B2B E-COMMERCE Spring 2011 e-commerce Implementation B2B concepts Business-to-Business e-commerce Computer-mediated transactions between businesses conducted using the Internet, extranets, or private networks. Key concerns: Security Transactional, but also information and strategy 1
Supply Chain Management Necessary logistical concern that can benefit from B2B application. Supply Chain Management process that involves Acquisition of materials from suppliers Movement of goods in our possession Packaging and moving end products to distributors and retailers Companies exist to put products or services in the end user s hands, not to move them around. Seek maximum efficiency. B2B Focus Types of products purchased: Direct Materials items used in production (paper for a book) Indirect Materials items not used in production (paper used by secretary to type memos) MROs (maintenance, repairs, and operations) Indirect materials specifically used in activities supporting production (grease for printing press) 2
Procurement Strategies Spot buying purchasing goods and services as needed (generally at market prices). Maverick buying Unplanned purchases of items needed quickly, often at non pre-negotiated higher prices Strategic sourcing pre-planned purchasing involving long-term contracts, usually based on negotiation. In both of above, B2B e-commerce can help both buyer and seller achieve success. How B2B technology can help purchasing Technology can help companies find or sell customized products lower search costs through automated tools lower costs of placing order and reduce paperwork schedule more timely purchase receipt reduce errors (less manual input, more automation) sell custom or varying products to customers at distinct prices get more productivity from purchasers (allow them to focus on what is important, rather than mundane paperwork) 3
Indirect Benefits of B2B Purchasing Technology can help companies build ongoing collaborative supplier relations use purchasing agents with less product expertise reduce supplier list to optimal number on-board new suppliers faster effectively monitor and regulate buying behavior. (Fraud and/or waste detection) B2B Transaction Types Sell-side (seller has advantage) One (or few) sellers to many buyers Generally sold through online catalogs (similar to storefront model) or auctions Buy-side (buyer has advantage) One buyer from many sellers Variety of techniques possible: reverse auctions, negotiations, group purchasing, or other methods 4
B2B Automation B2B technology allow us to introduce computer assistance into every facet of ordering. Purchase need triggered by automated inventory alert. System places order from established supplier or begins to search among various suppliers for best price/need match. Delivery logistics arranged as well as special requirements (packaging, etc.). Receiving scheduled. Importance of SCM Many operations would be unable to fulfill company goals without significant SCM automation. Effective SCM saves costs, making the company more competitive, and lowering prices for consumers. 5
Copyrights Various figures are from the class textbook Electronic Commerce 2010: A Managerial Perspective by Turban et al Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x, System z, System z10, System z9, z10, z9, iseries, pseries, xseries, zseries, eserver, z/vm, z/os, i5/os, S/390, OS/390, OS/400, AS/400, S/390 Parallel Enterprise Server, PowerVM, Power Architecture, POWER6+, POWER6, POWER5+, POWER5, POWER, OpenPower, PowerPC, BatchPipes, BladeCenter, System Storage, GPFS, HACMP, RETAIN, DB2 Connect, RACF, Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX, Intelligent Miner, WebSphere, Netfinity, Tivoli and Informix are trademarks or registered trademarks of IBM Corporation. Linux is the registered trademark of Linus Torvalds in the U.S. and other countries. Oracle is a registered trademark of Oracle Corporation. HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc. Presentation prepared by and copyright of Dr. Tony Pittarese, East Tennessee State University, Computer and Information Sciences Dept. (pittares@etsu.edu) Podcast lecture related to this presentation available via ETSU itunesu. JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in other countries. Business Objects is an SAP company. Other products mentioned in this presentation are trademarks of their respective owners. 6