B2B ecommerce can help improve the supply chain management and save costs http://www.essindia.

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A B2B ecommerce takes place when large numbers of buyers and sellers meet at a common virtual market place. Here, both the seller and buyer are business enterprises and not end consumers. A B2B initiative needs a robust infrastructure to support the supply chain process of multiple businesses. A typical supply chain includes activities such as production planning, purchasing, material management, distribution, customer service and sales forecasting. These functions are important to all the entities involved in a B2B ecommerce, whether it is a manufacturer, a wholesaler, a service provider and so on. The introduction of internet technologies in supply chain has helped businesses in reducing costs, improving data accuracy, streamlining business processes, accelerating business cycles, and enhancing customer service. For instance in the transport sector, shippers, freight forwarders and trucking firms can exchange documents electronically thereby omitting the monetary and time investment required by the traditional document delivery systems. B2B e-commerce enables businesses to manage the complex movement of products and information between businesses, their suppliers and customers, with more flexibility. E-commerce allows customers to access information on product, prices, delivery orders, shipments, payment of freight bills etc. With the information available on a B2B ecommerce website, customers get detailed information about the products a company offers and also where they can actually conduct business with the company. Hence, these B2B ecommerce web sites provide a global, self-driven system for customers.
With e-commerce companies are taking a substantial step forward by providing customers with a faster and easier way to do business. E-commerce allows users to establish an account and obtain real-time information about their order and due shipments. Facilities to create and submit bills of lading, a cargo order, analyze charges, submit a freight claim, and carry out many other functions can be provided in a B2B ecommerce. In critical cases, Ecommerce even allows customers to track shipments to the individual product and perform

other supply chain management and decision support functions. All these supply chain functions and transactions performed over a network are secured by encryption. B2B Ecommerce indirectly helps in building companies' business and enhancing shareholder value. Thus, adapting to the ecommerce in supply chain can actually accelerate the business growth.

Supply Chain Management: Setting Up B2B Where It Matters

By Perspectives | Nov 18, 2010, 10.00am | 0 Comment

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Good supply chains arent always dynamic. Supply chains for businesses with unique products are very different from supply chains for businesses based on unique processes. The two approaches cant coexist. In fact, some business models thrive on efficient, not dynamic, supply chains. This article explores how business models impact supply chain management, focusing on either the demand side or the supply sidenot both, which is ineffective. New Rules for the Supply Chain Until recently, Nokia epitomized supply chain excellence. Nokias modular products are designed so that suppliers can be swapped on the fly. AMR had awarded Nokia the best supply chain three times in a row. However, in 2011, Nokia was no longer even ranked among the top 25 companies, and a very different example of supply chain management is leading the pack.

For the last few years, Apple has been recognized as having the best supply chain, even though its supply chain is not as intricate as Nokias. Apple has dedicated suppliers because its products are designed to be unique. This article shows that a companys optimal supply chain depends on how it differentiates itself in the marketplace. Identity Crisis The dichotomy of Apples captive supply chain and Dells dynamic supply chain highlights the fact that companies focused on products and companies focused on cost have different supply chains and different business models. Apple has fewer suppliers, and its supply chain is tuned to a very different business strategy. It will never emulate Dell. And Dell will not survive if it tries to be Apple. Neither Apple nor Dell needs to choose a strategy; their business models chose it for them. However, businesses in the middle need to make a choice to move toward either concentration of labor (uniqueness) or division of labor (standardization). Companies that attempt to stay in the middle have an identity crisis.

Figure 1. How companies differentiate has implications for the supply chain Demand Side or Supply Side? With companies that compete on cost, products are typically price takers (the market sets the price), and they respond to market prices using a flexible cost structure. They are not price makers (who set their own prices with little or no regard for the market). Price takers need standard components that can be supplied by multiple sources. Manufacturers can swap suppliers with every assembly to hedge price pressures. With a differentiated product that can dictate its price in the market (e.g., the Apple iPhone), the supply chain model is very different. Apple gets its

iPhone multi-touch screen controllers from Broadcom, which makes them to Apple specifications. This type of supply chain strives for just-in-time delivery through demand and inventory management, but without changing suppliers frequently. Such companies differentiate on high brand equity. Typically, such a company uses B2B to extend brand merchandise using affiliate products. iPhone apps and iTunes are examples. Boeing has B2B exchanges to sell merchandise under the Boeing brand, connecting suppliers directly to its customers and channels. In some models, B2B integration with distribution is core to the business. Nestle, for example, sells products to cafs by connecting kiosk-branded franchises to their B2B service, selling 94 billion cups of coffee annually.

Figure 2. Business model drives application of B2B Any business that tries to focus on all of the roles shown in Figure 2 is likely to have an ambiguous business strategy. Aligning IT with the Right Process Today, every supply management system is pursuing a just-in-time (JIT) philosophy. Manufacturers try to increase inventory turnover and decrease inventory levels. No matter how simple it may sound, in reality, those two metrics (turnover and level) are a function of factors like availability of supplies and the opportunity cost of missed demand. As buyers pursued JIT, suppliers learned to support it. Modern supply chains are looking at suppliers to drive JIT within the buyers business. Inventory replenishment shifts to the vendor. Events tell the vendor when to replenish. Suppliers capture the events to determine the delivery quantity and time. It is like a managed service in procurement, with the vendor functioning as the buyer. This practice, called Vendor-Managed

Inventory (VMI), plays an important role in shaping the two supply chain strategies weve discussed. In fact, VMI is currently the most common form of B2B, with a tight linkage between buyer and supplier. The other form of B2B, which involves dynamic aggregation of multiple suppliers through an exchange, has yet to evolve outside of a few industries, such as steel. Because VMI is being adopted so rapidly, well take a look at VMI in its simplest form. VMI offers two types of process integration: forward and backward integration. To select an approach, decide whether the business intends to engage VMI vendors or become one. A firm might become a VMI vendor so that its distribution channels keep minimum stock of products. Its a choice between lean procurement and lean distribution. You may ask why they cant coexist. We argued earlier that companies differentiating on uniqueness of product are more likely to find B2B useful in distribution and merchandising. On the other hand, companies that compete on cost find B2B more effective for sourcing. The former is demand side (lean procurement) while the latter differentiates on the supply side (lean distribution). Forward Integrate if You Are a Demand Side Player Lean distribution means a firm is responsible for replenishing stocks of its distribution channels in a timely fashion. It should put triggers in the channels system to pull stock from its own inventory. Nestle serving 94 billion cups of coffee annually through its Kiosk franchises is one example. Such a system makes the firm act as a VMI vendor to its distribution channels. To replenish stocks in a timely way, there needs to be a sufficient quantity of finished goods as a buffer (for example, the Root mean square of all Minimum Order Quantities in each channel outlet). The business has to keep a minimum buffer at a minimum and align its capacity to compensate for the buffer quickly. Typically, the bottleneck in this model lies in the connection between procurement planning and inventory in distribution. Backward Integrate if You Are a Supply-Side Player Conversely, if youre a supply-side player, creating a system using VMI vendors is important. As explained earlier, VMI vendors manage procurement on your behalf; your systems should support that through events that notify vendors when inventory levels need to be replenished. The VMI model on the supply side usually has the problem of setting triggers not closely connected to demand forecasts. The bottleneck exists between the VMI vendors estimate of demand and the buyers.

The system integration for such an operating model is quite the opposite of the demand-side players model. Instead of forward integrating, the firm should work backward. The information needs to be pulled from CRM analytics systems into procurement systems to set accurate triggers. These two integration approaches have numerous contrasts, as summarized in Table 1. These approaches cannot coexist; you have to choose between them. When a company has a demand-side business model and chooses a backward integration approach, business and IT alignment fails right there.

Table 1. Positioning VMI Setting your B2B strategy can be as simple as deciding whether you differentiate on product uniqueness or cost. Both are valid approaches with real implications for how you optimize your supply chain.

What Is the Role of the Internet in Supply-Chain Management in B2B?

http://smallbusiness.chron.com/role-internet-supplychain-management-b2b32705.html
by Bert Markgraf, Demand Media

The Internet makes supply chains more transparent.

Related Articles

What Are the Four Elements of Supply Chain Management? Importance of Forecasting in Supply Chain Management Supply Chain Management Vs. Customer Relationship Management APICS Basics of Supply Chain Management About Supply Chain Management Systems The Advantages of the Supply Chain Management for Small Companies B2B supply chains have partially migrated to the Internet, as online marketplaces reduce the cost of both supply-chain management and the carrying out of supply-chain functions. A key to the reduced cost is Internet-based, generally available information that increases the transparency and speed of transactions. Members of supply chains can quickly and reliably find the specific information they need to complete an exchange of goods or services, and receive rapid payment.
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Procurement
The Internet reduces the cost of purchases by giving supply-chain partners quick access to information about sources, availability, pricing and technical data. Members of the supply chain must cooperate in making this information available online, possibly in secure folders only accessible to account holders who are supply-chain partners. Once information required to make a purchase is available online from several sources, procurement is more efficient because the best source can be identified more quickly. While the actual prices paid do not necessarily diminish, the cost of the procurement transactions is lower.

Supply
On the supply side, the most important role of the Internet is to greatly increase the size of the accessible market. Suppliers using the Internet to market their goods and services can sell world-wide. With the Internet's greater transparency regarding pricing, suppliers have lost some of the strategic levers that allowed them to cultivate preferred accounts with higher margins. The ability of competitive suppliers to achieve greater sales volumes balances this disadvantage. Once the supplier has found a customer, he benefits from similarly reduced transaction costs as the purchaser, because completing the transaction is quicker and more efficient.

Direct Transactions
For supply chains in general, the role of the Internet has been to reduce the power of intermediaries. Suppliers can offer their products and services directly to customers, and purchasers can find what they need directly from producers. This disintermediation has simplified supply-chain management by making real time data on changes in demand and supply available to the markets, rather than having the information filtered through re-sellers. This trend has been especially pronounced in B2B transactions, while intermediaries remain more important in retail.

Collaboration
While supply-chain management through the Internet is still in its infancy, the possibilities exist for even closer integration of supply and procurement functions. Suppliers are interested in having a high, predictable sales volume, while purchasers are looking for a reliable, lowcost source. Companies can satisfy both goals by providing data on production and on procurement needs to each other under long term relationships. The resulting high, steady volume allows the supplier to offer his products at lower cost, while the purchaser benefits from this cost reduction and receives a reliable supply.

B2B eCommerce and Supply Chain Management

http://www.clarity-ventures.com/articles/article/499/b2b-ecommerce-andsupply-chain-management-integrating-erp-crm-for-supply-chain

In a B2B eCommerce transaction, the buyers and suppliers are enterprise businesses. This often means that certain parts of the B2B infrastructure, like the supply chain management process, must be even more robust than a business-to-consumer eCommerce store. Read below for an introduction to supply chain management from our B2B eCommerce development company.

Supply Chain Management for B2B eCommerce

The supply chain process for multiple businesses can be quite difficult to manage. Challenges inherent in supply chain management for B2B eCommerce include production planning, purchasing, material management, distribution, and more. From wholesalers to manufacturers, every point of the supply chain management process is a critical one for successful B2B eCommerce. B2B eCommerce technology solutions are a critical component of this process.

Integrating ERP, CRM, and Supply Chain Management

By automating the processes used for sales, support, order tracking, shipping integration, and more, you can reduce the likelihood that important information or details will be lost along the supply chain management process.

One of the easiest ways to ensure a smooth and flawless B2B eCommerce supply chain management process is to integrate your ERP, CRM, and supply chain management systems. By automating the processes used for sales, support, order tracking, shipping integration, and more, you can reduce the

likelihood that important information or details will be lost along the supply chain management process. While supply chain management and customer relationship management relate to two different processes, they are actually very similar; and integrating the two will maximize the functionality of your B2B services.