b2bcommercesupplychain
Post on 08-Apr-2018
219 Views
Preview:
TRANSCRIPT
-
8/7/2019 B2BCommerceSupplyChain
1/50
Copyright 2009 Pearson Education, Inc.
Aditya Pratap Singh(2010JCA2210)
Amit Chouhan (2009SMF6685)
Parvinder Singh(2009SMT6708)
B2B E-commerce: Supply Chain
Management and Collaborative
Commerce
-
8/7/2019 B2BCommerceSupplyChain
2/50
Trends in B2B E-commerce, 2008-
2009 Double-digit growth as firms gain experience
Firms increase comfort level with security, payments,helping expand use of B2B channels
Growing realization that most important benefits are notlow costs of materials, but gains in supply chainefficiency, better spend management, improvedbusiness process
Decline of independent Net marketplaces Rapid growth in e-procurement, private industrial
networks, collaborative commerce B2B applications
Continued consolidation in Net marketplace and
software vendor markets
-
8/7/2019 B2BCommerceSupplyChain
3/50
Defining B2B Commerce
Before Internet, B2B transactions called trade orprocurement process
Total inter-firm trade: Total flow of value among
firms B2B commerce: All types of computer-enabled
inter-firm trade
B2B e-commerce (Internet-based B2B
commerce): That portion of B2B commerce thatis enabled by the Internet
-
8/7/2019 B2BCommerceSupplyChain
4/50
The Evolution of the Use of Technology
Platforms in B2B CommerceA
-
8/7/2019 B2BCommerceSupplyChain
5/50
Growth of B2B Commerce 2000-2012 A
SOURCES: U.S. Census Bureau, 2008
-
8/7/2019 B2BCommerceSupplyChain
6/50
TheGrowth of B2B E-commerce
B2B e-commerce 2010: $4.9 trillion
2012: $7.3 trillion
Electronic marketplaces will not be dominantform of B2B e-commerce
Private industrial networks continue to playdominant role in B2B
Non-EDI B2B e-commerce most rapidlygrowing type of e-commerce
Over 80% U.S. firms buy some indirect goodsover Internet; 70% buy some direct goodsover Internet
-
8/7/2019 B2BCommerceSupplyChain
7/50
Industry Forecasts
Not all industries will be similarly affected byB2B e-commerce
Not all industries would benefit equally
Factors influencing migration to e-commerce Significant utilization of EDI
Large investments in IT and Internet infrastructure
e.g. Aerospace and defense, computer, and industrialequipment industries
Market concentrated on purchasing and/or selling
e.g. Energy, chemical industries
-
8/7/2019 B2BCommerceSupplyChain
8/50
Potential Benefits of B2B E-commerce
Lower administrative costs
Lower search costs for buyers
Reduced inventory costs by:
Increasing competition among suppliers (increasingprice transparency)
Reducing inventory carried
Lower transaction costs by:
Eliminating paperwork
Automating parts of procurement process
-
8/7/2019 B2BCommerceSupplyChain
9/50
Potential Benefits (contd)
Increased production flexibility by ensuring just-in-time parts delivery
Improved quality of products by increasing
cooperation among buyers and sellers Decreased product cycle time by sharing of
designs and production schedules
Increased opportunities for collaborating withsuppliers and distributors
Greater price transparency
-
8/7/2019 B2BCommerceSupplyChain
10/50
The Procurement Process and the
Supply Chain Procurement process:
The way firms purchase the goods they need toproduce the goods they sell
Supply chain:
Firms that purchase goods, their suppliers, and theirsuppliers suppliers, and relationships and processes
involved Steps in procurement process
Deciding who to buy from and what to pay
Completing transaction
-
8/7/2019 B2BCommerceSupplyChain
11/50
The Procurement Process
-
8/7/2019 B2BCommerceSupplyChain
12/50
Types of Procurement
Types of goods
Direct goods: Goods integrally involved in productionprocess
Indirect goods: All other goods not directly involved inproduction process (MRO goods)
Methods of purchasing
Contract purchasing: Involves long-term writtenagreements to purchase specified products, with
agreed-upon terms and quality
Spot purchasing: Involves purchase of goods basedon immediate needs in larger marketplaces thatinvolve many suppliers
-
8/7/2019 B2BCommerceSupplyChain
13/50
Types of Procurement (contd)
Procurement is highly information intensive andlabor intensive 3.5 million U.S. workers
Use of Internet can simplify process and reduce
search, research, negotiating costs Multi-tier supply chain
Complex series of transactions between firm andthousands of suppliers:
Primary suppliers
Secondary suppliers who do business with primary suppliers
Tertiary suppliers who do business with secondary suppliers
-
8/7/2019 B2BCommerceSupplyChain
14/50
The Multi-Tier Supply Chain A
-
8/7/2019 B2BCommerceSupplyChain
15/50
The Role of Existing Legacy
Computer Systems Legacy computer systems
Generally older mainframe and minicomputersystems used to manage key business processeswithin firm
MRP systems (Materials requirements planning)
Enable firms to predict, track, and manage parts of complexmanufactured goods
ERP systems (Enterprise resource planning)
More sophisticated MRP systems that include humanresources and financial components
-
8/7/2019 B2BCommerceSupplyChain
16/50
Trends in Supply Chain Management
and Collaborative Commerce Supply chain management crucial to understanding B2B
e-commerce
Supply chain management (SCM): Wide variety of activities that firms and industries use to
coordinate key players in their procurement process
Major developments in supply chain management
Supply chain simplification Electronic data interchange
Supply chain management systems
Collaborative commerce
-
8/7/2019 B2BCommerceSupplyChain
17/50
Supply Chain Simplification
Essential for just-in-time production models
Typically achieved by:
Working with strategic group of suppliers to reduce productand administrative costs, while improving quality
Purchasing under long-term contracts that contain specifiedquality, cost, and timing goals
May involve
Joint product development and design
Integration of computer systems
Tight coupling (method of ensuring that suppliers preciselydeliver ordered parts at specific time and to particularlocation, to ensure production process is not interrupted)
-
8/7/2019 B2BCommerceSupplyChain
18/50
The Evolution of EDI as a B2B Medium A
-
8/7/2019 B2BCommerceSupplyChain
19/50
Supply Chain Management Systems
Continuously link activities of buying, making,and moving products from suppliers topurchasing firms
Integrates demand side of business equation byincluding order entry system in the process
With SCM system and continuousreplenishment, inventory is eliminated and
production begins only when order is received
Hewlett Packards SCM system: Elapsed timefrom order entry to shipping PC is 48 hours.
-
8/7/2019 B2BCommerceSupplyChain
20/50
Supply Chain Management Systems A
-
8/7/2019 B2BCommerceSupplyChain
21/50
Collaborative Commerce
Direct extension of SCM systems and supplychain simplification
Use of digital technologies enablingorganizations to collaboratively design, develop,build, and manage products through life cycles
Involves move from transaction focus torelationship focus among supply chainparticipants
Unlike EDI, more like an interactiveteleconference among members of supply chain
Example: Group Dekko
-
8/7/2019 B2BCommerceSupplyChain
22/50
Elements of a Collaborative
Commerce System A
-
8/7/2019 B2BCommerceSupplyChain
23/50
Main Types ofInternet-Based B2B
Commerce Net marketplaces: Bring together potentially thousands
of sellers and buyers in single digital marketplaceoperated over Internet
Transaction-based
Supports many-to-many as well as one-to-many relationships
Private industrial networks: Bring together small numberof strategic business partner firms that collaborate to
develop highly efficient supply chains Relationship-based
Support many-to-one and many-to-few relationships
Largest form of B2B e-commerce
-
8/7/2019 B2BCommerceSupplyChain
24/50
Two Main Types ofInternet-Based
B2B Commerce A
-
8/7/2019 B2BCommerceSupplyChain
25/50
Net Marketplaces
Various ways to classify Net marketplaces: Pricing mechanism
Nature of market served
Ownership
Can also classify by business functionality What businesses buy (direct vs. indirect goods)
How business buy (spot purchasing vs. long-termsourcing)
Four main types E-distributors
E-procurement networks
Exchanges
Industry consortia
-
8/7/2019 B2BCommerceSupplyChain
26/50
Pure Types ofNet Marketplaces a
-
8/7/2019 B2BCommerceSupplyChain
27/50
Characteristics ofNet Marketplaces
Bias Seller vs. buyer vs. neutral
Ownership: Industry vs. third party
Pricing mechanisms Fixed price catalogs, auctions, bid/ask, RFPs/RFQs
Scope/Focus Horizontal vs. vertical markets
Value Creation What benefits offered customer?
Access to Market Public markets vs. private markets
-
8/7/2019 B2BCommerceSupplyChain
28/50
E-distributors
Most common type of Net marketplace
Provide electronic catalogs that represent products ofthousands of direct manufacturers
Typically independently owned intermediaries thatoffer industrial customers single source from which toorder indirect goods on spot basis
Typically operate in horizontal markets because theyserve many different industries with products frommany different suppliers
Usually fixed price with discounts for large customers
Example: W.W. Grainger
-
8/7/2019 B2BCommerceSupplyChain
29/50
E-distributors A
-
8/7/2019 B2BCommerceSupplyChain
30/50
E-procurementNet Marketplaces
Independently owned intermediaries connecting hundredsof online suppliers offering millions of indirect goods tobusiness firms who pay fees to join the market
Typically used for long-term contractual purchasing ofindirect goods
Revenues from transaction fees, licensing consultationservices and software, network fees
Include online catalogs of hundreds of suppliers
Offer value chain management (VCM) services Automation of entire procurement process on buyer side,
automation of selling business processes on seller side
Many-to-many market
Example: Ariba
-
8/7/2019 B2BCommerceSupplyChain
31/50
E-procurementNet Marketplaces a
-
8/7/2019 B2BCommerceSupplyChain
32/50
E-commerce in Action: Ariba
Ariba Supplier Network: Internet-based networkthat connects suppliers to customers and theirpartners
Also offers Spend Management solutions tomanage all of a companys non-payrollexpenses
Aribas original vision was to revolutionizeprocurement and supply process in largecorporations
-
8/7/2019 B2BCommerceSupplyChain
33/50
E-commerce in Action: Ariba (contd)
Has faced many difficulties in bringing this visionto fruition
Implementation of its software by large companies iscomplex, time consuming and expensive
Failed to understand power of existing and Web-based EDI systems
Competitive response from other major technologyplayers
Difficulties getting suppliers to join Ariba SupplierNetwork
Currently operating at significant net loss; futureprospects not great
-
8/7/2019 B2BCommerceSupplyChain
34/50
Exchanges
Independently owned online marketplaces that connecthundreds to potentially thousands of suppliers andbuyers in dynamic, real-time environment
Typically vertical markets focusing on spot purchasingrequirements of large firms in single industry
Make money by charging commission on transaction
Variety of pricing models used Online negotiation, auction, RFQ, fixed
Tend to be buyer-biased
Suppliers disadvantaged by competition Many have failed due to low liquidity (typically measured
by number of buyers and sellers in market, volume oftransactions and size of transactions)
-
8/7/2019 B2BCommerceSupplyChain
35/50
Exchanges A
-
8/7/2019 B2BCommerceSupplyChain
36/50
Industry Consortia
Industry-owned vertical markets that enable buyers topurchase direct inputs from limited set of invitedparticipants
Emphasize long-term contractual purchasing and
development of stable relationships Ultimate objective: Unification of supply chains within
entire industries through common network andcomputing platform
Make money from transaction and subscription fees Offer many different pricing mechanisms
Auctions, fixed prices, RFQs, negotiated
Can force suppliers to use consortias networks
-
8/7/2019 B2BCommerceSupplyChain
37/50
Industry Consortia A
-
8/7/2019 B2BCommerceSupplyChain
38/50
The Long-Term Dynamics ofNet
Marketplaces Pure Net marketplaces moving away from simple
electronic marketplace vision and toward more centralrole in changing procurement process
Consortia and exchanges beginning to work together inselected markets
E-distributors joining large e-procurement systems andindustry consortia as suppliers
Movement from simple transactions involving spotpurchasing to longer-term contractual relationshipsinvolving both direct and indirect goods
Buyers and suppliers acclimatizing to digital environment
-
8/7/2019 B2BCommerceSupplyChain
39/50
Net Marketplace Trends a
-
8/7/2019 B2BCommerceSupplyChain
40/50
What Are Private Industrial Networks?
Private trading exchanges (PTXs)
Web-enabled networks for coordination of trans-organizational business processes (collaborativecommerce)
Direct descendant of EDI; closely tied to ERP systems
Typically involve manufacturing and support industries
Typically center around single, very large manufacturing firm that
sponsors network
Range in scope from single firm to entire industry
Example: Procter & Gamble
-
8/7/2019 B2BCommerceSupplyChain
41/50
Procter & Gambles Private Industrial
Network a
-
8/7/2019 B2BCommerceSupplyChain
42/50
Characteristics of Private Industrial
Networks Objectives include:
Efficient purchasing and selling business processes industry-wide
Industry-wide resource planning to supplement enterprise-wideresource planning
Increasing supply chain visibility
Closer buyer-supplier relationships
Operating on global scale
Reducing industry risk by preventing imbalances of supply anddemand
Focus on continuous business process coordination
Typically focus on single sponsoring company that ownsthe network
-
8/7/2019 B2BCommerceSupplyChain
43/50
Private Industrial Networks and
Collaborative Commerce Forms of collaboration:
Collaborative resource planning, forecasting, andreplenishment (CPFR):
Working with network members to forecast demand, developproduction plans, and coordinate shipping, warehousing andstocking activities to ensure that retail and wholesale shelfspace is replenished with just right amount of goods
Demand chain visibility
Marketing coordination and product design
Can ensure products fulfill claims of marketing
Feedback enables closed loop marketing
-
8/7/2019 B2BCommerceSupplyChain
44/50
Pieces of the Collaborative Commerce
Puzzle a
-
8/7/2019 B2BCommerceSupplyChain
45/50
Implementation Barriers
Concerns about sharing of proprietary, sensitivedata
Integration private industrial networks into
existing ERP systems and EDI networks difficult,expensive
Requires change in mindset and behavior ofemployees and suppliers
-
8/7/2019 B2BCommerceSupplyChain
46/50
Industry-Wide Private Industrial
Networks Successful single firm networks adopted by
entire industry
P&G system sold to IBM, re-sold to entireconsumer products industry in U.S.
ISYNC manufacturers in alcohol andbeverage, automotive, entertainment, grocery,
healthcare, office supplies industries
Agentrics founded by worlds largest retailers;focuses on auctions, services for retail industry
-
8/7/2019 B2BCommerceSupplyChain
47/50
An Industry-Wide Private Industrial
Network a
-
8/7/2019 B2BCommerceSupplyChain
48/50
Long-TermDynamics of Private
IndustrialNetworks As large firms become more accustomed to
working closely with both supply chain partnersand distributors, they will seek to push theboundaries of their networks to extend acrossthe industry as a whole, to other industries, andto elaborate new roles for themselves andothers
Some failed efforts to develop Net marketplacesled to the development of collaborative networks
e.g. construction industry
-
8/7/2019 B2BCommerceSupplyChain
49/50
References
Constructing collaborative E-business platform to manage supply
chain by Cheng Tian-Min, School of Economics and Management,Zhongyuan University of Technology, Zhengzhou China at 2009International Conference on Information Management, InnovationManagement and Industrial Engineering
Collaborative supply chain planning using electronic marketplaces byMartin Rudberg, Nicklas Klingenberg, Stockholm, Sweden
http://www.imscart.com/articles/collaborative_ecommerce.html
-
8/7/2019 B2BCommerceSupplyChain
50/50
THANKYOU!
top related