
Personalizaion/ customization xx Inventory xx
Faster time to market xx Facilities xx
Flexible pricing, portfolio promotions xx Transportation less
Price discrimination Equal Information equal
Amazon
Amazon
• Customers• Inventory Cost• Facility Cost• Transportation• Information
Amazon
Area Impact Area Impact
Direct Sales Equal Efficient funds transferr equal
24 Hour access xx Lower Stockouts x
Wider Product portfolio xxConvenience/ automated
processes equal
Personalizaion/ customization xx Inventory x
Faster time to market x Facilities x
Flexible pricing, portfolio promotions x Transportation less
Price discrimination Equal Information less
Exito
Éxito
• Inventory Cost• Facility Cost• Transportarion• Information Cost
Area Impact Area Impact
Direct Sales Equal Efficient funds transferr equal
24 Hour access x Lower Stockouts x
Wider Product portfolio EqualConvenience/ automated
processes equal
Personalizaion/ customization x Inventory equal
Faster time to market equal Facilities less
Flexible pricing, portfolio promotions x Transportation less
Price discrimination Equal Information less
Magnitude value from B2B e-business
Transaction Costs:• Search products.• identify availability and pricing,• identify substitutes.Improved Market Efficiencies• A large numbers of buyers/sellers can be
attracted to the online sites.
Supply Chain Benefits
The Value of supply Chain benefits can be higher when product life cycles are short.
• Increased visibility• Collaboration
A firm can be successful with e-business only if it can integrateThe interntet with existing channels of distribution in way thatUses the strenghts of each appropiately
E-business in practice1. Integrate the Internet with the existing physical
network.2. Devise shipment pricing strategies that reflect costs.3. Optimize e-businness logistics to handle packages not
pallets.4. Design the e-business supply chain to efficiently
handlre returns.5. Keep Customers informed throughout the order
fullfillment Cycle.