EBusiness and the Supply Chain

1
E-Business and the Supply Chain

• The Role of E- Business in the Supply Chain
• Impact on Performance
• Firm and Industrial Examples and Comparisons
• Internet Exchanges (E-Hubs)
• Setting Up E-Business
• Summary

2
ROLE OF THE SUPPLY CHAIN

• Assistance of the Supply Chain in Supporting
  Channel Functions
• Information and Promotion
• Negotiation
• Order Placement and Tracking
• Filling and Delivering Orders
• Administering Payments

3
IMPACT

• Revenue Impact
• Direct sales
• 24 hours access
• Information Aggregation
• Targeting and Customization
• Speeding Time to Market
• Flexible Pricing, and Market Segmentation
• Efficient fund transfer

4
Cost Impacts

• Reduced Handling in a Shorter supply chain
• Postponement of Product Differentiation
• Lower cost with Downloadable Product
• Lower Facility and and Processing Costs
• Decreasing Inventory Costs through Centralization
• Improving coordination

5
Effect on Cost of Functional Categories

• Inventory Cost (Decline)
• Facility Cost (Decline)
• Transportation Cost (Increase)
• Information (High fixed cost, lower marginal
  cost.)
• These are broad generalizations

6
Examples

• Dell (PC)
• Amazon (Books, etc.)
• Peapod (Supermarket)
• Granger (MRO-Maintenance, Repair and Operations
  Supplies )

7
Internet Exchanges and Auctions (E-Hubs)

• Internet Exchange
• Internet Auctions
• Effect on Channel Efficiency

8
Setting Up E-Business in Practice

• Integration with Current Click and Mortar Network
• Pricing should reflect Cost
• Optimize for Customized Small Deliveries
  (Packages)
• Design Efficient Return Policy
• Easy Tracking of Order Status
• Summary