Mini-Project on M-Commerce

Transcription

1 Mini-Project on M-Commerce Structure Migration: From E-Business to M-Business (Chicago) Trends Shaping the Mobile Economy (Bloomington) The M-Commerce Landscape (Peoria/Bloomington) Breakthrough Platform Strategy (Springfield) Mobile Application Infrastructure (Champaign 1) New Innovation Opportunities: Mobile Portals (Champaign 2) Supply Chain Focus (Champaign 3) A A A A A A A UIUC, M. Shaw 1

2 B2B e-commerce Learning Objectives: Can you identify different types of e-hubs based on what businesses buy and how they buy them? Can you describe the e-procurement process Identify five B2B e-commerce models across the supply chains between buyers and sellers. What are the pros and cons of each? UIUC, M. Shaw 2

3 What Do Businesses Purchase? Manufacturing inputs raw materials and components that go directly into a product or a process usually are industry-specific often purchased from vertical suppliers or distributors require specialized logistics and fulfillment mechanisms Operating inputs (MRO) maintenance, repair, and operating goods usually are not industry-specific frequently purchased from horizontal suppliers more likely to shipped through generalists, such as UPS UIUC, M. Shaw 3

4 How Do Businesses Purchase? Systematic sourcing involve negotiated contracts with qualified suppliers long term, close relationship between buyers and sellers Spot sourcing fulfill an immediate need at the lowest possible cost buyers and sellers rarely know each other or have a long term relationship UIUC, M. Shaw 4

5 The B2B Matrix systematic sourcing operating inputs MRO Hubs Ariba W.W. Grainger MRO.com manufacturing inputs Catalog Hubs PlasticsNet.com spot sourcing How businesses buy Yield Managers Employease Adauction.com CapacityWeb.com Exchanges e-steel PaperExchange.com Altra Energy fiwhat businesses buy UIUC, M. Shaw 5

6 E-Hubs Manufacturing Inputs Manufacturing Inputs Non-commodities commodities Catalog Hubs Exchanges Systematic sourcing Industry specific Often with logistic support Spot Sourcing Smoothing out peaks/valleys UIUC, M. Shaw 6

7 E-Hubs Operating Inputs Operating Inputs Systematic Sourcing Spot Sourcing MRO Hubs Yield Management Low value/high transaction costs items The goal is often transaction efficiency Good at markets with high price/demand variations and with high fixed-cost assets Smoothing out peaks/valleys UIUC, M. Shaw 7

8 Market-Making Mechanisms Aggregation bring together a large number of buyers and sellers under one virtual roof mostly for systematic sourcing the suppliers are highly fragmented static, transactions based on pre-negotiated prices adding another buyer benefits only the seller, and vice versa when products are specialized, not commodities purchasing is done through pre-negotiated contracts The number of SKUS is high UIUC, M. Shaw 8

9 Market-Making Mechanisms Matching bring buyers and sellers together to negotiate prices on a dynamic and real-time basis mostly for spot sourcing adding a new member increases the market s liquidity, therefore benefits both buyers and sellers Matching works best when: products are commodities or near-commodities and can be traded sight unseen massive trading volumes relative to transaction costs buyers and sellers are sophisticated enough to deal with dynamic pricing UIUC, M. Shaw 9

10 The Bias of e-hubs Neutral e-hubs operated by independent third parties don t favor buyers over sellers or vice versa; most likely to succeed in markets that are fragmented on both the buyer and seller sides challenge chicken and egg problem: buyers do not want to participate unless there is a considerable seller size, and seller do not want to participate unless there are sufficient number of buyers UIUC, M. Shaw 10

11 The Bias of e-hubs Seller-biased e-hubs favor sellers forward aggregators, e.g. Ingram Micro forward: the process that follows the traditional supply chain model with the suppliers at the start and the buyer at the end -biased e-hubs favor buyers reverse aggregators, e.g. FOB.com reverse auctioneers, e.g. FreeMarkets reverse: e-hubs gather a large number of buyers and then bargain with suppliers on their behalf UIUC, M. Shaw 11

12 Web-based Procurement System Decision support Web-based collaboration Procurement Support Authorization & Security management Procurement Transaction Support Product catalogs management Supplier Supplier Enterprise Information Systems Gateway Search & Ordering Communication & Coordination Order management Supplier Information Systems Gateway Supplier Receiving & Accounting Order Fulfillment Shipping & Logistics Supplier Market Making s CFQ & CFP Forming Auction, Reverse auction, Or Exchanges Bidding, Negotiation, & Contracting Sellers Demand side Interorganizational Supply side UIUC, M. Shaw 12

13 Requisition Creation Approval Cycle Product & Process Development P.O. Generation Concept to Check Caterpillar eprocurement Supplier Communications INVOICE Advance Ship Notice Payment INVOICE Invoice Receipt of Goods/Services UIUC, M. Shaw 13

14 The e-procurement Process Catalog Management Aggregated catalog Work with suppliers to create catalogs of products & services and negotiate total value Requisitioning Request Internet Supplier System Supplier data Internet Supplier catalog Aggregated catalog Using an online, browserbased tool, the requestor selects from a catalog, a quick-pick list or generates a special request Approval Requisition is automatically routed to an approval manager, per business rules Internet Supplier System Purchase Order Approved Internet Supplier System Aggregated catalog Aggregated catalog Once approved, PO is sent electronically, or autofaxed to supplier with notification to accounts payable and receiving; supplier can send order acknowledgement Fulfillment Delivery Internet Supplier System Payment Received OK to pay Internet A/R TXN Supplier System Aggregated catalog Approved Goods/services are delivered to Motorola Aggregated catalog Receipt acknowledgement sent to AP for processing, electronic invoicing and matching; payment transferred to Suppliers UIUC, M. Shaw 14 Account (EFT) Payment

15 Buying patterns for non- production goods and services with respect to volume and value High Value Low Facilities Mfg. Equipment Public Relations Consulting Accessories Floral Services Books & Training Promotional Items Computers Office Equipment Furniture Services Office Supplies Industrial Supplies Software Communications Low Volume High

16 Today s Supply Chain Tangle s s Distributors s Distributors s OFFLINE Process ONLINE Process UIUC, M. Shaw 16

17 A Gap in the Value Chain Inefficiencies Incomplete demand information s Distributors Multiple distribution steps s Complex pricing rules UIUC, M. Shaw 17

18 Five Different B2B Models 1. Direct Supply side UIUC, M. Shaw 18

19 1. direct Strengths Efficient Preserves brand Supports customer relationships Weaknesses One-off negotiations Expensive solution to scale Limited product availability Will predominate where single supplier/brand is critical and between large trading partners UIUC, M. Shaw 19

20 Five Different B2B Models Supply side 2. edistributor Distributor Distributor UIUC, M. Shaw 20

21 2. edistributor Strengths Convenient Broad product array from multiple suppliers Improved product information Weaknesses Predetermined pricing Limited usefulness for direct inputs or build to spec components Will predominate in MRO arena where purchasing from a catalog is customary UIUC, M. Shaw 21

22 Five Different B2B Models 3. Exchange/Auction sites Supply side Neutral Exchange Distributor Distributor UIUC, M. Shaw 22

23 3. Exchange/Auction sites Strengths Matching buyers and sellers Serving spot and seconds markets Driving truer market pricing Weaknesses Limited product availability Not useable by small/medium buyers Off-line transaction and fulfillment Will succeed in pure commodity markets and in large organizations for contract negotiation UIUC, M. Shaw 23

24 Five Different B2B Models 4.Catalog aggregators Supply side Neutral Buy side Catalog aggregator Distributor Exchange Distributor UIUC, M. Shaw 24

25 4. Catalog Aggregators Strengths Software platform Used to delegate and control purchasing Raise the value of ERP investments Weaknesses Expensive and complex to implement Value depends on catalogs plugging in Requires offline, vendor by vendor pricing negotiations Powerful solution for very large companies UIUC, M. Shaw 25

26 Five Different B2B Models 5. Purchasing hubs Supply side Neutral Buy side Catalog aggregator Exchange Distributor Distributor Purchasing hub UIUC, M. Shaw 26

27 Five Different B2B Models Supply side Neutral Buy side Catalog aggregator Distributor Exchange Distributor Purchasing hub UIUC, M. Shaw 27

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29 Ordered Joe Manager Standby Status: Approved UIUC, M. Shaw 29