chapter 1 - mr. mohamed zaki · web viewdescribe success factors of e-supply chain management....

MofEC

Slides Group # 1 Overview of E-Commerce1. Define B2B.

Business-to-business e-commerce refers to transactions between businesses conducted electronically over the Internet, extranets, intranets, or private networks.

2. Discuss the following: spot buying versus strategic sourcing, direct materials versus indirect materials, and vertical markets versus horizontal markets.

Spot buying is the purchase of goods and services as they are needed, usually at normal market prices. In contrast, strategic sourcing is the purchase of goods and services involving long-term contracts that are usually based on private negotiations. Direct materials are the materials that are used in the creation of a product whereas indirect materials are used to support that production. Vertical markets are concentrated in a specific industry whereas horizontal markets concentrate on a product or service that is used across several industries.

3. What are company-centric marketplaces? Are they public or private?

Company-centric marketplaces focus on a single company’s purchasing needs or selling needs and are generally private entities owned by that company.

4. Define B2B exchanges.

A B2B exchange is a many-to-many e-marketplace, usually owned and run by a third party, in which many buyers and sellers meet electronically to trade with each other.

5. Relate the supply chain to B2B transactions.

The use of business-to-business electronic commerce is generally a part of existing supply chains that are used to make them more efficient.

7. Summarize the benefits of B2B.

True or False

7) Creating brand awareness is an advantage of B2B social networking.Answer: TRUE

Copyright © 2010 Pearson Education, Inc., Publishing as Prentice Hall

Slides Group # 2 B2B E-Commerce

Section 5.2 Review Questions

1. List the types of sell-side B2B transaction models.

The major types of B2B sell-side transactions include selling from electronic catalogs, selling through forward auctions and one-to-one selling.

2. Distinguish between use and nonuse of intermediaries in B2B sell-side transactions.

In some cases, firms may use an intermediary to provide some or all of their sell-side transaction systems. When intermediaries are used, it is generally in the format of an electronic marketplace. The larger the firm, the more likely it is to use a private, and not a third-party intermediary system.

3. What are buy-side and sell-side transactions? How do they differ?

Buy-side transactions involve one buyer and many sellers whereas sell-side transactions involve one seller and many buyers.

5. Describe direct online B2B sales from catalogs.

B2B can use catalogs in much the same way that B2C merchants can. Merchants are able to list a variety of their products online for customers to select and purchase. Personalization/customization becomes more important in B2B sell-side transactions when firms are working with larger customers.

6. Discuss the benefits and limitations of direct B2B sales from catalogs.

There are several benefits to direct sales including: lower order processing costs, a faster ordering cycle, fewer errors, lower search costs for buyers/sellers, lower logistics costs, and customization options. The limitations to direct sales include attracting buyers, channel conflicts, the method of electronic indication, and the required scale to operate efficiently.

1. What are the advantages of using intermediaries in B2B sales?

It allows manufacturers to decrease the need for customer marketing and distribution. Customers can access several product lines in one area.

1. List the benefits of using B2B auctions for selling.

The four major benefits of using B2B auctions for selling include: revenue generation, cost savings, increased page views, and member acquisition/retention.

3. What are the major purposes of forward auctions, and how are they conducted?

These auctions are meant to sell unneeded inventory or other materials to recapture capital at higher prices. They can be conducted from the company’s site or through a third party.

3. Define e-procurement

E-procurement is the electronic acquisition of goods and services for a business.

3. What are the goals of e-procurement E-procurement attempts to achieve the following goals: increased productivity, lower purchase prices, improved information flow, improved payment processes, faster purchasing, and reduced processing costs.

4. List the major e-procurement segments and some activities in each.

These segments and activities are summarized on pages 212 and 213.

2. How do online reverse auctions work?

Companies place their RFQ information online and allow bidders to access that information and place bids. The best bidder will be selected and usually with the lowest price

3. List the benefits of Web-based reverse auctions.

There are several benefits to Web-based reverse auctions including: decreased processing time, easier bidding, easier analysis of bids, and reduced bidding preparation costs.


1. Describe a buyer-operated procurement marketplace and list its benefits.

An internal marketplace is an aggregation of several different suppliers’ catalogs in one location. The major benefits of this type of aggregated catalog system involve the ease and speed of the resulting ordering process.

2. Describe the benefits of desktop purchasing.

The benefits include the ability to purchase quickly and at a lower acquisition cost.

3. Discuss the relationship of desktop purchasing with internal procurement marketplaces and group purchasing.

The system allows for easier internal purchasing with fewer management hurdles. It also allows the effective consolidation of MROs for group purchasing.

4. Explain the logic of group purchasing and how it is organized.

Group purchasing is based on the idea that individual buyers will be able to negotiate a better price on goods and services if they act as a buying group. Group purchasing is organized through internal or external aggregation depending on the size of the firm placing the order. External aggregation is usually organized through a third-party system.

6. How does B2B bartering work?

B2B bartering usually involves an intermediary operating a bargaining exchange where firms and the goods they would like to trade can be matched.


1. Define B2B exchanges and list the various types of public exchanges.

A B2B exchange is a many-to-many e-marketplace for business-to-business transactions. Exchanges are categorized as direct or indirect, and then systematic or spot sourcing.

2. Differentiate between a vertical exchange and a horizontal exchange.

A vertical exchange works with specific products for a specific industry while a horizontal exchange works with general products for many industries.


3. What is a third-party–owned exchange?

A third-party exchange is an exchange that is owned by a neutral third party.

4. In the following diagram, what is meant by “Support Services”? Can the manufacturer do B2B without them? Explain your answer

Support Services

Slides Group # 3 E-Supply Chains, Collaborative Commerce, and Corporate PortalsSection 5.11 Review Questions

List some of the reasons corporations are using social networking in B2B EC.

These tools allow them to tap into networks of potential buyers at a low cost.

What are some of the benefits of social networking for B2B EC?

Discover new business partners.Improve recruitment (mostly B2C, but some B2B)Enhance their ability to learn about new technologies, competitors, and the business environmentFind sales prospectsImprove participation in industry association activities (including lobbying)

Discuss the strategies for B2B social networking.

Strategies include participation, monitoring, and using existing applications.


Distinguish between organizational buyers and individual consumers.

Organizational buyers are puchasing for their organization while individual customers are purchasing for their own use.

Describe B2B EC marketing and advertising methods.

A variety of marketing methods online and off-line are used in B2B. Online directory services or specific

customer targetting may be used. Off-line marketing representatives may make sales calls and attend events.

Explain how affiliate programs and data mining work in B2B EC.

Firms use both programs to better understand customers, and cater to their needs through better product offerings and sharing in sales.

Answers to EC Application Case Questions

EC Application Case 5.1: Gregg’s Cycles Goes Online

1. Why is this a B2B sell-side case?

The website acts as a catalyst for end purchasers to enter the retail channel. It is a benefit to the retail channel.

2. What are the benefits of this type of Web site for the company?

The site allows users to become familiar with the product, and sells product accessories.

3. Relate the case to social networks.

The site helps to provide a large variety of information on all aspects of cycling, drawing repeat users who will eventually become customers.

4. How does CartGenie support the site?

This is the EC cart software that supports product information and sales.

EC Application Case 5.2: Whirlpool B2B Trading Portal

1. How do Whirlpool’s customers benefit from the portal?

It allows customers to easily select items from a catalog, enter orders, and track them online.

2. What are the benefits of the trading portal to Whirlpool?

It decreases the overall cost of processing orders.

3. Relate the B2B sell-side to a B2C storefront.

These are very similar applications in what they do; the difference is who is targeted at the site (known end users versus anonymous customers).

EC Application Case 5.3: W.W. Grainger and Goodrich Corporation

1. Enter grainger.com and review all services offered to buyers. Prepare a list of these services.

The site offers a full catalog, as well as shopping and pricing assistants.

2. Explain how Goodrich’s buyers save time and money.

They can shop at one location for a variety of products.

Shopping online is quick.

3. What other benefits does Goodrich enjoy by using grainger.com?

There is a decrease in paperwork due to the use of online purchasing and purchasing cards.

4. How is desktop purchasing implemented at Goodrich Corporation?

The system has decreased the time spent by purchasing agents and has allowed purchasing to be completed by employees through purchasing cards.

EC Application Case 5.4: How the State of Pennsylvania Sells Surplus Equipment

1. Why is heavy equipment amenable to such auctions?

It is high value, with potential buyers that are physically distant or unable to attend a specific time auction.

2. Why did the state generate 20 percent more in revenues with the online auction?

By allowing a larger potential market, the price of the items increased.

3. Why do you need an intermediary to conduct such an auction?

The intermediary may help increase the potential market pool as well as supplying the needed technical infrastructure.

4. Comment on the number of bidders and bids as compared with off-line auctions.

The numbers increase as more buyers have access.

EC Application Case 5.5: ChemConnect: the World Commodity Chemical Exchange

1. List the benefits of ChemConnect to trading companies.

The website allows partners to list, buy, and sell chemical commodities. Additionally, ancillary services make these transactions easier and more cost efficient.

2. Describe the different trading platforms.

The systems offer platforms for buyers and sellers, as well as a connection to global spot prices. These systems allow partners to easily access information and complete transactions.

3. List some of the capabilities of the system.

The system provides a number of features including tools that streamline processes to create more cost efficient agreements.

EC Application Case 5.6: ALIBABA.COM

When the company’s IPO started trading, hundreds of large corporations rushed to invest in it. Why?

Investors believed that the firm had the ability to capitalize on an expanding market and scale competitively.

Trace Alibaba.com’s revenue sources.

Revenue comes from advertisements as well as fees for special services.

3. List the major services provided by Alibaba.com.

The site provides sellers access to a well trafficked location with easy to use e-commerce capabilities. Buyers find an easy to search database of products and services.

EC Application Case 5.7: AGENTRICS: A GIANT RETAIL EXCHANGE

1. Enter agentrics.com and find information about services offered, including auctions and negotiations. Write a report.

Student reports will vary. The site offers a wide range of services to meet the needs of those dealing in packaged goods.

2. Enter agentrics.com and identify the services offered and the benefits to retailers and to suppliers. Write a summary.

Many services exist, from auctions to information and matchmaking between companies. Student reports will vary.

3. Enter webmethods.com and find information about the item synchronization project (for WWRE). Summarize the benefits to retailers and to suppliers.

Student reports will vary. The project hopes to eliminate confusion over items and their features.

Answers to Discussions Questions

1. Explain how a catalog-based sell-side e-marketplace works and discuss its benefits.

Sell-side catalog-based marketplaces are very similar to business-to-consumer catalog-based marketplaces. They provide a service that allows buyers to easily select and purchase products from a catalog of potential goods provided by the seller. Sellers are able to easily display a large variety of items to their potential buyers. Buyers are able to make their purchases easily through this online system.

2. Discuss the advantages of selling through online auctions over selling from catalogs. What are the disadvantages?

Selling through auctions has several advantages including low overhead and operational costs if a third-party auction is used, the ability to sell one-of-a-kind items easily, the ability to sell at the prevailing market price, and the ability to change products and pricing quickly. Disadvantages might include limited selling times and reduced control

over price.

3. Discuss the role of intermediaries in B2B. Distinguish between buy-side and sell-side intermediaries.

Intermediaries in business-to-business electronic commerce generally perform some sort of value-added operation. These intermediaries provide value through their ability to move goods through the value chain in a manner that assists both those upstream and downstream. Sell-side involves one seller to many buyers, while buy-side involves one buyer from many sellers.

4. Discuss and compare all of the mechanisms that group-purchasing aggregators can use.

Student answers will vary based on the aggregators compared.

5. Should desktop purchasing be implemented only through an internal marketplace?

Student answers will vary and will be based on the interplay between organizational control and ease of purchasing.

6. How do companies eliminate the potential limitations and risks associated with Web-based EDI? (See Online File W5.3.)

Student reports will vary.

7. Suppose a manufacturer uses an outside shipping company. How can the manufacturer use an exchange?

The company can still use the exchange to identify buyers and suppliers.

8. Compare and contrast a privately owned exchange with a private e-marketplace.Both allow for the exchange of goods between multiple parties, but the focus is on the type of customer served.9. How does ChemConnect change the market for commodity chemicals?The site allows buyers and sellers to easily connect, reducing transaction costs.

10. Compare external and internal aggregation of catalogs.

The difference is where the aggregation occurs. Internal aggregation combines all of a company’s catalogs into one database. External aggregation combines multiple company catalogs into one.

Internet Exercises

(Note: URLs may change over time; please check the Internet Exercises on the Turban Web site for possible updates: www.prenhall.com/turban.)

1. Enter gxs.com and review GSX Express’s bidding process. Describe the preparations your company would make in order to bid on a job.

Answers will vary.

2. Enter inovis.com and view the capabilities of BizManager (inovis.com/solutions/software/bizmanager) and BizConnect (inovis.com/ trybizconnect/form.jsp).Write a report.

Answers will vary.

3. Examine the sites, ariba.com, trilogy.com, and icc.net. Match a B2B business model with each site.

ariba.com – solution provider for sell-side, buy-side, exchanges and collaborative commercetrilogy.com – business-to-business e-commerce software providericc.net – solution provider for supply chain integration software

4. Visit supplyworks.com and procure.com. Examine how each company streamlines the purchase process. How do these companies differ from ariba.com?

These firms provide software solutions that automate Supplier Resource Management.

http://www.prenhall.com/turban

The solutions allow tighter integration and lower transaction costs between buyers and sellers. The concentration is on solutions for the supply-side. While ariba.com provides similar solutions, they also focus on buy-side and complete supply chain integration.

5. Visit ebay.com and identify all activities related to its small business auctions. What services are provided by eBay?

It appears that eBay no longer offers auctions specific to small businesses.

6. Enter ondemandsourcing.com and view the demo. Prepare a list of benefits to small and mid-tier organizations.

Student responses will vary. Different firms many have greater needs (and perceived value) in different areas.

7. Enter bitpipe.com and find recent B2B vendor reports related to e-procurement. Identify topics not covered in this chapter.

Student responses will vary.

8. Visit iasta.com, purchasing.com, and cognizant.com examine the tools they sell for conducting various types of e-procurement. List and analyze each tool.


9. Enter bambooweb.com and find information about EDI. Prepare a report.


10. Enter the-buying-group.com, tidewatergpo.com, and other group purchasing sites. Report on B2B group buying activities.


11. Go to procurenet.com.au. Prepare a list of resources related to e-procurement.


12. Go to alibaba.com and sign up as a member (membership is free). Create a product and post it. Tell your instructor how to view this product.


13. Compare the services offered by globalsources.com with those offered by alibaba.com. Assuming you are a toy seller, with which would you register? Why? If you are a buyer of auto parts, which would you join and why?


14. Enter chemconnect.com and view the demos for different trading alternatives. Examine the revenue model. Evaluate the services from both the buyer’s and seller’s points of view. Also, examine the site policies and legal guidelines. Are they fair? Compare chemconnect.com with chemicalonline.com and hubwoo.com. Which of these do you think will survive? Explain your reasoning.


Team Assignments and Role Playing

1. Predictions about the future magnitude of B2B and statistics on its actual volume in various countries keep changing. In this activity, each team will locate current B2B predictions and statistics for different world regions (e.g. Asia, Europe, North America). Using at least five sources, each team will find the predicted B2B volume (in dollars) for the next 5 years in their assigned region. Possible sources of data are listed in Exhibit 3.1 (page 102).

Student answers will vary based on which statistics are used and when statistics are procured.

2. Each team should explore a different e-procurement method and prepare a paper for class presentation. The paper should include the following about the e-procurement method: a. The mechanisms and technologies used b. The benefits to buyers, suppliers, and others (if appropriate) c. The limitations d. The situations for which each method is recommended

Student answers will vary based on method selected.

3. Form two teams (A and B) of five or more members. On each team, person 1 plays the role of an assembly company that produces television monitors. Persons 2 and 3 are domestic parts suppliers to the assembling company, and persons 4 and 5 play foreign parts suppliers. Assume that

the TV monitor company wants to sell televisions directly to business customers. Each team is to design an environment composed of membership in exchanges they can use and present its results. A graphical display is recommended.

Student experiences and reports will vary.

4. Enter isteelasia.com, metalworld.com, and lme.co.uk. Compare their operations and services. These exchanges compete in global markets. Examine the trading platforms, portal capabilities, and support services (e.g., logistics, payments, etc.) offered by each.In what areas do these companies compete? In what areas do they not compete? What are the advantages of isteelasia.com in dealing with Asian companies? Are regional exchanges needed? If it is good for Asia to have a regional exchange, why not have a Western European exchange, an Eastern European exchange, a Central American exchange, and so on? If regional exchanges are needed, can they work together? How?If there are too many exchanges, which are likely to survive? Research this topic and prepare a report.


5. Enter gtnexus.com and examine its offerings. Prepare a report on how exchanges can benefit from its services. How does GT Nexus facilitate supply chains? Can it help e-marketplaces?


6. Address the following topics in a class discussion:a. Discuss B2B opportunities in social networking.b. Discuss risk in B2B social networking.c. Discuss how globalization impacts B2B.d. Relate B2B to the four P’s of marketing (product, pricing, placement, promotion).

Student experiences and answers will vary.

End-of-Chapter Real-World Case: IMARKETKOREA

How do the support services benefit the exchange?

These systems increase customer savings, from which the exchange profits.

2. Relate this case to desktop purchasing.

This uses some of the concepts of efficient desktop purchasing, but then expands them past purchasing to the enterprise efficiency level.

3. Write a summary of the benefits of the exchange to buyers.

Student summarizes will vary, but will include reduced costs, increased efficiency and better information on processes.

4. Write a summary of the benefits of the exchange to sellers.

Student summarizes will vary, but will include increased sales and customer loyalty.

5. Compare iMK to Alibaba.com. What are the similarities and the differences?

Student perceptions will vary, but it appears that the focus of iMK is broader, with an

emphasis on process, not just product.

6. Much of iMK’s success is attributed to the understanding of the Korean culture and business environment. Given that iMK wants to expand internationally, what could be some of its stumbling blocks?

The major issue that the group will need to face is how to replicate their model outside of a Korean manufacturing group

7. Check the recent news and press releases (last 6 months) at imarketkorea.com. Identify expansion patterns.

Student reports will vary.

1. Define the e-supply chain and list its three major parts.

It is a supply chain that is managed electronically, usually using Web technologies and has three major parts: upstream, internal, and downstream.

2. Describe success factors of e-supply chain management.

These factors include the ability to see collaboration as an asset, information visibility, speed/quality/customer service, and tight integration.

3. List the main parts of e-supply chains.Upstream supply chain, Internal supply chain and value chain and

downstream supply chain

3. List any 4 processes (activities) of e-supply chains.

These include replenishment, e-procurement, monitoring, inventory management, collaborative planning, and e-logistics.

4. List the major e-supply chain management infrastructures and enabling tools.

These include extranets, intranets, corporate portals, workflow systems, groupware and Electronic Data Interchange (EDI)

5. Describe a digital supply chain.A supply chain that is managed electronically, usually with Web technologies.

6. Describe visibility and tracking along the supply chain.

Visibility and tracking are important so that there will not be any surprises related to order quantity or delivery times. Various systems and databases track production and distribution so that any needed adjustments can be made.

1. Describe some typical problems along the supply chain.

Some problems include missed deliveries/improper inventories and quality problems.

2. Describe the reasons for supply chain-related problems.

There are several potential reasons, but many center on lack of communication and information visibility.

3. Describe the bullwhip effect.

The bullwhip effect is when large fluctuations in inventories along the supply chain occur, resulting from small fluctuations in demand for finished products.

4. Describe the benefits of information sharing along the supply chain.

The major benefit is an improvement in the overall functioning of the supply chain – better communication provides more information for better planning.

5. List some EC solutions to supply chain problems.

These solutions come in the areas of visibility and tracking, inventory planning, vendor-managed inventory and collaborative commerce, forecasting, replenishment

1. Describe how RFID can be used to improve supply chains.

RFID tags can be attached to products to more carefully monitor their location for inventory purposes.

2. Explain how RFID works in a supplier-retailer system.

Suppliers attach RFID tags so retailers can track shipment and receiving.

3. Briefly explain the differences between active and passive RFID tags.

Active tags include an internal power supply while passive tags do not.

4. In what circumstances would it be better to use passive RFID tags? And in what circumstances might it be better to use active RFID tags?

Passive tags are better in high volume settings where scanning is easy. Active tags are better in difficult to scan locations.

5. What are some of the major limitations of RFID technology?

Cost of implementation Limited use by environment Accuracy Privacy Lack of standards

6. Describe RuBee and its capabilities.

RuBee is a bidirectional, on-demand, peer-to-peer radiating transceiver protocol. RuBee has several complimentary features that include:

Use of magnetic waves Longer battery life Better locatiblity Lower cost infrastructure

5. Define VMI and list its benefits.

Vendor-managed inventory (VMI) – The practice of retailers making suppliers responsible for determining when to order and how much to order. Benefits include less time spent on calculations and more accurate order quantities.

7. How might collaboration support and improve industry supply chains?

It would provide more accurate information about needs and trends which could stabilize the chain and reduce flow times.

1. Define collaborative planning.

In collaborative planning, business partners—manufacturers, suppliers, distribution partners, and other partners—all have real-time access to point-of-sale order information.

2. Define CPFR and describe its advantages.

A project in which suppliers and retailers collaborate in their planning and demand forecasting to optimize flow of materials along the supply chain. This process helps improve integration and reduces costs and increases speed.


1. What is a corporate portal?

A corporate portal is a gateway for entering a corporate Web site, enabling communication, collaboration and access to company information.

2. List the types of corporate portals.

Portal types can include supplier/partner portals, customer portals, employee portals, executive/supervisor portals and mobile portals.

3. List five applications of portals.

Some of the possible applications of corporate portals include: knowledge bases and learning tools, business process support, collaboration and project support, data access, and security applications.

4. List the benefits of corporate portals.

These benefits include simple access/navigation, improved access to information, usability of common applications, and the ability to use platform independent applications.

1. Discuss the relationship between c-commerce and corporate portals.

Corporate portals can be used as a method of collaborative commerce for employees, customers and other stakeholders.

2. Compare and contrast a commercial portal (such as Yahoo!) with a corporate portal.

Both Web sites provide a variety of information and a variety of types of potential learning and interaction. An Internet portal such as Yahoo! is horizontal, providing a variety of different types of information about various topics. A corporate portal is vertical, providing information only about the company.

8. Explain the need for groupware as a facilitator of collaboration.

Groupware allows different groups and individuals to freely collaborate and communicate. This is the function groupware is designed for, and it simplifies the process and generally adds to the richness of the communication.

9. Discuss the need for workflow systems as a companion to e-commerce.

Workflow systems allow for more efficient movement of orders, information, or goods.

13. Describe the advantages of RFID over a regular bar code in light of supply chain management.

RFID eliminates the need to scan barcodes, since movement along the supply chain is tracked by actual location.

True/False1) The downstream part of the supply chain includes the activities of a company with its suppliers, which can be manufacturers, assemblers, or both, or service providers, and their connections with their suppliers.

Answer: FALSE9) Product delays, products not being where they are required at the right time, customer dissatisfaction, and lost sales can all be caused by supply chain problems.

Answer: TRUE10) Pure EC companies are likely to have more supply chain problems if they lack a logistics infrastructure and must use external logistics services.

Answer: TRUE

Multiple choices1) Internal supply chain includes _______________

A) Invoicing.B) Transportation.C) Logistics.D) Domestic suppliers.

5) One of the major limitations of RFID technology is A) Limited user interface.B) Cost.C) Transmission.D) None of the above.

6) The planning, organizing, and coordinating of all the activities relating to purchasing goods and services needed to accomplish the organization's mission best defines

A) buy-side e-marketplace.B) Supply chain management.C) Procurement management.D) Customer relationship management.

8) Supply chain aims to ____________________ A) Providing customers with the highest quality. B) Minimize inventory levels.C) Maximize inventory levels.D) Eliminate inventory levels.

9) For a manufacturer, the supply chain ends:A) when the supplier delivers raw materials and component parts to the manufacturer.B) when the customer buys the product. C)when the product is used up and disposed of.D) when the customer decides he/she is satisfied with a product.

chapter 1 - mr. mohamed zaki · web viewdescribe success factors of e-supply chain management....

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