E businnes and the supply chain

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.