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E commerce and operations management ppt @ bec doms

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E commerce and operations management ppt @ bec doms

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E commerce and operations management ppt @ bec doms

  1. 1. E-Commerce and Operations Management
  2. 2. Outline <ul><li>THE INTERNET </li></ul><ul><li>ELECTRONIC COMMERCE </li></ul><ul><ul><li>E-commerce Definitions </li></ul></ul><ul><li>ECONOMICS OF E-COMMERCE </li></ul><ul><li>PRODUCT DESIGN </li></ul><ul><li>E-PROCUREMENT </li></ul><ul><ul><li>Online Catalogues </li></ul></ul><ul><ul><li>RFQs and Bid Packaging </li></ul></ul><ul><ul><li>Internet Outsourcing </li></ul></ul><ul><ul><li>On-line Auctions </li></ul></ul>
  3. 3. Outline - Continued <ul><li>INVENTORY TRACKING </li></ul><ul><li>INVENTORY REDUCTION </li></ul><ul><ul><li>Warehousing for E-commerce </li></ul></ul><ul><ul><li>Just-in-Time Delivery for E-commerce </li></ul></ul><ul><li>SCHEDULING AND LOGISTICS IMPROVEMENT </li></ul><ul><ul><li>Coordinated Pickup and Delivery </li></ul></ul><ul><ul><li>Logistics Cost Reduction </li></ul></ul>
  4. 4. Learning Objectives <ul><li>When you complete this supplement, you should be able to : </li></ul><ul><li>Identify or Define : </li></ul><ul><ul><li>E-commerce </li></ul></ul><ul><ul><li>E-business </li></ul></ul><ul><ul><li>Online catalogues </li></ul></ul><ul><ul><li>Outsourcing </li></ul></ul><ul><ul><li>E-procurement </li></ul></ul><ul><li>Describe or Explain : </li></ul><ul><ul><li>How E-commerce is changing the supply chain </li></ul></ul><ul><ul><li>Online auctions </li></ul></ul><ul><ul><li>Pass-through warehouses </li></ul></ul>
  5. 5. E-Commerce <ul><li>The use of computer networks, primarily the internet, to buy and sell products, services, and information. </li></ul>
  6. 6. E-Business <ul><li>“… all about cycle time, speed, globalization, enhanced productivity, reaching new customers and sharing knowledge across institutions for competitive advantage.” </li></ul>Louis Gerstner, Chairman, IBM
  7. 7. E-Commerce Definitions <ul><li>Business-to business (B2B) Both sides of the transaction are businesses, non-profit organizations, or governments. </li></ul><ul><li>Business-to-consumer (B2C) E-commerce transactions where customers are individual consumers </li></ul><ul><li>Consumer-to-consumer (C2C) Consumers sell directly to each other. </li></ul><ul><li>Consumer-to-business (C2B) Individuals sell services or goods to businesses </li></ul>
  8. 8. Types of E-Commerce Transactions Business Consumer Business B2B GM/Ford/Daimler’s Covisint exchange B2C Amazon, Dell, Net Grocer.com Consumer C2B Priceline, Travelocity C2C Ebay
  9. 9. Types of Information Offered by Business-to-Business Applications <ul><li>Product - drawings, specifications, video or simulation demonstrations, prices </li></ul><ul><li>Production Processes - capacities, commitments, product plans </li></ul><ul><li>Transportation - carriers, lead times, costs </li></ul><ul><li>Inventory - inventory tracking, levels, costs, and location </li></ul>
  10. 10. Types of Information Offered by Business-to-Business Applications - Continued <ul><li>Suppliers - product catalogue, quality history, lead times, terms, and conditions </li></ul><ul><li>Supply Chain Alliances - key contact, partners’ roles and responsibilities, and schedules </li></ul><ul><li>Supply Chain Process and Performance - process descriptions, performance measures such as quality and delivery </li></ul>
  11. 11. Types of Information Offered by Business-to-Business Applications - Continued <ul><li>Sales and Marketing - point-of-sale (POS) data entry, promotions, pricing, discounts </li></ul><ul><li>Customer - sales history and forecasts </li></ul>
  12. 12. Security in the E-Commerce Environment <ul><li>Serious issue! </li></ul><ul><ul><li>Multiple deprivation of service attacks on e-commerce web sites 2/6 - 2/11, 2000; also, the attack of October 21, 2002, which flooded all 13 of the root servers of the Internet Domain Name System (DNS) (on main internet servers) </li></ul></ul><ul><li>Security of data, proprietary business information </li></ul><ul><li>Impact on the volume of sales and on the bottom line. </li></ul>
  13. 13. Benefits of E-commerce <ul><li>Improved, lower cost information </li></ul><ul><li>Lower entry costs </li></ul><ul><li>Available 24/7, virtually anywhere in the world </li></ul><ul><li>Availability expands markets for both buyers and sellers </li></ul><ul><li>Decreases the cost of paper-based information </li></ul><ul><li>Reduces the cost of communication </li></ul><ul><li>Provides richer communication than traditional means </li></ul><ul><li>Fast delivery of digitized products </li></ul><ul><li>Increased flexibility of location </li></ul>
  14. 14. Limitations of E-commerce <ul><li>Lack of system security, reliability and standards </li></ul><ul><li>Lack of privacy </li></ul><ul><li>Insufficient bandwidth </li></ul><ul><li>Integrating e-commerce software with existing software is still a challenge </li></ul><ul><li>Lack of trust in (1) unknowns on the other end of the transaction, (2) integrity of the transaction itself, and(3) electronic money that is only bits and bytes </li></ul>
  15. 15. Impact on Product Design <ul><li>Shorter life cycles require faster product development and lead to time-based competition </li></ul><ul><li>Greater use of shared knowledge and collaboration - decreased development costs </li></ul><ul><li>More data sharing with suppliers and strategic partners </li></ul>
  16. 16. E-Procurement <ul><li>Purchasing or order release communicated over the internet or via approved online vendor catalogues </li></ul>
  17. 17. Online Catalogues <ul><li>Information about products made available in electronic form via the Internet. </li></ul><ul><ul><li>Provided by vendors </li></ul></ul><ul><ul><li>Developed by buyers </li></ul></ul><ul><ul><li>Provided by intermediaries </li></ul></ul><ul><li>Often incorporate voice and video </li></ul>
  18. 18. Internet Trading Exchanges <ul><li>Health care products: set up by Johnson & Johnson, G.E. Medical Systems, Baxter International, Abbott Laboratories, and Medtronic Inc.; called the Global Health Care Exchange (ghx.com) </li></ul><ul><li>Defense and aerospace products: created by Boeing, Raytheon, Lockheed-Martin, and Britain’s BAE Systems; called the Aerospace and Defense Industry Trading Exchange (exostar.com) </li></ul><ul><li>Food, beverage, consumer products: set up by 49 leading food and beverage firms; called Transora (transora.com) </li></ul><ul><li>Retail goods: setup by Sears and France’s Carrefour; called Global Net Xchange, for retailers (gnx) </li></ul>
  19. 19. Internet Trading Exchanges - Continued <ul><li>Steel and metal products: such as New View Technologies (exchange.e-steel.com); and Metal-Site (metalsite.com) </li></ul><ul><li>Construction Industry: set up by Bechtel, Flour, and G.E. Power Systems (citadm.com) is one of 5 construction industry exchanges </li></ul><ul><li>Hotels: created by Marriott and Hyatt, and later joined by Fairmont, Six Continents, and Club Corp, Called Aventra (aventra.com) – buys for 2,800 hotels </li></ul>
  20. 20. Traditional Medical Supply Chain Manual processes Hospital Group purchasing organization for small, independent hospitals Distributor Supplier
  21. 21. On-Line Medical Supply Chain On-line Global Health Care Automated web-based processes Hospital Group purchasing organization for small, independent hospitals Distributor Supplier
  22. 22. E-Commerce and Requests for Quotes (RFQs) <ul><li>Extensive databases of supplier information, and ability to rapidly transfer specifications to vendors reduces time and costs </li></ul>
  23. 23. Online Auctions <ul><li>Useful for disposing of excess raw material, and discontinued and excess inventory </li></ul><ul><li>Online auctions lower entry barriers and increase the potential number of customers </li></ul>
  24. 24. <ul><li>Significant savings (10%) </li></ul><ul><li>Requires new skills and staffing in procurement area </li></ul>E-Procurement
  25. 25. Inventory Tracking <ul><li>Mass customization requires knowledge of location of all goods </li></ul><ul><li>Requires data collection, barcode technology, RF and electronic communications to track inventory in transit, on the shop floor, and in the warehouse </li></ul><ul><li>Customers can learn what is happening with their order </li></ul>
  26. 26. Warehousing for E-Commerce <ul><li>E-commerce warehouse is less a warehouse than a “pass through facility.” </li></ul>
  27. 27. FedEx and Dell Computer <ul><li>FedEx operates warehouses that pick, pack, test, and assemble products, then handle delivery and even customs clearance </li></ul><ul><li>FedEx’s “Virtual Order”integrates different companies web catalogues and customer orders for Dell; and then fulfills orders and delivers them through its fleet of trucks and planes. </li></ul>
  28. 28. E-Commerce and JIT <ul><li>E-commerce coordinates the supplier’s inventory system with the service capabilities of the delivery firm. </li></ul>
  29. 29. Scheduling and Logistics Improvements <ul><li>Coordinated pickup and delivery </li></ul><ul><ul><li>Fed Ex merges orders in transit </li></ul></ul><ul><li>Logistics cost reduction </li></ul><ul><ul><li>Greater capacity utilization </li></ul></ul>

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