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
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Disadvantages of Using a VAN
Cost
enrollment fee, a monthly maintenance fee, transaction fee
Different companies use different VAN’s
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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
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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
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Electronic Commerce, Seventh Annual Edition 17
Industry Consortia-Sponsored Marketplaces
Created in 2000 by a consortium of DaimlerChrysler, Ford, and General Motors
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Industry Consortia-Sponsored Marketplaces
Marriott, Hyatt, and three other major hotel chains formed a consortium to create Avendra
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