E-Business

1. 1
E-BUSINESS
IN
SUPPLY CHAIN MANAGEMENT

2. 2
E - BUSINESS

3. 3
INFORMATIONS THAT CAN BE OBTAINED
FROM THE WEB-SITE OF THE SUPPLIERS - 1
• Access a world wide data base of new,
refurbished and pre-owned parts that spans
the entire portfolio of the supplier.
• Search by part number, machine serial
number, part type or key words.
• Compare prices, life and other features
side by side.
• Request a quote - 24 hours turnaround.
• Purchase parts.

4. 4
INFORMATIONS THAT CAN BE OBTAINED
FROM THE WEB-SITE OF THE SUPPLIERS - 2
Buyer can get optimization support for his
plant and machinery from the
supplier/machinery manufacturer through
e-business on Internet.

5. 5
PLAN FOR UP GRADATION OF MACHINE
FROM SUPPLIER’S OPTIMIZATION
PROGRAM - 1
• Access technical information on the unit
and general information about the
equipment fleet.
• Benchmark unit’s performance against
similar equipment around the world.
• View nearly all improvement packages for
the equipment.

6. 6
PLAN FOR UP GRADATION OF MACHINE
FROM SUPPLIER’S OPTIMIZATION
PROGRAM - 2
• Plot how various packages will improve
the output and production rate.
• Review a calculated payback based on the
unit’s operating conditions and changing
market economics.
• Request a budgetary or firm priced quote
right on-line.
• Purchase the requested products and
service on-line.

7. 7
DISPOSAL OF SURPLUS PARTS
• Supplier can list buyer’s surplus parts on his
website for no charge.
• The buyer can sell his excess inventory to others
through the supplier’s world wide network of
customers at a price as determined by the
buyer.
• The supplier knowing the requirements of his
customers helps the buyer in selling his
inventory.
• Once a customer is identified, the seller will sell
the items in confidence and will handle all
logistics.

8. 8
E-PROCUREMENT
• E-procurement is a process of supply
chain integration.
• Buyer can procure materials from a
supplier (s) chosen by him on the Internet
or through Industrial Procurement Provider
(IPP).

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AREAS OF BENEFITS
FROM
E-PROCUREMENT
Access to supplier’s
resources
Effective market
reach

10. 10
Traditional
‘Bid & Buying’
Relationship
Strategic Sourcing
E-PROCUREMENT
Global
National
Local
Process
Integration
Inventory /
Capacity
Allocation
Technical
Support
Customer
Service
Efficient Market Reach
Access
to
Supplier
Resources
E-PROCUREMENT BENEFITS

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BENEFITS OF
E-PROCUREMENTS
• Improved supplier leverage.
• Lower costs of goods and services.
• Improved customer service levels.
• Improved information for supply chain
management.
• Demand planning based on facts.

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BENEFITS TO BUYERS FROM
E-PROCUREMENT - 1
• Lower transaction cost.
• Better performance of transaction.
 Leveraging of prices.
 Better quality of data
 Less management efforts.
 Reduces cycle (transaction cycle &
source cycle) time.

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BENEFITS TO BUYERS FROM
E-PROCUREMENT - 2
• Lower inventory.
• Facilitates supplier selection.
• Better choice of suppliers.
• Improved process efficiency by:
– Provides a complete electronic solution.
– Minimizes manual intervention and errors.
• Better purchase control.
• Pushes authorized purchasing to the desk
top.

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BENEFITS TO SUPPLIERS FROM
E-PROCUREMENT
• Higher revenues.
• Better order management.
• Faster time to pay.
• Lower inventories.
• Lower service costs.
• Better understanding of client’s needs.

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PURCHASE OF PROPRIETARY
ITEMS
Steps after entering log-in ID and password:
• Search
• Evaluate
• Request a quote
• Place order

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PURCHASE OF ITEMS AVAILABLE FROM
MANY SOURCES OF SUPPLY - 1
• The buyer has to reach to the website of
number of suppliers say 4 to 6 suppliers
• Find out the prices of the items of all those
suppliers required by him.
• He can thus find out the lowest prices
instantly.

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PURCHASE OF ITEMS AVAILABLE FROM
MANY SOURCES OF SUPPLY - 2
• Besides the prices, he can see the stock
level of each item and can decide if order
is to be placed on one supplier for his
requirements or on more than one
suppliers.
• Having made a choice, he can order for
the items on the website itself and also
make payment on the website through
credit card/purchase card.

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ON-LINE PAYMENT
PROCESSING - 1
• First, the website requests an
authorization from the customer’s credit
card account to make sure that:
– The credit card is valid
– There is enough balance in the credit card
account for the purchases made.
• The customer’s bank provides an
authorization number back to the website
and the order concludes.

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ON-LINE PAYMENT
PROCESSING - 2
• Second, upon delivering the goods, the
merchant / website informs the bank that
has the account number.
• The bank deposits funds to the merchant’s
account by debiting the customer’s
account for the purchases made.
• The customer’s bank takes out the
required fees and the transaction is
completed.

20. 20
TERMS USED IN ON-LINE
PAYMENT PROCESS
• Digital or electronic cash
• Digital money
• Electronic checks
• Electronic wallets
• Extranet
• Micro-payments.

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DIGITAL OR ELECTRONIC CASH
- 1
• Digital or electronic cash, also called e-cash, refer to any
of several schemes that allow a person to pay for goods
or services by transmitting a number from one computer
to another.
• The numbers, just like those on a dollar bill, are issued
by a bank and represent specified sums of real money.
• Digital money is a term for the various e-cash and
electronic payment schemes on the Internet.
• Electronic checking systems take money from user’s
checking accounts to pay utility and phone bills.

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DIGITAL OR ELECTRONIC CASH
- 2
• Electronic wallet is a payment scheme that
stores the credit card numbers on hard drive in
an encrypted form.
• Purchases then be made at websites that
support that particular electronic wallet.
• At the time of going to a particular online store,
one clicks a Pay button to initiate a credit card
payment via a secure transaction enabled by the
electronic wallet company’s server.
• The major borrower vendors have struck deals
to include electronic wallet technology in their
products.

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IS E-COMMERCE SAFE? - 1
• Most vendors and analysts consider that
the cyberspace transactions are less
dangerous than in physical world.
• Though some of the credit card frauds are
reported as card numbers are handled by
retails sales employees.
• E-commerce systems remove temptation
by encrypting the numbers on a
company’s servers.

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IS E-COMMERCE SAFE? - 2
• For merchant, e-commerce is actually safer than
opening a store that could be looted, burned, or
flooded.
• Transactions done with Netscape Navigator and
Microsoft Internet Explorer can be encrypted
using Secure Sockets Layer (SSL), a protocol
that creates a secure connection to the severer,
protecting the information as it travels over the
Internet.
• SSL uses public key encryption, one of the
strongest encryption methods around.

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IS E-COMMERCE SAFE? - 3
• Browser makers and credit card companies are
promoting an additional security standard called
Secure Electronic Transactions (SET).
• SET encodes the credit card numbers that sit on
vendor’s servers so that only banks and credit
card companies can operate the system to
enable the system to guarantee 100 percent
protection for your credit card.

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CONSTRAINTS IN THE GROWTH
OF E-PROCUREMENT - 1
• Internet facilities are not yet
available/obtained by many organizations.
Small suppliers find it difficult to invest in
computer as they do not know how to use
computers.
• Quality of Internet Services have yet to
come to efficient level. Due to excessive
traffic, it takes time to get connected to the
Internet.

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CONSTRAINTS IN THE GROWTH
OF E-PROCUREMENT - 2
• People are not familiar with the use of E-
commerce in purchasing.
• The present purchasing process is not
suited to e-procurement and require
system's modification. The persons
working on the Internet does not have
authority to decide on-line.

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CONSTRAINTS IN THE GROWTH
OF E-PROCUREMENT - 3
• Until and unless, spares are identified
exactly all over the world, the E-
procurement would not be possible.
International directories for writing the
specification of a given item in exactly the
same manner by various suppliers all over
the world is very essential.

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CONSTRAINTS IN THE GROWTH
OF E-PROCUREMENT - 4
• Items, which are to be manufactured
based on drawings, or on customer’s
special requirements are not suitable for
on-line E-procurement.
• In cases of large volume purchases or
purchases of high value, often
negotiations are carried out for the prices
as well as other terms and conditions,
which are more suitable for off-line
transactions.

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CONSTRAINTS IN THE GROWTH
OF E-PROCUREMENT - 5
• Many of the vendors are not willing to put
their information on the website due to
secrecy.
• There is fear of safety of the money
transactions through electronic process.
Some of the scandalous payments have
discouraged many suppliers in settlement
of money transaction.
• The confidence level in the whole exercise
is yet to be developed among suppliers and
customers.