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Electronic Commerce, Seventh Annual Edition 1
Purchasing, Logistics, and Support
Purchasing activities
Include identifying vendors, evaluating vendors, selecting specific products, and placing orders
Supply chain
Part of an industry value chain that precedes a particular strategic business unit
Electronic Commerce, Seventh Annual Edition 2
E-procurement or e-sourcing
Use of Internet technologies in procurement and sourcing activities
Electronic Commerce, Seventh Annual Edition 3
Direct materials Replenishment purchasing Indirect materials
Electronic Commerce, Seventh Annual Edition 4
Logistics Activities
Objective of logistics right goods in the right quantities in the right
place at the right time include managing:
Inbound Outbound
Electronic Commerce, Seventh Annual Edition 5
Electronic Data Interchange
EDI is the computer-to-computer transfer of business information between two businesses
Usually specific agreed formats Commonly transaction data
Electronic Commerce, Seventh Annual Edition 6
Emergence of Broader EDI Standards (transaction sets)
Late 2000 ASC X12 organization and UN/EDIFACT
develop one common set of international standards
Electronic Commerce, Seventh Annual Edition 7
Value-Added Networks
Direct connection EDI
own on-site EDI translator computer
connected directly to each other dedicated leased lines
Electronic Commerce, Seventh Annual Edition 8
Value-Added Networks
Indirect connection EDI
Use Value Added Networks (VAN) as electronic middleman
Electronic Commerce, Seventh Annual Edition 9
Advantages of Using a VAN
Users need to support only the VAN’s one communications protocol
The VAN:
Records message activity in an audit log
Can provide translation between different transaction sets used by trading partners
Can perform automatic compliance checking
Electronic Commerce, Seventh Annual Edition 10
Disadvantages of Using a VAN
Cost
enrollment fee, a monthly maintenance fee, transaction fee
Different companies use different VAN’s
Electronic Commerce, Seventh Annual Edition 11
EDI on the Internet
Initial roadblocks security inability to provide audit logs and third-
party verification of message transmission and delivery
Nonrepudiation Ability to establish that a particular
transaction actually occurred
Electronic Commerce, Seventh Annual Edition 12
Electronic Commerce, Seventh Annual Edition 13
Electronic Marketplaces and Portals
Vertical portals (vortals)
Offer a doorway (or portal) to the Internet for industry members
Vertically integrated
Electronic Commerce, Seventh Annual Edition 14
IndustryPortals
Electronic Commerce, Seventh Annual Edition 15
Private Company Marketplaces
E-procurement software
purchasing function through Web interface
Private company marketplace
provides auctions, request for quote postings, and other features
Electronic Commerce, Seventh Annual Edition 16
Electronic Commerce, Seventh Annual Edition 17
Industry Consortia-Sponsored Marketplaces
Created in 2000 by a consortium of DaimlerChrysler, Ford, and General Motors
Electronic Commerce, Seventh Annual Edition 18
Industry Consortia-Sponsored Marketplaces
Marriott, Hyatt, and three other major hotel chains formed a consortium to create Avendra
Electronic Commerce, Seventh Annual Edition 19
