E businnes and the supply chain
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E-Businnes and The Supply Chain
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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.
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Today, The internet plays a significant role in many supply chainsAnd companies are using the internet to conduct a wide variety ofSupply Chain transactions.
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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.
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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.
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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).
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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
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Impact of E-business on Cost
• Inventory• Facilities• Transportation.• Information
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Dell
• Customers• Inventory Cost• Facility Cost• Transportation• Information
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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
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Amazon
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Amazon
• Customers• Inventory Cost• Facility Cost• Transportation• Information
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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
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Exito
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Éxito
• Inventory Cost• Facility Cost• Transportarion• Information Cost
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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
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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.
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Supply Chain Benefits
The Value of supply Chain benefits can be higher when product life cycles are short.
• Increased visibility• Collaboration
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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
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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.
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