Supply Chain Management

Chapter 18 : E-Business and the Supply Chain

Impact of Internet on a Supply Chain

Impact of E-business on Supply Chain

Revenue Impact of E-Business Cost Impact of E-Business
Cost Disadvantage of E-Business

Types of E-Business Applications

E-Commerce
E-Procurement
E-Collaboration

Implementing the E-Business Proposition

Start with an Enterprise Wide Strategy Driven from the Top
Removing Bottlenecks in Information Flow Integrating Business Processes with Trading Partners.

Chapter Summary

E-business is a collection of business models and processes motivated by Internet technology. Its focus is on the improvement of extended enterprise performance. E-business can help firms to share information across the supply chain and respond to changes in a range of variables like customer demand, and shortages at customer and supplier levels etc. Using e-business, can implement supply chain concepts more effectively.

Supply chain concepts include information sharing, cross enterprise collaboration, mass customization, outsourcing, partnerships and strategic alliances. The Internet is an ideal medium for carrying out many of the supply chain operations because of the many advantages it has over other communication media. In this chapter, we discussed the impact of e-business on the supply chain from revenue and cost perspectives.

Some of the revenue maximizing opportunities that e-business offers are provision of direct channels to customers, round the clock access to customers from any location, possibility of aggregating Information from various sources, provision of personalization and customization features, possibility of faster time to market, and flexibility in allowing price and service discrimination.

Later we looked at the impact from a cost perspective. Some of the cost minimization opportunities brought about by e-business are reduction in handling, processing and facility costs, improvement in information flow, possibility for movement of digital goods and scope for product differentiation postponement. Then we examined various types of e-business applications that are used in supply chain operations.

There are three key types of e-business applications: e-commerce, e-procurement, and e-collaboration. E-commerce is concerned with the order fulfillment process where the applications help in coordinating activities among the trading partners in order to fulfill the customer demand.

E-procurement enables the purchasing of the components and raw materials over the Internet. E-collaboration enables the firm to share information among the supply chain members. Finally we looked at the process of implementing the e-business proposition.

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