E-Supply Chains, Collaborative

Commerce and Corporate Portals

Author: Hafez Shurrab

II

Contents

1. Introduction _______________________________________________ 1

2. Theoretical Framework ______________________________________ 1

2.1. Supply Chain and e-Supply Chain __________________________ 1 2.2. The Transition from Supply Chain to Full Connectivity _________ 2 2.3. Collaborative Commerce _________________________________ 5 2.4. Corporate Portals _______________________________________ 6

1. Discussion ________________________________________________ 8

2. Conclusion _______________________________________________ 9

References ___________________________________________________ 10

Figures

Figure 2.2.1 Network Formation __________________________________ 2

Figure 2.2.2 Value Chain Constellation _____________________________ 3

Figure 2.2.3 Full Network Connectivity _____________________________ 4

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1. Introduction

It could be simple to the mind imagining any flow of materials as they are

simply passed through different suppliers along the supply chain. For

instance, if we look at a simple example of a water bottle, one may

straightforwardly say it consists of clean water, a plastic bottle, a plastic cap,

and a label. Therefore, one of the most common consumers’ misconceptions

is that they estimate the total cost of a product based on the estimations of the

individual components, ignoring the fact that no single material could be

passed through from a supplier to supplier without negotiations on prices,

being packaged for extra costs, transportation, and manning all the way.

A simple product as a bottle of water may include many suppliers and 3PL

providers to enable the delivery of that few number of components required

to produce a water bottle. There would be intensive communication among

all parties from suppliers to retailers in order to avoid stockouts and other

relevant potential issues that may negatively influence customer satisfaction.

Imagine now that a product is rather complex and the contributing set of

suppliers is a broad one. It would be definitely problematic and rather

challenging to use the traditional way of communication that might be

followed for producing a water bottle to coordinate the delivery of the

required components for that complex product. There is no doubt that supply

chain management (SCM) emerged as a responsive business strategy to the

challenges stem from such circumstances to better handle that kind of

challenges (Anderson et al., 2007). After the internet revolution and the rise

of wide range of web-based software applications dedicated to the

collaboration between business partners, e-business and e-commerce became

widespread terms, and the concept of e-supply chains followed the attempts

of integrating them to many businesses (Poirier & Bauer, 2000). To raise the

level of this discussion, I dedicate to take a deeper look and discuss the role

of e-supply chains, collaborative commerce and corporate portals in today’s

business.

2. Theoretical Framework

2.1. Supply Chain and e-Supply Chain

Manthou et al. (2003) define SCM as the systems, leadership, and methods

dedicated to improve the performance of organizational processes and

activities including logistics, customer satisfaction, product and service

design, order management, inventory management, purchasing, sales

forecasting, distribution, and manufacturing or production. Manthou et al.

(2003) also include the optimizing efforts required to both create and deliver

goods, services, and information from suppliers to consumers as another

primary responsibility lies in the domain of SCM. Therefore, SCM is an

effective tool to gain a competitive position within the market. Nevertheless,

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to activate the competitiveness effectiveness of SCM, it is imperative for

constituent members of any supply chain network to collaborate and dedicate

their efforts beyond the internal focus of costs cutting and profit margin

improvement within the boundaries of a single company (Zhang, 2008).

The collaboration between partners within a supply chain network is

recently managed electrically. Supply chains that are mostly managed

electronically are called electronic supply chains (Manthou et al., 2003).

According to Zhang (2007), e-SCM is a concept refers to the integration of

information flow activities required for a supply chain network into a highly

dynamic e-business environment. Zhang (2007) also adds that e-SCM

represents the e-linkages that build a supply chain network and connect

different parties and constituent members within it.

2.2. The Transition from Supply Chain to Network to Constellation and

Full Connectivity

Manthou et al. (2003) showed examples of conceptual transitions of a supply

chain network from a basic form to a full connectivity mode where e-

commerce is fully integrated and enhanced with a supply chain network.

Manthou et al. (2003) proposed three main positions for a focal firm starting

from nucleus firm position (“get going” phase), passing by nucleus firm and

allies position (“get real” phase), and ending with nucleus allies position

(“get business” phase) where full e-business connectivity is enabled.

Figure 2.2.1 shows the movement when a focal firm starts to change its

focus from internal to external environment opening opportunities for

discussions, partial sharing, and trustworthy partners. However, in this phase,

the network is still not formed, but the idea of sharing mutual benefits is

brought up and made visible for all participants.

Figure 2.2.1 Network Formation - source: (Manthou et al., 2003)

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A practical example for one of the functions shown in figure 2.2.1 is in the

buying sector. The representatives in charge of purchasing responsibility can

for example meet and discuss how the supply chain constituents can work

together to reach win-win situation not by focusing on getting lower prices,

but by cutting order entry and payment costs or even developing non-price

features and benefits and viewing e-business integrating alternatives that

might be worth investing in.

Following the same strategy with making, delivery, inventory, technology,

and selling sectors would facilitate outlining the emerging supply chain

network. The information connections and linkages between partners should

be enhanced by leading-edge technology and e-commerce features if the

integration effort is to be successful. The connections should be combined

together using a reliable communication system that can create, use, and

disseminate the vital data that enables the timely satisfaction of consumer

demands (Manthou et al., 2003).

It is common that a leading firm intersects with several value chain

constellations. Figure 2.2.2 shows the next level in which a network has been

already prepared to integrate e-commerce by supporting different constituent

members in adapting themselves and applying the required preliminary

improvements. It is also expected in this phase for the nucleus firm and its

allies to raise the level of trust that may enable establishing the first version

of their electronic network. The collective supply chain system enables

knowing the cost of each process step by using activity-based costing

information, which makes the supply chain closer to be a value chain. Being

so, the main room for optimization is in the value to be delivered and the cost

of its delivery (Manthou et al., 2003).

Figure 2.2.2 Value Chain Constellation - source: (Manthou et al., 2003)

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By recalling the same example of the buying team for this phase, it is

expected that the volume of purchases will be aggregated in key categories to

be used by all companies in the network. Moreover, the joint savings will be

generated since transaction costs are reduced and buying on a larger scale is

accomplished. The means to do consortia buying will be developed, and the

procurement activities will become web-based (Manthou et al., 2003).

The final phase of full network connectivity goes beyond saving money to

collectively find new revenues by using the advantages of e-commerce

capability across a full network. The full connectivity means that e-business

models are in use and have been jointly developed by network allies, and

there is a connected, compatible and reliable application of relevant

technology and full connectivity of information flow and different

information systems from beginning to end of the supply chain.

Figure 2.2.3 Full Network Connectivity - source: (Manthou et al., 2003)

2.2.1. Activities and Infrastructure of E-SCM

According to Manthou et al. (2003), the key activities and processes of e-

SCM include supply chain replenishment, e-procurement, supply chain

monitoring and control using RFID, inventory management using wireless

devices, collaborative planning, collaborative design and product

development, e-logistics, use of B2B exchanges and supply webs.

Supply chain replenishment (SCR) is mostly found in production and

distribution processes. The replenishment information is used to synchronize

supply with demand along SCs so that inventories are reduced, stockouts are

avoided, and the replenishment velocity is increased. Furthermore, real-time

supply and demand information enables adopting assemble-to-order and even

make-to-order manufacturing strategies. SCR is naturally sympathetic to

web-enabled customer orders (McLaren et al., 2002).

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Processes such as the purchase of both direct and indirect materials,

contracting, requisitioning, sourcing, ordering, and payment are supported by

web-based technology to form what is commonly known as e-procurement.

There are many other functions e-procurement supports including online

catalogues, contracts, shipping notices, and purchase orders. The benefits

from that could be for instance eliminating components redesign and

fostering decision making in product development by using online catalogues

and viewing available parts and their attributes. Moreover, the possibility of

purchasing orders online accelerates the ordering process, and the shipping

notifications sent in advance streamline delivery (McLaren et al., 2002).

Monitoring and controlling items along the supply chain as well as

inventory management can be done using real-time information RFID tags

and wireless devices offer, respectively. One of the main advantages of RFID

technology is tracking the essential information about items as they move

through supply chains. The type of information to be tracked and utilized by

RFID is per se a huge competitive advantage to the company. It could track

where for instance some delays throughout the supply chain occur and as

such need to be improved (Zhu et al., 2012).

Collaborative planning is one of the effective solutions to reduce bullwhip

effect. Buyers and sellers collaboratively develop shared and regularly online

updatable forecasts and supply plans along the supply chain. Likewise,

collaborative design and product development embed the same logic. The

reusability and secure sharing of product design and development techniques

as well as engineering drawings across multiple companies reduce new

product time to market (McLaren et al., 2002).

Logistics activities including material acquisition, warehousing, and

transportation are for e-logistics supported by web-based technologies.

Routing optimization together with inventory-tracking information are

enabled. For instance, internet-based freight auctions open rooms for costs

cutting. Moreover, companies can use virtual logistics services 3PL providers

offer by integrating and optimizing distribution resources (McLaren et al.,

2002).

As for the infrastructure, the main elements and tools of e-supply chains

may include electronic data interchange (EDI), extranets, intranets, corporate

portals, workflow systems and tools, groupware and other collaborative tools,

and identification and tracking tools (McLaren et al., 2002).

2.3. Collaborative Commerce

Collaborative Commerce a collaboration and interaction between employees,

business partners and/or customers of companies that comes together to form

a trading community and sharing of information online. The sharing of

information encourages integration of business (Gunasekaran & Ngai, 2004).

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Connecting companies, trading partners, agents, suppliers, distributors etc.

into a powerful competitive force to create a network to reduce costs, shorten

business processes and improve the workflow. This is crucial to be

competitive and to enhance company growth (Gunasekaran & Ngai, 2004).

The ideal goal by Collaboration Commerce is to maximize the

effectiveness a business gain with information technology, to enhance

customer service, increase the agility which is crucial to be competitive and

also to maximize the benefits of e-supply chain management (McLaren et al.,

2004).

The key to improve the communications between trading partners is

integration, automation and collaboration regardless of what level of

information technology being used at their disposal. Integration is to make

sure that the different applications, internal and external, can function with

each other. Automation and collaboration enable the different partners to

communicate with each other and to trade information (Chen et al. 2007).

Communications between different parts in Collaboration enable a unified

planning, forecast and replenishment-method, (CPFR). CPFR is useful when

suppliers and retailers work together with unified planning to optimize of

materials in a supply chain (Umeda & Zhang, 2006).

2.4. Corporate Portals

Corporate Portals are a gateway from which you can enter through a standard

web browser to access corporate information and to engage in

communications and collaboration (Grey part in document, reference?). A

part from public portals, corporate portals is designed to hide the information

from the public and to only share it with those granted access for example

employees in a company (Elsner & Krämer 2013).

One of the most useable functions of a corporate portal are the support the

portal provides in corporate decisions and collaborative process. With the

corporate portals it will be easier for manager to gain access to more hands-

on information and this will help in the decision making process into taking

the right decisions (Dias 2001).

The development of corporate portals is moving from a simple knowledge

database from which employees can withdraw information to a more

interactive portal of applications. Though to the success of the corporate

portal employees have to be informed of the current functionalities or the

applications that should improve productivity will not be affective (White

2003). And to increase productivity each employee task should be evaluated

and identified to design the portal and applications to relevant employee

(Elsner and Krämer 2010).

“Enterprise information portals are applications that enable

companies to unlock internally and externally stored information,

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and provide users a single gateway to personalized information

needed to make informed business decisions.” (Shilakes & Tylman

1998)

There are two different types of classifying a portal, first one is relative to

the environment, public or corporate, the other are related to their functions,

decision support and/or collaborative processing (Dias 2001).

Decision support is a system consisting with information to help managers

and analysts to make decisions. Collaborative processing portals is similar to

groupware and automation systems and deal with information from the

supply chain stored in the company applications but also information that is

produced by those in the company or in the supply chain (Dias 2001).

Although Dias’s (2001) work might be outdated by the rapid development

of e-supply chain management, collaborative commerce and corporate portals

and much has happened since 2001, Dias (2001) could see benefits such as

structured access to enterprise information, a place for trading information

between different parts and functions within a company or a collaboration.

And with high connectivity and ease of use that a web interface presents,

corporate information can be accessed anywhere. But this will only come in

handy if the information if well-structured and organized, otherwise a user

might feel overwhelmed, or as Firestone (2000) call it – information

overload.

Dias (2001) also claims that corporate portals has a probability to end up

in high return of investment because portal applications are easier to

maintain, faster to deploy and cheaper than customized systems.

2.4.1. Groupware

Groupware is software that encourages people in collaboration by giving

them tools for engaging in communications to achieve a common goal and

for the involving members to share information. A groupware could contain

functions as folder sharing, conference, screen sharing, organizing etc. This

gives a company or e-supply chain a range of methods to engage in

communication and information sharing and is key for virtual teamwork and

is a good component in a workflow (Dustdar, 2005).

There are different kinds of groupware such as; communication-oriented

groupware, enterprise groupware and workspace groupware.

Communication-oriented groupware, which the work activities and

interaction mostly focuses on communication. An example of

communication-oriented groupware is e-mail. Enterprise groupware is more

focused on wide messaging and discussion databases. Workspace groupware

allows employees to upload and download files, by this able to organize their

own work (Dustdar 2005).

Accordingly to Dustdar (2005) groupware does not involve a a proper

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organizational model presenting the task, their members, members roles etc.

and therefore the system treats every message equally without any

consideration of underlying business processes which is vital for an effective

collaboration.

2.4.2. Workflow

A workflow is a series of steps in a process that makes an organizations work

procedures. The activity or step could be either a human or machine

performed. By planning the different steps a company can improve its

effectiveness when all is planned out where for example one task is done it is

passed on to the next person/machine for processing. This is called workflow

management (Dustdar 2005).

There are some benefits to achieve by implementing workflow

management. Management get a good overlook of the work process

performing the different series of tasks so they get improved control of the

business process. The improved control should also consist in better work

quality and efficiency when done right. The mangers job should also become

a lot easier this way (Dusdar 2005).

1. DiscussionIntroducing e-collaboration is extremely difficult. Involving loyal suppliers to

a particular focal firm is not easy-going due to increasing globalization and

offshoring. For instance, it is common that 3PL providers, especially the

global ones, intersect with many competitors. Besides, suppliers and partners

contribute differently. Thus, not all of them are critical to a supply chain.

Therefore, it is recommended to configure and customize the data to be

shared through e-collaboration based on the need for sharing. Using

analytical tools to segment suppliers is recommended. The relationship with

suppliers with rather high impact should be thoroughly studied since they are

more likely to be greatly connected with the focal firm in terms of e-

collaboration. If such suppliers are also connected with other competitors, a

high risk may threaten the competitive advantage of the focal firm. Therefore,

selecting the right partners to share trust and start e-collaboration with is

fairly important since proceeding to high level of e-collaboration may require

moving away from win-win situations for some suppliers. Strategic suppliers

should have less potentiality to lose win-win in high level of e-collaboration.

Furthermore, it is recommended that the focal firm is in charge of the portal

and intranet contents since the whole supply chain revolves around the value

of their core competence. Otherwise, the contribution of each constituent

member of a supply chain should be evaluated and the responsibility should

be given to the member delivers the highest value.

Since most of today’s supply chains are globally connected, lack of

logistics infrastructure might be a challenge for one or more constituent

members along the supply chain, which adds higher risk to the delivery of the

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right goods on time. Moreover, bullwhip effect is a very common risk in

supply chains and e-collaboration can hugely contribute in resolving and

reducing that effect. There might be many other concerns related to quality

problems with materials, order taking, order fulfilment, electronic payments

… etc. Such concerns should be dealt with as potential risks and planned for.

A key element in Collaborative Commerce, C-Commerce, is Business

Process Management (BPM) for complex solutions where companies and

business partners can engage in communication and sharing of information.

2. Conclusion

E-SCM is the integration of information flow activities required for a supply

chain network into a highly dynamic e-business environment. The integration

of e-business applications may however vary from between supply chain

networks ranging from network formation to full functional connectivity that

can increase the productivity and cut the overall cost.

E-supply chain success relies heavily on collaboration between partners

and defining the required degree of sharing information. Besides, the mutual

trust should match the level of integration.

For a having effective collaborative commerce, the implementation of it is

a key. If the different parts of the collaboration do not get it right, it might

have implications in the e-supply chain management systems. As a result of

bad implementation the company/companies might lose market shares to

competitors.

A corporate portal could be a good alternative to consider to engage in the

communication needed in a collaboration, as a fast, easy and relatively cheap

as Dias (2001) demonstrates it could be a first step into developing a strong

and competitive e-supply chain with all parts of the collaboration. The

applications could even be customized to suppliers and salespeople to

maximize the performance and the benefits of both collaboration and the

portal.

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