Internet Supply Chain Management –
              ECT 581 Winter 2003

   Lecturer: Ellis E. Confer
   E-mail: econfer@cs...
Session Number: 1
     Session Date: January 7, 2002
     Session Objectives:
        Introductions & Administrative It...
ECT 581 Course Objectives
     To examine the links between business
      strategy, information system technology
      ...
Course Description
  ECT 581 - Extranet Systems

     This course examines e-business
      strategies, architectures, te...
Prerequisites & Text and Supplementary Reading
Materials


        Prerequisites: ECT555, Design and Strategies for Intern...
Grading Procedure
  The student‟s final grade will be based on a weighted average of the exam score, the project report
  ...
Procedures and policies:
   1.     No makeup exams will be given.
   2.     Homework assignments must be turned in on time...
ECT 581 Tentative Schedule of Discussions
January 7    Course Administration & Overview

                  Supply Chain Ma...
ECT 581 Tentative Schedule of Discussions
(continued)
 January 28    ******** INITIAL EXAM *********
               ** 1st...
ECT 581 Tentative Schedule of Discussions
(continued)
 February 25   Security Considerations


 March 4       Security Con...
Instructor background
  Professional experience:
     20+ years experience as consultant and entrepreneur
     Stints wi...
Logistics

   Class time – Tuesday evenings from 5:45 pm to 9:00 pm.
   Class location – Loop Campus (TBD)
   Rest periods...
Class Roster Info Sheets
 Send a note to the instructor‟s email address
   including the following:
   Your Name
   Your M...
E-commerce & B2B Marketplaces: Origins and
               Evolution
                               Discussion Agenda

    ...
E-commerce & B2B Marketplaces: Origins and Evolution


Discussion Objectives


  • Establish a discussion context regardin...
Mission Critical (Important) Terminology:

   E-Commerce
   Business-to-Consumer (B2C)
   Business-to-Business (B2B)
   Su...
E-commerce & B2B Marketplaces: Origins and Evolution

Discussion Baseline: Terminology Defined

• Electronic Commerce or E...
E-commerce & B2B Marketplaces: Origins and Evolution

Supply Chain Context of E-commerce
                                 ...
E-commerce & B2B Marketplaces: Origins and Evolution
   Evolutionary Perspectives & Industry Comparisons


  There is no n...
An Interesting Quote



"Let us not forget that the value of this great system does not lie primarily in
its extent or eve...
Perspective on the Internet, Ecommerce and
Earlier Technology Innovations

   Internet is a change agent in global commerc...
E-commerce & B2B Marketplaces: Origins and Evolution

Parallels between the evolution of telegraph, radio, and the Interne...
E-commerce & B2B Marketplaces: Origins and Evolution

Brief History of E-commerce and B2B marketplaces.
• E-commerce and B...
E-commerce & B2B Marketplaces: Origins and Evolution

Enter the Internet, B2B Marketplaces & Internet-based EDI!

 • B2B e...
Distinguishing B2B & B2C

   B2B E-commerce is the exchange of products, services, or information
   between businesses ra...
Electronic Data Interchange (EDI) defined:


    EDI – Inter-company, computer-to-computer
    communication of data which...
Distinguishing Intranet & Extranet

    Intranet defined
      An intranet is a corporate LAN or WAN that functions with ...
E-commerce & B2B Marketplaces: Origins and Evolution

The BIG Picture: B2B Current Market Perspective

   • B2B E-commerce...
E-commerce & B2B Marketplaces: Origins and Evolution

The BIG Picture: Market Projections

•B2B worldwide revenue estimate...
E-commerce & B2B Marketplaces: Origins and Evolution
Emergence of online exchanges - three forces shaping the B2B marketpl...
B2B Projections Remain High Despite Obstacles
by CyberAtlas Staff

 (1/9/01) Electronic business-to-business (B2B) sales w...
B-to-B Commerce Will Reach $5.4 Trillion in 2006
                          (in billions)
                        $6,000   ...
Greatest Increases in B-to-B Commerce from Computer/Telecom,
Aerospace
                        70%
                       ...
Ariba was First B2B Firm
 to Profitability!




Wall Street Journal
Friday, January 12, 2001
E-commerce & B2B Marketplaces: Origins and Evolution

So what should we expect?

• Currently experiencing the „pause that ...
Key Technology
   Key Ecommerce technology architecture components include the
   following:
     web browsers

     app...
Remaining Mission Critical Terms

    Business Process Re-engineering (BPR) - fundamental rethinking and
    radical redes...
B2B Supplier Marketplace Model Characteristics
  •Supplier offers an e-store to promote sales.
  •Customers are both consu...
B2B Buyer Marketplace Model Characteristics
   •Buying company opens a bidding site to enhance its purchasing
   procedure...
B2B Intermediary-oriented Marketplace Model Characteristics
    • Third-party for buyers and sellers opens an intermediary...
B2B Critical Success Factors
 • Plenty of buyers and sellers – you need both to make a market.
 • Liquidity – value of a m...
Technology Vendors & Service Providers

               B2B Sub-sectors              Representative Firms

    CRM Commerce...
B2B Business Cycle: Primary B2B Business Processes
& Key Applications


 B2B Business Processes            Key Application...
Evolving B2B Trends: XML
XML (Extensible Markup Language)
• enables sharing of interactive documents across the Internet.
...
Supply Chain Considerations

    What is the ‘Supply Chain’?
        All organizations and processes related to products ...
Supply Chain Considerations
                                                  B-to-B                                      ...
SCM Objectives

  Optimize the sharing of information across organizational
  boundaries
  Focus on value of time, efficie...
Supply Chain Performance Metrics
  Products & services offered
  Sales
  Market share
  Cost
  Quality
  Delivery
  Cycle ...
New Imperatives of Supply Chain Management
  Build flexibility.
  Plan and measure accurately.
  Develop logistically sepa...
Supply Chain Example – Apparel Industry
                     Customer

                      Retailer

   Information   Ap...
Supply Chain Example – Health Care Products

                       Customers

                  Hospitals/Drug Stores


 ...
SCM Success Factor: Effective and Timely Information Management


    Successful SCM often times tied to
        coherent...
Information and Technology Applications for SCM
  Internet-based Ecommerce
  EDI
  Intranet/Extranet
  Traditional EDI
  B...
Major SCM Service Providers
  Deloitte Consulting
  Keane Consulting
  Price Waterhouse Coopers
  IBM Global Services & KP...
Next Session Highlights:
  Review of Supply Chain Concepts
  Reading Assignment covering first 3 sessions:
    Introducti...
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Session 1 Notes

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Session 1 Notes

  1. 1. Internet Supply Chain Management – ECT 581 Winter 2003  Lecturer: Ellis E. Confer  E-mail: econfer@cs.depaul.edu  Office Hours: Tuesday 4:15 – 5:45 pm
  2. 2. Session Number: 1  Session Date: January 7, 2002  Session Objectives:  Introductions & Administrative Items  Course Overview  Initial Course Topics  Assignments  Session Topics: Introduction to Supply Chain Management & B2B Systems  Course Administration & Overview  Historical Perspective on Internet & Ecommerce Evolution  B2B Ecommerce Overview  Supply Chain Management Overview
  3. 3. ECT 581 Course Objectives  To examine the links between business strategy, information system technology architecture, and technical platform implementation as it relates to Business-to-Business E-Commerce.
  4. 4. Course Description ECT 581 - Extranet Systems  This course examines e-business strategies, architectures, technologies, approaches, and infrastructure requirements in the context of supply chain management (SCM). The focus is on the design, development, and implementation of e-business systems that facilitate the collaboration of an enterprise with its buyers and suppliers. Topics include SCM, global logistics management, messaging-based collaboration framework, extensible markup language (XML), extensible style sheet language (XSL), document type definition (DTD), and message queuing software. This course also examines the integration of e-business systems and back-end systems such as enterprise resource planning (ERP) systems, Web services, virtual private networks (VPN), and e-business security. Students will implement a collaborative extranet system component in team projects. Prerequisite: ECT 555 and programming knowledge with Java and Visual Basic.
  5. 5. Prerequisites & Text and Supplementary Reading Materials Prerequisites: ECT555, Design and Strategies for Internet Commerce, is a required prerequisite. D5420, Foundations of Distributed Systems, is recommended. Programming proficiency is required. It is very important that you have a good understanding of programming using Visual Basic and Java. Experience with VBScript is recommended.  1. Building B2B Applications with XML by Michael Fitzgerald published by John Wiley & Sons, Inc., Wiley Computer Publishing 2001, ISBN: 0-471-40401-2.  2. Introduction to Supply Chain Management, by Robert B. Handfield and Ernest L. Nichols, Jr., Prentice Hall, 1999, ISBN: 0-13-621616-1  3. Other books will be referred to and handouts and web-links will be given as appropriate.
  6. 6. Grading Procedure The student‟s final grade will be based on a weighted average of the exam score, the project report & deliverables, project presentation, and class participation. Weights are as follows: Weight HW Assignments 15% Project 20% Initial Exam 20% Midterm Exam 20% Final Exam 20% Class Participation 5% Grades will be determined as follows: 90% - 100% A 87% - 89% A- 80% - 86% B 77% - 79% B- 70% - 76% C 67% - 69% C- 60% - 66% D 0 % - 60% F
  7. 7. Procedures and policies: 1. No makeup exams will be given. 2. Homework assignments must be turned in on time.* 3. Late homework assignments will not be accepted. *Turning in a hard copy version of an assignment is the most reliable way to ensure that assignments are received on time. When transmitting a soft copy of an assignment via email, make sure to give yourself adequate time for the mail to be delivered by no later than the day when the assignment is due. Email delivery problems do occur, please ask for a receipt of delivery.
  8. 8. ECT 581 Tentative Schedule of Discussions January 7 Course Administration & Overview Supply Chain Management Overview B2B Ecommerce Overview Business Trends: Opportunities & Challenges January 14 Supply-Chain Management & ERP Supply Chain & Value Chain Considerations (continued) Enterprise Requirements Planning Architectural Considerations January 21 B2B Systems Architecture & Key Technology Architectural Considerations (continued) Design & Development Processes Key Technology XML Middleware VPNs
  9. 9. ECT 581 Tentative Schedule of Discussions (continued) January 28 ******** INITIAL EXAM ********* ** 1st Homework Assignment Due ** XML XML as a Content Development Tool & Internet-based EDI Syntax & Document Structure February 4 XML (continued) ******** Project Abstracts Due ******* February 11 XML (continued) Middleware February 18 ******** MIDTERM EXAM ********* Middleware (continued)
  10. 10. ECT 581 Tentative Schedule of Discussions (continued) February 25 Security Considerations March 4 Security Considerations (continued) Future Trends: Emerging Techniques and Technology Web services, etc.. March 11 ******** Project Final Reports Due ******* Project Presentations Future Trends: Emerging Techniques and Technology (continued) March 18 ******** FINAL EXAM *********
  11. 11. Instructor background Professional experience:  20+ years experience as consultant and entrepreneur  Stints with Accenture, IBM, Sybase, Tandem, CNA Financial  Presently senior executive with consultancy & software development firms Educational training  BSEE from University of Michigan  Concentration in digital design and solid state physics  MBA from Indiana University  Concentration in finance & operations research One Favorite site: www.allmusic.com (one of many) Leisure interests/hobbies: gardening, music, fine dining, motorcycling, reading (non-fiction)
  12. 12. Logistics Class time – Tuesday evenings from 5:45 pm to 9:00 pm. Class location – Loop Campus (TBD) Rest periods (two options to choose from)  Option 1: One thirty (30) minute break @ 7:30 pm  Option 2: Two fifteen (15) minute breaks @ 7:15 pm & 8:30 pm Office hours - Tuesday, 4:15 pm – 5:45 pm in room TBD Email address: econfer@cti.depaul.edu
  13. 13. Class Roster Info Sheets Send a note to the instructor‟s email address including the following: Your Name Your Major Profession (student or other) Favorite site (with url, if available) Favorite leisure interest or hobby (movies, music, dining, live entertainment, gardening, sport, etc.) Objectives for taking the course.
  14. 14. E-commerce & B2B Marketplaces: Origins and Evolution Discussion Agenda • Objectives • Discussion Baseline • Evolutionary Perspectives & Industry Comparisons • Brief History of Ecommerce & B2B Systems • The BIG Picture: B2B Market Perspective
  15. 15. E-commerce & B2B Marketplaces: Origins and Evolution Discussion Objectives • Establish a discussion context regarding Ecommerce & B2B marketplaces. • Discuss historical and market perspective for the evolution of Ecommerce & B2B marketplaces.
  16. 16. Mission Critical (Important) Terminology: E-Commerce Business-to-Consumer (B2C) Business-to-Business (B2B) Supply Chain Management Business Process Re-engineering (BPR) Electronic Data Interchange (EDI) Intranet Extranet Security Firewall Virtual Private Network
  17. 17. E-commerce & B2B Marketplaces: Origins and Evolution Discussion Baseline: Terminology Defined • Electronic Commerce or E-commerce - the conduct of a financial transaction by electronic means; more recently, the purchase of goods and services over the Internet‟s World Wide Web. Includes the following types: • Business-to-Business or B2B E-commerce - inter-organizational E- commerce • Business-to-Consumer or B2C E-commerce - electronic commercial interaction between the enterprise and the end consumer. • Business-to-Employee or B2E E-commerce- intra-organizational E- commerce. • Supply Chain - all organizations and processes related to products and services sourced by buying organizations, typically from raw materials through consumption.
  18. 18. E-commerce & B2B Marketplaces: Origins and Evolution Supply Chain Context of E-commerce B-to-B B-to-C Warehouse and Customer Product Supplier Transport Inventory Category Relationship Development Management Management Management Store Management Management Product Development E-Procurement Supply Chain Category Software Management Management Management • Product design • Invoice processing • Order • Goods-in • Product • Payment management scheduling development • RFI/RFP • Product tracking • New product • Catalog development • Vendor capacity • Capacity introduction • Vendor certification • Quality management • Planning for • Item management • Sample • Product availability • consolidation seasons and management • Production planning • Replenishment events • New product • Technical • Reverse logistics • Allocation introduction specifications • Second- and third- tier suppliers
  19. 19. E-commerce & B2B Marketplaces: Origins and Evolution Evolutionary Perspectives & Industry Comparisons There is no new thing under the sun Ecclesiastes, Chapter 1, Verse 9 He who forgets the past is condemned to repeat it. Jorge Santayana
  20. 20. An Interesting Quote "Let us not forget that the value of this great system does not lie primarily in its extent or even in its efficiency. Its worth depends on the use that is made of it.…….For the first time in human history we have available to us the ability to communicate simultaneously with millions of our fellowmen, to furnish entertainment, instruction, widening vision of national problems and national events. An obligation rests on us to see that it is devoted to real service and to develop the material that is transmitted into that which is really worthwhile." Who said this? Bill Gates? Newt Gingrich? Al Gore? Alvin Toffler?
  21. 21. Perspective on the Internet, Ecommerce and Earlier Technology Innovations Internet is a change agent in global commerce. There have been comparable periods of industrial change. Internet and Ecommerce evolution & expansion is similar when compared and contrasted with:  railroad,  telegraph,  telephone, and  radio. In all cases, early pioneers (practitioners, inventors, etc.) knew they were on to something.
  22. 22. E-commerce & B2B Marketplaces: Origins and Evolution Parallels between the evolution of telegraph, radio, and the Internet. • Each transmits intangible items (i.e., information). • Each shortened the time to transfer info. • Their utility (i.e., their ability to deliver products & services) is dependent on the efficacy and efficiency of their underlying network. • All had initial usability, training, & infrastructure problems. • All have or are experiencing the S-curve in lifecycle product development.
  23. 23. E-commerce & B2B Marketplaces: Origins and Evolution Brief History of E-commerce and B2B marketplaces. • E-commerce and B2B are not new concepts. • Current systems emanated more directly from Electronic Data Interchange (EDI). • EDI provides for the exchange transaction information over proprietary Value-Added Networks (VAN‟s). •EDI participants realized benefits such as: • reduction in process costs, and • enhanced profitability. • EDI participants also incurred significant expenditure in • EDI deployment costs • VAN charges. • EDI limited to a few very large & wealthy organizations.
  24. 24. E-commerce & B2B Marketplaces: Origins and Evolution Enter the Internet, B2B Marketplaces & Internet-based EDI! • B2B extranet system deployment on the rise. • Third-party B2B Market Makers are key movers in evolution of internet-based „EDI‟.
  25. 25. Distinguishing B2B & B2C B2B E-commerce is the exchange of products, services, or information between businesses rather than between businesses and consumers.  e-Business.  Suppliers and „Big C‟s‟ - transactions between businesses.  Focus on transaction efficiency. B2C E-commerce the retailing of goods and services directly to end consumers via the Internet.  Suppliers & „little C‟s – transactions between goods and service providers and end consumers.  Dis-intermediation.  (theoretically) lowers inventory and distributions costs.
  26. 26. Electronic Data Interchange (EDI) defined: EDI – Inter-company, computer-to-computer communication of data which permits the receiver to perform the function of a standard business transaction and is in a predefined standard format. „Old-school‟ B2B E-commerce. Enables electronic intra-company exchange of purchase orders and other transaction documents. EDI based on standards-based protocols.
  27. 27. Distinguishing Intranet & Extranet Intranet defined  An intranet is a corporate LAN or WAN that functions with Internet technologies behind the company‟s firewall. Extranet defined  An extranet is a network that links the intranets of business partners using a virtually private network on the Internet.  Designing extranets is difficult.  Complexities of security, performance, management and policy. Extranet and B2B are not synonymous. Extranets can apply to B2C as well.
  28. 28. E-commerce & B2B Marketplaces: Origins and Evolution The BIG Picture: B2B Current Market Perspective • B2B E-commerce participants include: • Sellers and Buyers. • Existing prominent, well-established firms that sell directly to business customers. • Emerging Market Makers – a new breed of intermediaries Market Makers further segmented as: • Vertical hubs – industry-specific focus. • Functional hubs – business process focus. • Catalog models – demand/supply aggregation. • Auction & exchange models – engaging in matching buyers & sellers. • Barter models – reciprocal value exchange.
  29. 29. E-commerce & B2B Marketplaces: Origins and Evolution The BIG Picture: Market Projections •B2B worldwide revenue estimated to grow from $282 billion in 1999 to $4.3 trillion by 2005. • United States will remain the largest region for B2B e-commerce, with purchases increasing at a compound annual growth rate of 68 percent from 2001 to 2005. • Overwhelming majority of revenue growth expected to be derived from direct seller sites. • Market maker subset will account for 15-20% of B2B e-Commerce, generating an estimated $400-500 billion by 2003. • Market cap for market makers estimated at revenue multiple of 2X-3X suggest B2B market maker capitalization of $560 billion to $13 trillion. Sources: International Data Corp., March 2002 Merrill Lynch B2B Market Maker Book, February 2000
  30. 30. E-commerce & B2B Marketplaces: Origins and Evolution Emergence of online exchanges - three forces shaping the B2B marketplace B2C (Business to Consumer) B2B (Business to Business) Industry-Centric B2B Market Opportunity: Exchanges $2.5 trillion by 2003 Market Makers • Aerospace (Boeing) Vertical • Automotive (GM/Ford) 2000 • ProduceOnline.com • Agricultural (Cargill) 1500 • Foodbuy.com • Chemical (DuPont) • Foods (GMA) 1000 Horizontal • Retailing (Sears/Carrefour, • MRO.com and WorldWide Retail) 500 • PurchasePro.com • Utilities 0 1999 2000 2001 2002 2003 Technology Providers and “Engines” Ariba Commerce One Oracle SAP i2 Manugistics
  31. 31. B2B Projections Remain High Despite Obstacles by CyberAtlas Staff (1/9/01) Electronic business-to-business (B2B) sales will reach more than $5.2 trillion in 2004 through several different channels, including Internet marketplaces, electronic data interchange (EDI), hybrid EDI/Internet electronic trading networks (ETNs), Internet company-to-company links, extranets, and private e-markets, according to Giga Information Group. Giga had forecast an estimated $3.3 trillion in B2B e-commerce sales for 2000, most through traditional EDI networks. “As business-to-business e-commerce matures, there will be no single „magic channel‟ that meets all companies‟ needs,” said Andrew Bartels, a Giga Information Group VP and research leader. “The B2B e-commerce market --which will account for approximately 38 percent of all B2B sales in 2004 --will get complicated because there will be a need for a variety of electronic interactions, each with its own set of strengths and weaknesses, particularly in the areas of reliability, security, customizability, and cost. Because the lines between traditional EDI and Internet channels are dissolving, companies now have the flexibility to use different e-channels for different customers or suppliers based on strategic business goals.”
  32. 32. B-to-B Commerce Will Reach $5.4 Trillion in 2006 (in billions) $6,000 36% 40% Percentage of Total Penetration 35% $5,000 Total B-to-B Commerce 29% $5,450 30% $4,000 25% 20% $4,111 $3,000 20% 12% $2,688 15% $2,000 7% 10% $1,000 4% $1,515 3% 5% $793 $343 $466 $0 0% 2000 2001 2002 2003 2004 2005 2006 Total B2B Goods- Billions Total Penetration Source: 2001 Jupiter Internet B-to-B Commerce Model, (US only)
  33. 33. Greatest Increases in B-to-B Commerce from Computer/Telecom, Aerospace 70% 60% 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 Computer and telecom 8% 8% 15% 30% 41% 52% 60% equipment Aerospace and defense 8% 11% 17% 26% 35% 45% 54% Motor vehicles and parts 7% 10% 16% 24% 33% 42% 50% Metals and mining 6% 6% 11% 21% 28% 36% 43% Chemicals 6% 7% 8% 12% 26% 33% 39% Source: 2001 Jupiter Internet B-to-B Commerce Model, (US only)
  34. 34. Ariba was First B2B Firm to Profitability! Wall Street Journal Friday, January 12, 2001
  35. 35. E-commerce & B2B Marketplaces: Origins and Evolution So what should we expect? • Currently experiencing the „pause that refreshes‟. • E-commerce will become mainstream and internalized by “old economy” firms. • B2B uptake will continue with improved economy, probably tied to supply chain management improvements. • Some signs that the „pause‟ may be coming to an end, particularly with respect to SCM. • A number of small technological, micro-improvements will impact the E- commerce and the internet over the short-term. • “Last-mile” infrastructure improvements will have significant impact on level of usage. • Security will be of paramount concern and will garner significant expenditure.
  36. 36. Key Technology Key Ecommerce technology architecture components include the following:  web browsers  application servers  secure file transfer servers  customer account management systems  remote administration tools  directory servers  authentication systems  commerce systems  distributed computing infrastructures and databases  messaging systems & middleware  firewalls and proxies  security scanners
  37. 37. Remaining Mission Critical Terms Business Process Re-engineering (BPR) - fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical performance measures such as cost, quality, service, speed. Security – the combination of technology and policies designed to protect sensitive business information and to prevent fraud. Firewall – a security screen placed between an organization‟s internal network and the external Internet. Virtual Private Network – a wide-area network (WAN) created to link a company with external users (including mobile users, field representatives, or strategic allies).
  38. 38. B2B Supplier Marketplace Model Characteristics •Supplier offers an e-store to promote sales. •Customers are both consumers and business buyers. •Popular type of initial e-marketplace. •Auctions are becoming popular; used to clear surplus inventories. ordered information.
  39. 39. B2B Buyer Marketplace Model Characteristics •Buying company opens a bidding site to enhance its purchasing procedure. •Model is unique to B2B; not found in B2C. •Online bidding can reduce the purchasing cost and cycle time.
  40. 40. B2B Intermediary-oriented Marketplace Model Characteristics • Third-party for buyers and sellers opens an intermediary e-store. • E-store may be used for consumers and business buyers. • Auction and bidding sites are gaining in popularity. • Example might include an assembly company acting as an intermediary between allied customers and suppliers.
  41. 41. B2B Critical Success Factors • Plenty of buyers and sellers – you need both to make a market. • Liquidity – value of a market make r is a multiple of the value of the transactions flowing through it; market makers (MM‟s) must be focused on generating industry-leading liquidity. • Fragmentation – MM‟s add most value in highly fragmented markets. • Inefficiency – MM‟s must add value to both sides of the trade. • Management with domain expertise – senior-level industry relationships and creditability facilitate industry „buy-in‟. • Early mover advantage – Ebay only had a year head start in the C2C auctions business, but that was enough. • Partnerships for distribution and logistics – UPS doesn‟t transport lumber, resin, or HCL acid. • Neutrality – few business opt to do business with their competitors or with subsidiaries of competitors; do not sacrifice liquidity to gain neutrality. • Public currency – with a billion dollar market cap, if you don‟t yet have a real business, then go and buy one; in the end, real value/dollars count.
  42. 42. Technology Vendors & Service Providers B2B Sub-sectors Representative Firms CRM Commerce/Customer Service Broadvision, Vignette, Silknet CRM Marketing/Email Kana Communications, e.piphany Horizontals Ariba, VerticalNet, Commerce One Verticals/Technology Calico Commerce, pcOrder Verticals/Healthcare Healtheon/WebMD, Claimsnet.com Verticals/Life Sciences Chemdex, SciQuest.com Verticals/Retail Retek Sales/Employment Services HotJobs.com, Headhunter.net Sales/Postage E-Stamp, Stamps.com Miscellaneous Sales Imagex.com, Finet.com, GetThere.com
  43. 43. B2B Business Cycle: Primary B2B Business Processes & Key Applications B2B Business Processes Key Applications • Information Transfer • Distribution Control • Data Sharing • Inventory Management • Ordering • Supplier Relationships • Payment • Payment Management • Customer Support & Service • Channel Management
  44. 44. Evolving B2B Trends: XML XML (Extensible Markup Language) • enables sharing of interactive documents across the Internet. • offers format for representing data, a schema for describing data, and means for extending HTML. • Key to transition from traditional EDI to Internet-based EDI. • Processes most affected have been order fulfillment, production, logistics, and inventory. • Electronics industry has taken the lead in XML use in the supply chain. • Toshiba, Solectron, Intel, Ingram Micro , American Express, Federal Express, and Cisco are key practitioners.
  45. 45. Supply Chain Considerations What is the ‘Supply Chain’?  All organizations and processes related to products and services sourced by Buying Organizations, typically from raw materials through consumption. What is ‘Supply Chain Management’?  Supply Chain Management (SCM) is the management of all activities along the supply chain; from suppliers to internal logistics within a company and to distribution to customers. Contrasted with the Value Chain  Value chain is a series of activities a company performs to achieve its goal by adding additional values as each activity proceeds to the next one.
  46. 46. Supply Chain Considerations B-to-B B-to-C Warehouse and Customer Product Supplier Transport Inventory Category Relationship Development Management Management Management Store Management Management Product Development E-Procurement Supply Chain Category Software Management Management Management • Product design • Invoice processing • Order • Goods-in • Product • Payment management scheduling development • RFI/RFP • Product tracking • New product • Catalog development • Vendor capacity • Capacity introduction • Vendor certification • Quality management • Planning for • Item management • Sample • Product availability • consolidation seasons and management • Production planning • Replenishment events • New product • Technical • Reverse logistics • Allocation introduction specifications • Second- and third- tier suppliers
  47. 47. SCM Objectives Optimize the sharing of information across organizational boundaries Focus on value of time, efficiency. Attempt to gain time-based competitive advantage. Potential linkage to greater customer satisfaction, increased sales, enhanced product quality, and profitability.
  48. 48. Supply Chain Performance Metrics Products & services offered Sales Market share Cost Quality Delivery Cycle times Assets utilized Responsiveness Customer service
  49. 49. New Imperatives of Supply Chain Management Build flexibility. Plan and measure accurately. Develop logistically separate operations where appropriate. Get lean by emphasizing simplicity and speed. Optimize timely information transfer. Mass-customize, treat customers unequally; segment and stratify. Operate globally. Practice virtuality and collaborative management. Exploit electronic commerce. Leverage people, Operationalize new product introductions and phaseouts.
  50. 50. Supply Chain Example – Apparel Industry Customer Retailer Information Apparel Manufacturer Product Textile Producer Yarn Maker
  51. 51. Supply Chain Example – Health Care Products Customers Hospitals/Drug Stores Information Distributors Product End Product Manufacturer Raw Material Supplier
  52. 52. SCM Success Factor: Effective and Timely Information Management Successful SCM often times tied to  coherent information technology strategy and appropriate architecture.  information systems that diffuse organizational boundaries. Supply chain links suppliers, distributors, buyers, assemblers, etc. as virtual organization Embraces concept of the Inter-organizational Information Systems (IOIS)  Systems that cross organizational boundaries.  Requires technology that enables electronic link between organizations.  Automates manual and paper-bound work.  Earliest forms of these systems were time-sharing services, online databases, EFT, EDI.
  53. 53. Information and Technology Applications for SCM Internet-based Ecommerce EDI Intranet/Extranet Traditional EDI Bar Coding and Scanning Data Warehouse Decision Support Systems
  54. 54. Major SCM Service Providers Deloitte Consulting Keane Consulting Price Waterhouse Coopers IBM Global Services & KPMG Cap Gemini Ernst & Young Accenture Computer Science Corporation
  55. 55. Next Session Highlights: Review of Supply Chain Concepts Reading Assignment covering first 3 sessions:  Introduction to Supply Chain Management; Handfield & Nichols; Chapters 1 – 5;  Building B2B Applications with XML; Fitzgerald; Chapters 1 Also begin review of Microsoft‟s MSMQ Review Guide (accessible through the class web site under the Reference Articles link)

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