E-Business and the Internet- Enabled Supply Chain
The advent of the Internet, XML, and online mechanisms have provided
solutions to some of the problems of EDI. The low cost of Internet systems has
spurred many compa-nies to look at the technology as a means to lower the bar
of entry into dynamic supply chain trading for small- and medium-sized
companies. The net effect is to change the lin-ear, somewhat-rigid supply chain
into a flexible, Internet-based web of trading partners. In an e-business
system, the center of operations is an informational hub that serves as a
central point where multiple organizations can interact to pursue supply chain
interac-tions. Transactional information is received, processed, and then
forwarded to other nodes in the supply chain web.
Before we can talk about these solutions, we should first define what we
mean by e-busi-ness. The basic
definition of e-business is the marriage of traditional supply chain
man-agement techniques with Internet and Web technologies. E-business
applications make extensive use of Internet technologies throughout all nodes
in a supply chain operation. However, e-business is not a monolithic block of
technology. In fact, it is comprised of three major components:
E-commerce
E-procurement
E-collaboration
The Internet has changed all the rules, from servicing customers to
licensing and installing applications.
E-Commerce
E-Commerce is not a concept that was invented with the Web. Rather, it
has been around as long as there have been electronic means for exchanging
commercial transactions. Electronic Data Interchange (EDI) has been around
since the late 1960s and has been in use to exchange supply, shipping, and
purchase information. However, in the context in which we are using the term
here, e-commerce is just a piece of
the overall e-business puzzle. It encapsulates the actual electronic
transactions that take place within an organi-zation without touching on
relating processes that must occur around the transaction. Typically,
e-commerce relates to individual transactions and not overall processes that
are more general in nature.
The definition of e-commerce has been somewhat of a moving target, and
at one point it encapsulated all forms of electronic business and commerce.
However, as the term e-business emerged, e-commerce as a term was relegated to
the point-of-sale and direct transactions
that occur in an overall e-business environment. A typical e-commerce sce-nario
is a customer placing an order for a product, which results in a series of
transac-tions that occur to fill the product order and ship the product to the
end-user destination. Therefore, e-commerce encapsulates the following
concepts:
Executing transaction requests
and orders by customers
Tying customer orders to business
processes within an organization
Order tracking
Order error tracking and
management
Logging and auditing of commerce
data
The e in e-commerce obviously
stands for electronic, which
necessarily means that commerce is transacted over networks and through
computer and digital systems. The term e-commerce
also applies to all intercompany and intracompany functions, including finance,
sales, marketing, and manufacturing. E-Commerce can therefore cover
transac-tions that occur via the Web, e-mail, EDI, file transfer, fax,
teleconferencing, or interac-tion with a remote computer, and it can cover all
forms of electronic business, including transferring electronic funds, using
smart cards and digital cash, and doing business over digital networks.
The need for an organization to fill customer service and support
requirements is also handled by e-commerce. Servicing customers by means of
help desks, self-guiding sup-port centers, knowledge databases, and interactive
technical support with live agents is a key component of any e-commerce system.
Companies that aim to directly serve their customers should also aim to satisfy
their customer-support needs through these same systems.
E-Procurement
Whereas e-commerce usually refers to point transactions and purchases by
individuals or organizations, e-procurement
refers to processes by which a manufacturer obtains prod-ucts from suppliers
for its daily operations. By necessity, e-procurement transactions are enormous
in quantity and value and therefore require a greater level of process control,
workflow, and documentation. Typical procurement solutions cover all steps of
the pro-curement process, ranging from supply order to acquisition and payment.
Due to its enormous volume and value, e-procurement is a sweet spot for
many online B2B systems. E-Procurement has also been a target for aggregations
of buyers and sell-ers—known as a marketplace—to
achieve great economies of scale. These marketplaces allow industries to make
large-scale purchasing and selling decisions across all partici-pants in a
given supply chain. Instead of working solely with local and large parts
deal-ers, manufacturers and suppliers potentially can access a competitive,
global market through electronically enabled marketplace e-procurement systems.
E-Collaboration
The final aspect of e-business systems is the ability to share
information among supply chain participants in a process known as e-collaboration. E-Collaboration enables
infor-mation sharing, collaborative planning, and collaborative product
development. These systems store qualitative and quantitative information
regarding supply chain processes and serve as a means to share critical supply
and process information with other partici-pants in a supply chain. These systems
allow purchase orders, sales orders, invoices, checks, and other business
documents to be shared within a well-defined community access area.
As mentioned earlier, a key area of e-collaboration is collaborative
planning, which assists in group decision making in a cost-effective manner by
considering different participants in the supply chain. Collaborative planning
shares sales forecasts, production quotas, and replenishment plans that allow
all parts of the extended organization to jointly reduce inventory costs and
raise customer service levels. This collaborative decision-making process
therefore leverages all available knowledge to make intelligent decisions on
behalf of the whole chain.
E-collaboration also enables new product development by squeezing
product delivery cycles and increasing development efficiency. By providing a
common community for information exchange, these solutions enable real-time
communication among engineers, product developers, and customer service
representatives to provide feedback on the cre-ation of new products. This
process also allows users to make quick decisions on changes to suppliers and
manufacturers.
Related Topics
Privacy Policy, Terms and Conditions, DMCA Policy and Compliant
Copyright © 2018-2023 BrainKart.com; All Rights Reserved. Developed by Therithal info, Chennai.