Professional Documents
Culture Documents
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Learning Objectives
Describe the B2B field Describe the major types of B2B models Describe the characteristics of the sell-side marketplace Describe the sell-side intermediaries models Describe the characteristics of the buyside marketplace and e-procurement
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Types of transactions
Spot buyingdetermined by dynamic supply and demand Strategic sourcinglong term contracts
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Traditional process managed through paper transactions B2B applications offer competitive advantages for supply chain management (SCM)
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B2B Models
Company-centric models
Sell-side marketplace (one-to-many) Buy-side marketplace (many-to-one)
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Sell-Side Marketplaces:One-to-Many
Virtual sellersBigboxx.com.hk of Hong Kong
B2B office supply retailer services
Large corporate clients Medium corporate clients Small offices
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(cont.)
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Milacron, Inc.
Site contains 55,000 products
Easy to use Securely handles selection, purchase, application
Technical serviceexpanded to provide a higher level of service than previously available at the site 23
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Successful cases
Dell Intel
IBM Cisco
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Successful if:
Sufficient number of loyal customers Products well known Price not major purchasing criteria
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Customer serviceCisco Connection online Online orderingInternet Product Center builds virtually all products to order Order statuscustomer tools for finding answers to order status inquiries
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Benefits to customers
Quick order configuration Immediate cost determination Collaboration with Cisco staff
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Sell-Side Intermediaries
Marshall Industries(a subsidiary of
AvnetMarshall) multinational distributor of
electronic components known for its innovative uses of IT and the Web Products and services
MarshallNet Marshall on the Internet (portal) Strategic European Internet Electronic Design Center PartnerNet NetSeminar Education and News Portal
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Indirect purchasing
MROs Nonproduction materials
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Procurement Revolution at GE
TPN at GE Lighting Division
Purchasing was inefficienttoo many administrative transactions
Process for each requisition took 7 days Complex and time-consuming Could only send out bids for 2 or 3 suppliers
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Redeployment
60% of the staff Sourcing department concentrates on strategic activities instead of paperwork, etc.
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Invoices automatically reconciled reflecting modifications GE procurement departments share information about their best suppliers across the world
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Rapid distribution of information Transmit electronic drawings to multiple suppliers Decrease sourcing cycle time Quick receipt and comparison of pricing bids
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Deployment strategies
Start EC in one division and slowly go to all divisions Use the site as public bidding marketplace to generate commission income to GE
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Aggregating Catalogs
Aggregating suppliers catalogs: an internal marketplace
Maverick buying to save time leads to high prices Aggregating all approved suppliers catalogs in one place
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Group Purchasing
Group purchasingorders from several buyers are aggregated
Internal aggregation
Economy of scale Reduced transaction processing cost
External aggregation
Aggregating demand online Putting together orders from multiple buyers to make large volumes/lower costs
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Electronic Bartering
Electronic bartering
Exchange of goods or services without the use of money Exchange a surplus for other need Bartering exchange
Submit surplus to exchange for points Points used to buy what company needs
Benefits:
Faster than manually Easier to match
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B2B Infrastructure
Server to host database and applications Software for executing sell-side (catalogs) Software for conducting auctions and reverse auctions Software for e-procurement (buy-side)
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Software for CRM Security hardware and software Software for building a storefront Telecommunications networks and protocols
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Integration
ERP software Customer, supplier, and other databases Legacy systems Catalog (product) information Inventory systems Sales statistics Decision support systems (DSS) and SCM applications
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Integration (cont.)
Integration with existing information systems
Issues in integrating with back-end information systems:
Intranet-based work flow Database management systems (DMBS) Application packages ERP Back-end sell-side integration works for sellers but not buyers and vice versa
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Integration (cont.)
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B2B Agents
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Implementation Issues
Justification and prioritization
Must conduct cost benefit analysis of proposed projects Include organizational impacts
Possible channel conflicts Dealing with resistance to change due to processes reengineering
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Affiliate programs
Referral program Useful for B2B intermediaries
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Managerial Issues
B2B marketingsell-side marketplaces require advertisement and incentives Which models to use and whenneed for implementation strategies and prioritization Purchase process reengineering (BPR)
Establish buy-side marketplace on its server if volume is big enough to attract major vendors Join third-party intermediary-oriented marketplace if volume is small
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