Saturday 3 August 2019

e-business and the Supply Chain. - Review Notes

Learning Objectives (Chopra and Meindl)

1. Identity the role of e-business in a supply chain.
2. Evaluate the impact of setting up an e-business on revenues for a supply chain.
3. Evaluate the impact of setting up an e-business on costs for a supply chain; and
4. Identify factors that influence the value of e-business in a supply chain.

Identity the role of e-business in a supply chain.

E-Business or E-Commerce is the facilitating of enquiry, order booking and execution of order using internet facilities. Flow of information, delivery of certain products and funds transfer are taking place through E-business mode in supply chains.

Companies can do the following functions or activities with suppliers and customers through E-business mode or facilities.

Provision of information about products and facilities

Negotiation of prices and contracts

Order booking

Tracking of order by customers

Delivery of certain products (electronic documents, e-books, music, videos etc., examinations)

Sending delivery information and payment instructions

Funds transfers and payments

Evaluate the impact of setting up an e-business on revenues for a supply chain.

E-business offers revenue-enhancing opportunities as well as cost reduction opportunities to business organizations.

Revenue Enhancing Opportunities

Direct sales to customers - disintermediation - Customers can view the full product line of the firm at their convenience and time of choice and also place orders at their convenience and choice.

Providing 24-hour access for information, order placing, and order tracking.

Availability of more and aggregated information about customers (CRM)

Providing mass customization

Faster time to market

Ability to provide flexible price quotes

Ability to provide differentiated services

Evaluate the impact of setting up an e-business on costs for a supply chain

Cost-Reduction Opportunities

Supply chain reduction

Efficient delivery of downloadable products

Reduction in order handling costs

Decrease in inventory costs due to centralized warehouses

Improvement in supply chain coordination and resultant decrease in costs

Internet Markets

Electronic markets are communities of interest where in buyers and sellers come together, exchange information, discuss, negotiate and finalize deals in virtual space instead of physical space.

References

Sunil Chopra and Peter Meindl, Supply Chain Management: Strategy, Planning and Operations, Prentice Hall, 2001. Supply Chain Management: Chopra and Meindl - Book Information and Review