Y Narahari, Computer Science and Automation, Indian Institute of Science B2B MARKETPLACES AND E-PROCUREMENT Y. NARAHARI Computer Science and Automation.

Y Narahari, Computer Science and Automation, Indian Institute of Science

B2B MARKETPLACES AND E-PROCUREMENT

Y. NARAHARIComputer Science and Automation

Indian Institute of ScienceBangalore - 560 [email protected]

http://www.csa.iisc.ernet.in

Y Narahari, Computer Science and Automation, Indian Institute of Science

OBJECTIVES OF THE TALK

To bring out and understand the "important" role of electronic marketplaces in supply chain management

To understand "critical" design and implementation issues of E-marketplaces

To understand the issues in E-procurement

Y Narahari, Computer Science and Automation, Indian Institute of Science

OUTLINE OF THE TALK

Introduction How do they add value? Design Issues E-Procurement

Y Narahari, Computer Science and Automation, Indian Institute of Science

ELECTRONIC MARKETS

E-marketplaces are emerging to serve each point of every industry's supply chain

E-markets are highly collaborative E-Business models that organize complex business processes between multiple participants into a virtual commerce community

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-MARKETPLACES :VALUE CREATION

efficient transactional processes new business relationships new business models new businesses

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-MARKETPLACES: CATEGORIES

Horizontal Vertical Private (sell side, buy side) Public

Y Narahari, Computer Science and Automation, Indian Institute of Science

EMERGENCE OF E-MARKETS

Alliance of IBM - i2 - Ariba Alliance of GM - Ford - Chrysler Alliance of mySAP- Commerce One - Oracle chemdex, plasticsnet, e-steel, paperexchange,

metalsite, capacityweb, mro, bandx, logisticsweb, etc.

In India: Indiamarkets.com, eBizchem.com, Autoexchanges

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-MARKETPLACES: A TAXONOMY

Operating Manufg

Systematic sourcing

MRO HUBS CATALOG HUBS

Spot sourcing YIELD MANAGERS

EXCHANGES

What is Bought

Ho

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t is

bo

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ht

Y Narahari, Computer Science and Automation, Indian Institute of Science

BENEFITS TO BUSINESSES

Extend the presence and reach of a company Facilitate doing business with anyone, anytime,

anywhere Aggregation of content and facilitation of workflow lead

to significant reduction in transaction costs Cycle times are reduced and deliveries are quicker Improves relationship with trading partners market efficiencies

Better inventory management Better visibility leading to predictability

Y Narahari, Computer Science and Automation, Indian Institute of Science

BENEFITS TO BUYERS

Aggregation of multiple suppliers Direct access to suppliers and through

dynamic pricing Location and tracking of new suppliers Provides more negotiating power Leads to quick response buyers

Y Narahari, Computer Science and Automation, Indian Institute of Science

BENEFITS TO SUPPLIERS

Provides reach to vast, untapped global markets

True value of products can be realized through aggregation and participation of buyers

Enables to support JIT practices Leads to quick response suppliers

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-MARKETS: DESIGN ISSUES

NEGOTIATIONS Distributed Negotiations Integrative Negotiations Auctions

DESIGN OF USER INTERFACES

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-MARKETS: DESIGN ISSUES

ALGORITHMS Buyer Aggregation Supplier Aggregation Demand Aggregation Buyer-Seller Matching Dynamic Pricing Multi-Attribute Auctions Combinatorial Auctions

Y Narahari, Computer Science and Automation, Indian Institute of Science

EXAMPLE OF A MARKET ALGORITHM

3 BUYERS and 4 SUPPLIERS Buyer X : (50 A, 10 B) Buyer Y : (20 B, 30 C) Buyer Z : (40 A, 20 C, 10 D)

BUNDLING Bundle 1: (90 A) Negotiated contract Bundle 2: (30 B, 50 C) Sealed bid auction Bundle 3: (10 D) Dynamic auction

Y Narahari, Computer Science and Automation, Indian Institute of Science

EXAMPLE OF A MARKET ALGORITHM

Sealed Bid Combinatorial Auction Supplier P : (10 B, 10 C, p) Supplier Q : (30 B, q) Supplier R : (50 C, r) Supplier S : (20 B, 50 C, s)

An optimization algorithm decides the best bids and handpicks the optimal subset of bids, based on cost, delivery times, etc.

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-MARKETS: DESIGN ISSUES

TECHNOLOGYAuthentication and securityElectronic paymentSoftware architectureDistributed objectsAgents and mobilityScalability Interoperability

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-MARKETS: DESIGN ISSUES

INTEGRATION with existing best practices with existing business processes with existing catalogs with ERP software with the backend with other E-markets

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-MARKETS: SOFTWARE ARCHITECTURE

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-PROCUREMENT

All activities involved in obtaining materials and services and managing their inflow into an organization toward the enduser

Basic steps: Information Negotiation Settlement

Y Narahari, Computer Science and Automation, Indian Institute of Science

EMERGENCE OF E-PROCUREMENT

Electronic catalogs Internet search engines Web-EDI On-line auctions and bidding Advances in E-commerce

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-PROCUREMENT PROCESS

Y Narahari, Computer Science and Automation, Indian Institute of Science

BEST PRACTICE E-PROCUREMENT SYSTEMS

Dell online (Ariba Buyer) Cisco Enron corporation (mySAP and Commerce

One) Lockheed Martin (mySAP) GE capital (i2 Buyside solution) Defense Logistics Agency Lawrence Livermore Laboratories

Y Narahari, Computer Science and Automation, Indian Institute of Science

E-PROCUREMENT: VALUE ADDITIONS

Demand aggregation Bundling and supplier aggregation Optimal vendor selection Innovative dynamic auctions Multi-attribute decision support

Y Narahari, Computer Science and Automation, Indian Institute of Science

CONCLUSIONS

E-markets are key to faster and more efficient trade

E-markets have a positive influence all through the supply chain

There are challenging technical and technological issues in setting up and operating E-markets

E-procurement has emerged in a big way