INTRODUCTION TO ELECTRONIC COMMERCE,

(COMM1Q)

WEEK 10

Supply Chain Management

CLASSIFICATION BY TRANSACTION

• B2B - business to business• B2C - business to consumer• C2C - consumer to consumer• C2B - consumer to business• Non-business EC• Intra-business EC

B2B• Uses Extranets and the Internet.

Extranet = two or more Intranets connected via Internet, Only enough information made available to allow business,

Often security attained using virtual private n/works (VPN).

• Cost of deploying networks has dramatically fallen - by-product of Internet.

• Transaction costs have been cut dramatically - a driving force behind B2B adoption.

Key to B2B is SCM

Supply Chain Management (SCM)

• ‘Supply Chain’ means the network of alliances that a company forms with suppliers and distributors to source manufacture and deliver goods and services.

• Alliances can be just as effective as a single company.

• SCM= ‘the co-ordination of materials, information and financial flows between all the partners in the alliance’.

B2B Requires SCMSupply Chain Management (SCM)

• Companies that exploit their supply chain properly gain the competitive advantage.

• Competition becomes competing supply chains - - pressure on prices, quality, responsiveness, - ever increasing customer expectations.

THE VALUE SYSTEM

Accounting Invoicing etc.

FIRMSUPPLIERS DISTRIBUTORS/CUSTOMERS

Administration & Personnel.

Sales & Marketing

Customer Relations

Stock control

PRODUCTS & SERVICES

Distribution

MONEY & INFORMATIONOperations

SUPPLIERS FIRM DISTRIBUTORS/ CUSTOMERS

INTRANETEXTRANET EXTRANET

INTERNETINTERNET

THE VALUE SYSTEM

SUCCESS DEPENDS UPON

Scalability

Interoperability

Configurability

Compatibility

Manageability

Availability

Reliability

Distributability

Serviceability

Stabiltiy

(Turban 2000)

Examples of B2B

• Supplier Orientated Marketplace– www.cisco.com

• Buyer Orientated Marketplace– http://www.shoppoint.co.dk

• Intermediary Orientated Marketplace– http://www.procurenet.com

B2C

• E-tailing:

Manufacturer Wholesaler Distributor Retailer Customer

Manufacturer Customer

Manufacturer CustomerElectronic Intermediary

Direct Marketing – Dis-intermediation

Marketing with e-intermediaries – Re-intermediation

Key to B2C is CRM

1.  Only 10% of companies can support e-commerce!

2.  Sell to existing customers rather than new customers

3.  Dissatisfied customers = BAD NEWS.

4.  Minimal increases in customer retention = maximal company profits

5.  The odds of selling a product or service to an existing customer are three times as high as to a new customer

6.  Customers will do business with you again if you deal with complaints swiftly

(Sybase Customer Asset Management Solutions: http://www.sybase.com)

Examples of B2C

• Electronic stores– www.amazon.com– www.dell.com

• Electronic Malls– http://www.evvmall.com/– http://www.mall.com/