Business-to-Business and E- Government Strategies

Supply Chain Management The part of an industry value chain that precedes a particular strategic business unit is often called a supply chain. A company’s supply chain for a particular product or service includes all the activities undertaken by every predecessor in the value chain to design, produce, promote, market, deliver, and support each individual component. The purchasing department has traditionally been charged with buying all these components at the lowest price possible.

Value Creation in the Supply Chain The process of taking an active role in working with suppliers to improve products and processes is called supply chain management (SCM). SCM was originally developed as a way to reduce costs.

Value Creation in the Supply Chain Today, SCM is used to add value in the form of benefits to the ultimate consumer at the end of the supply chain. Supply chain members can reduce costs and increase the value of products or services to the ultimate customer.

Internet Technologies in the Supply Chain Clear communications and quick responses to those communications are a key element of successful SCM. Technologies of the Internet and the Web can be very effective communication enhancers. Figure 5-11 lists the advantages of using Internet and Web technologies in SCM.

Internet Technologies in the Supply Chain

Logistic Activities The classic objective of logistics is to provide the right goods in the right quantities in the right place at the right time. Businesses have been increasing their use of information technology to achieve this objective. FedEx and UPS have freight tracking Web pages available to their customers.

Support Activities Online Benefits is a firm that duplicates its clients’ human resource functions on a secure Web site that is accessible to clients’ employees. Support activities include: –Finance and administration –Human resources –Technology development

Electronic Data Interchange (EDI) EDI is a computer-to-computer transfer of business information between two businesses that uses a standard format. The two businesses that are exchanging information are called trading partners. Firms that exchange data in specific standard formats are said to be EDI-compatible.

Electronic Data Interchange (EDI) The business information exchanged is usually transaction data; however, it can include other information related to transactions, such as price quotes and order-status inquiries. Transaction data in B2B transactions includes the information usually on paper invoices, purchase orders, requests for quotations, bills of lading, and receiving reports.

Early Business Information Interchange Efforts In the 1950s, information flows between businesses continued to be printed on paper. By the 1960s, businesses had begun exchanging transaction information on punched cards or magnetic tape. In 1968, a number of freight and shipping companies formed the Transportation Data Coordinating Committee (TDCC) to create the TDCC standard format.

Electronic Marketplaces and Portals As the Web emerged in the mid-1990s, many business researchers and consultants believed that it would provide an opportunity for companies to establish information hubs for each major industry. These industry hubs would offer news, research reports, analyses of trends, and in-depth reports on companies in the industry. In addition to information, these hubs would offer marketplaces and auctions.

Electronic Marketplaces and Portals Because these hubs would offer a doorway to the Internet for industry members and would be vertically integrated, these planned enterprises were called vertical portals or vortals. As with many electronic commerce predictions, the prediction that vertical portals would change business forever did not turn out to be exactly correct.

Industry Marketplaces The first companies to launch industry hubs that followed the vertical portal model created trading exchanges that were focused on a particular industry. These vertical portals became known by various names including industry marketplaces, independent exchanges, or public marketplaces.

Marketplaces

E-Government Although governments do not typically sell products or services to customers, they do perform many functions for their stakeholders. Governments also perform business-like activities; for example, they employ people, buy supplies from vendors, and distribute benefit payments of many kinds. The use of electronic commerce by governments and government agencies to perform these function is often called e-government.