imchapter5.docx

imchapter5.docx

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imchapter5

Chapter5

B2BE-Commerce:

SellingandBuyinginPrivateE-Markets

LearningObjectives

Uponcompletionofthischapter,youwillbeableto:

1.DescribetheB2Bfield.

2.DescribethemajortypesofB2Bmodels.

3.Discussthecharacteristicsofthesell-sidemarketplace,includingauctions.

4.Describethesell-sideintermediarymodels.

5.Describethecharacteristicsofthebuy-sidemarketplaceande-procurement.

6.ExplainhowreverseauctionsworkinB2B.

7.DescribeB2Baggregationandgrouppurchasingmodels.

8.Describeotherprocurementmethods.

9.ExplainhowB2Badministrativetaskscanbeautomated.

10.DescribeinfrastructureandstandardsrequirementsforB2B.

11.DescribeWebEDI,XML,andWebservices.

Content

GeneralMotors’B2BInitiatives

5.1Concepts,Characteristics,andModelsofB2BEC

5.2One-to-Many:

Sell-SideMarketplaces

5.3SellingviaIntermediaries

5.4SellingviaAuctions

5.5One-from-Many:

Buy-SideMarketplacesandE-Procurement

5.6Buy-SideE-Marketplaces:

ReverseAuctions

5.7OtherE-ProcurementMethods

5.8AutomatingB2BTasks

5.9Infrastructure,Integration,andSoftwareAgentsinB2BE-Commerce

ManagerialIssues

Real-WorldCase:

EastmanChemicalMakesProcurementaStrategicAdvantage

AnswerstoPause/BreakSectionReviewQuestions

Section5.1ReviewQuestions

1.DefineB2B.

Business–to-businesse-commercereferstotransactionsbetweenbusinessesconductedelectronicallyovertheInternet,extranets,intranetsorprivatenetworks.

2.Discussthefollowing:

spotbuyingversusstrategicsourcing,directmaterialsversusindirectmaterials,andverticalmarketsversushorizontalmarkets.

Spotbuyingisthepurchaseofgoodsandservicesastheyareneeded,usuallyatprevailingmarketprices.Incontrast,strategicsourcingisthepurchaseofgoodsandservicesinvolvinglong-termcontractsthatareusuallybasedonprivatenegotiations.Directmaterialsarethematerialsthatareusedinthecreationofaproductwhereasindirectmaterialsareusedtosupportthatproduction.Verticalmarketsareconcentratedinaspecificindustrywhereashorizontalmarketsconcentrateonaproductorservicethatisusedacrossseveralindustries.

3.Whatarecompany-centricmarketplaces?

Aretheypublicorprivate?

Company-centricmarketplacesfocusonasinglecompany’spurchasingneedsorsellingneedsandaregenerallyprivateentitiesownedbythatcompany.

4.DefineB2Bexchanges.

AB2Bexchangeisamany-to-manye-marketplace,usuallyownedandrunbyathirdparty,inwhichmanybuyersandsellersmeetelectronicallytotradewitheachother.

5.RelatethesupplychaintoB2Btransactions.

Theuseofbusiness-to-businesselectroniccommerceisgenerallyapartofexistingsupplychainsthatareusedtomakethemmoreefficient.

6.ListtheB2Bonlineservices.

ThevirtualserviceindustriesinB2Binclude:

travelservices,realestate,electronicpayments,onlinestocktrading,onlinefinancingandotheronlineservices.

7.SummarizethebenefitsofB2B.

Thesebenefitsarelistedonpage224.

Section5.2ReviewQuestions

1.Listthetypesofsell-sideB2Btransactionmodels.

ThemajortypesofB2Bsell-sidetransactionsincludesellingfromelectroniccatalogs,sellingthroughforwardauctionsandone-to-oneselling.

2.DistinguishbetweenuseandnonuseofintermediariesinB2Bsell-sidetransactions.

Insomecases,firmsmayuseanintermediarytoprovidesomeoralloftheirsell-sidetransactionsystems.Whenintermediariesareused,itisgenerallyintheformatofanelectronicmarketplace.Thelargerthefirm,themorelikelyitistouseaprivate,andnotathird-partyintermediarysystem.

3.Whatarebuy-sideandsell-sidetransactions?

Howdotheydiffer?

Buy-sidetransactionsinvolveonebuyerandmanysellerswhereassell-sidetransactionsinvolveonesellerandmanybuyers.

4.DescribecustomerserviceinB2Bsystems.

CustomerserviceinB2BsystemsisverysimilartothecustomerserviceprovidedinB2Csystems.Itisimportanttoprovidethecustomerwithawaytointeractwiththemerchantandhavetechnicalquestionssolved.Inthismarket,personalization/customizationoftheservicebecomesevenmoreimportantbecauseofthelargesalesvolumeinvolved.

5.DescribedirectB2Bsalesfromcatalogs.

B2BcanusecatalogsinmuchthesamewaythatB2Cmerchantscan.Merchantsareabletolistavarietyoftheirproductsonlineforcustomerstoselectandpurchasefrom.Personalization/customizationbecomesmoreimportantinB2Bsell-sidetransactionswhenfirmsareworkingwithlargercustomers.

6.DiscussthebenefitsandlimitationsofdirectB2Bsalesfromcatalogs.

Thereareseveralbenefitstodirectsalesincluding:

lowerorderprocessingcosts,afasterorderingcycle,fewererrors,lowersearchcostsforbuyers/sellers,lowerlogisticscostsandcustomizationoptions.Thelimitationstodirectsalesincludeattractingbuyers,channelconflicts,themethodofelectronicindicationandtherequiredscaletooperateefficiently.

7.DescribeCisco’sB2BactivitiesandlisttheirbenefitstoCiscoandtoitscustomers.

Cisco’sSystemprovidesacentralportalforservice,orderingandorderinformation.Thebenefitsofthesystemincludedecreasedcosts,increasedquality,betterandfastertechnicalsupportandreduceddistributioncosts.

Section5.3ReviewQuestions

1.WhataretheadvantagesofusingintermediariesinB2Bsales?

Itallowsmanufacturerstodecreasetheneedforcustomermarketinganddistribution.Customerscanaccessseveralproductlinesinonearea.

2.WhatspecialservicesareprovidedtobuyersbyBoeingParts?

（OnlineFileW5.2.）

AwidevarietyoftheactivitiesinBoeing'ssupplychainareimprovedbyitsonlineinitiatives.Examplesoftheseimprovementsincludetheabilitytohandletransactionsmoreefficiently,theabilityforcustomerstoorderpartsconvenientlyonline,reducedpersonnelcostsandgoodwilltowardsBoeing,whichmayresultinfuturepurchases.

3.CompareGrainger’sCasewithMarshall（OnlineFileW5.3）.Whatarethecommonelements?

Whatarethedifferences?

Bothsystemsallowcustomerstoservethemselveswithinformation,orders/customizationandcommunication.Thefocusandcomplexityofthesystemsdiffer.

4.Compareane-distributorinB2BtoA.Whatarethesimilarities?

Whatarethedifferences?

Theservicesareverysimilarinthattheyaggregateanddistributegoodsfromavarietyofmanufacturers.Thedifferenceslieinthetype,complexityandcostofthegoodsdistributed.

Section5.4ReviewQuestions

1.ListthebenefitsofusingB2Bauctionsforselling.

ThefourmajorbenefitsofusingB2Bauctionsforsellinginclude:

revenuegeneration,costsavings,increasedpageviewsandmemberacquisition/retention.

2.Listthebenefitsofusingauctionintermediaries.

Thebenefitsofusinganintermediaryincludethelackofnewrequiredresources,fasttimetomarket,customizationofinterface,lowtechnicalandongoingrequirementsandoutsourcingofbilling/collections.

Section5.5ReviewQuestions

1.Defineprocurementandlistthemajorprocurementmethods.

Procurementistheacquisitionofgoodsandservicesforabusiness.Themajormethodsarelistedonpage231.

2.Describetheinefficienciesoftraditionalprocurement.

Thetraditionalprocurementsystemisinefficientbecauseitinvolveslargeamountsoftimespentanalyzingsmallrepetitivepurchasesthatcouldbemademoreefficientlythroughamoredevelopedsystem.Additionally,thelackofthisdevelopedsystemcreatesmaverickbuying.

3.Definee-procurementanditsgoals.

E-procurementistheelectronicacquisitionofgoodsandservicesforabusiness.E-procurementattemptstoachievethefollowinggoals:

increasedproductivity,lowerpurchaseprices,improvedinformationflow,minimizedmaverickpurchasing,improvedpaymentprocesses,fasterpurchasing,reducedprocessingcosts,andfindingnewsuppliers/vendors.

4.HowdodirectmaterialsfromMROsdiffer?

WhyareMROsgoodcandidatesfore-procurement?

Directmaterialsarethosematerialsthatareusedintheproductionprocessandarepartofthefinisheditem.Indirectmaterials（MROs）arematerialsusedtosupportthemanufacturingprocessbutarenotusedasapartofthefinishedgood.OfficesuppliesareanexcellentexampleofMROs.MROsareanexcellentcandidatefore-procurementbecausetheyaregenerallysmalldollaritemsthatarepurchasedrepetitively.

5.Describetheimplementationofe-procurement.

Toimplemente-procurementafirmmustfirstdecidehowitfitsinitsoverallstrategy.Afterthisisdetermined,thefirmmustevaluateitsexistingprocessesandchangesthatthissystemwillmakeinbothprocessesandpersonnel.Next,thefirmmustbegintosetupthesoftwarethatwillallowthemtocontinue.Thisprocesswillinvolveestablishingwhatgoodsshouldbepurchasedandfromwhom.Additionally,back-endsystemsmustbeconfigured.

6.Describee-sourcinganditsbenefits.

E-sourcingincludestheprocessesandtoolsthatenablethesourcingprocesselectronically.Thisdecreasesprocesstimeandleadstodecreasedcostsforcustomersandsuppliers.

Section5.6ReviewQuestions

1.Describethemanualtenderingsystem.

Underamanualtenderingsystem,buyerscreatedescriptionsoftheproductsthattheywouldliketopurchaseandthensendoutRFQstopotentialbidders.Potentialbiddersreviewtheinformation,askquestionsandsubmitbids.Buyersthenevaluatethebidsandselectabidder.

2.Howdoonlinereverseauctionswork?

CompaniesplacetheirRFQinformationonlineandallowbidderstoaccessthatinformationandplacebids.

3.ListthebenefitsofWeb-basedreverseauctions.

ThereareseveralbenefitstoWeb-basedreverseauctionsi