E-CommerceBusiness to Business

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E-Business Level 2

2013-2014

Try to be the Best

Elements of Lecture

B2B

B2B Models

Sell-Side

Buy-Side

Collaborative Commerce

Types of B2E E-Commerce

Buy-Side: One-from-Many, E-procurement

• A unique feature of B2B which is not found in B2C. it's the buy-side marketplace and its use for procurement.

 • Purchasing in organizations is done by

purchasing agents, also known as buyers.

• There are two types of purchasing: direct and indirect.

Buy-Side: One-from-Many, E-procurement

• Direct materials also called production materials, go directly to the manufacture or assembly of a product or the creation of a service.

 • The characteristics of direct materials are

Their use is scheduled, They are usually not self items, They are usually purchased in large volume And after negotiation and contracting.

Buy-Side: One-from-Many, E-procurement

• Indirect materials are usually used in maintenance, repair and operations activities and are known as MROs or nonproduction materials.

Procurement Management

• It refers to the coordination of all the activities pertaining to purchasing goods and services necessary to accomplish the mission of an enterprise.

• Approximately, 80 percent of an organization's purchased items, mostly MROs, constitute 20 percent of the total purchase value.

Procurement Management

Is Procurement Management efficient always?

Procurement Management

• A large portion of corporate buyers' time is spent on non-value-added activities such as data entry, correcting errors in paperwork, expediting delivery, or solving quality problems.

 • As a result, buyers don't have sufficient time

to pay their attention to properly deal with the purchasing high-value direct materials.

Procurement Management

• There are many other potential inefficiencies in procurement, and not only for MROs.

 • These range from delays to paying too much

for rush orders. The major reason is that the traditional process is inefficient.

• And to correct the situation companies reengineer their procurement systems using innovative management.

Goals for Procurement Reengineering

• Reengineering of procurement has been attempted for decades, usually by using some information technologies.

• But the real opportunity lies in the use of e-procurement.

Goals for Procurement Reengineering

• By automating and streamlining the laborious routines of the purchasing function, purchasing professionals can focus on more strategic purchases, achieving the following goals:

Goals for Procurement Reengineering

• Increasing purchasing agent productivity.• Increasing the productivity of purchasing agents. • Lowering purchase prices through product

standardization.• Improving information flow and management• Minimizing the purchases made from noncontract

vendors• Improving the payment process.

Goals for Procurement Reengineering

• Establishing efficient, collaborative supplier relations.

• Ensuring delivery on time, every time.• Reducing the skill requirements and training

needs of purchasing agents.• Reducing the number of suppliers.• Streamlining the purchasing process, making it

simple and fast• Streamlining invoice reconciliation and dispute

resolution

Goals for Procurement Reengineering

• E-procurement is relatively easy to implement. An immediate benefit that e-procurement can bring about is in the purchase of MRO items. But, improvement can be made for direct materials as well.

• All existing manual processes of requisition creation, requests for quotation, invitation to tender, purchase order issuance, receiving goods, and payment can be streamlined and automated.

Goals for Procurement Reengineering

• To implement such automated support, the people involved in procurement need to use not only internal workflow, group-ware, and the internal marketplace but also must collaborate with the suppliers web sites.

• And here the intranets and extranets are recommended.

Group Purchasing and Bartering

• Group purchasing: The aggregation of orders from several buyers into volume purchases so that better prices can be negotiated.

Group Purchasing and Bartering

Group Purchasing and Bartering

• Bartering Exchange: An intermediary that links parties in a barter; a company submits its surplus to the exchange and receives points of credit, which can be used to buy the items that the company needs from other exchange participants

Collaborative Commerce

• A web based system is used for communication, design, planning, information, sharing and information discovery.

 • These activities are usually conducted

between and among supply chain partners.

• There are many varieties of c-commerce ranging from joint design to forecasting.

Collaborative Commerce

• Collaboration can be done both between and with organizations.

 • For example, a collaborative platform can

help in communication and collaboration between headquarters and subsidiaries of franchisers and franchisees by providing e-mail, message boards and chat rooms, and online corporate data access around the globe no mater what the time zone.

Any Question