Keywords: Business-to-business, E-commerce, Internet, Inter-organisational information

systems, Manufacturing, Hong Kong

Oliver B. Yau, Flat G, 6/F, Block 21, 8 Laguna Verde Avenue, Hung Hom, Kowloon, Hong Kong Tel: +852 90170009, Email: oliver@hongkong.com

Adoption of Business-to-Business Electronic Commerce: A Case Study of a Hong Kong Jewelry Manufacturer
Abstract: This paper describes the adoption processes of business-to-business (B2B) electronic commerce (e-commerce) by Noble Jewelry Limited (Hong Kong), a jewelry manufacturer. By using a website of Noble Jewelry Limited (Noble), iJewelry.com, a B2B e-commerce platform that links Noble with its customers and suppliers, the driving force for B2B e-commerce adoption changed significantly and rapidly. Starting with the initial objectives of achieving cost savings and improving operational efficiency by adopting B2B e-commerce, Noble later becomes driven by a desire to strengthen customer service and improve supplier relationship. This paper outlines how the later objectives are achieved by re-designing internal operation procedures and the information flow between Noble and its customers and suppliers. This results in reducing the cost of communication, shortening production lead-times, improving customer services, and strengthening supplier integration. Logistics and supply chain systems are quickly developed into highly efficient business networks when B2B e-commerce is adopted.
Received: January 2003

Introduction
In order to adapt to the competitive manufacturing environment, a manufacturer needs to be able to produce multiple and diverse products, upgrade and redesign its products in short life cycles, and execute efficient production changeovers simultaneously[1]. Facing the pressures from globalization, particularly in shorter product life cycles and over-supplied manufacturing environments, manufacturers need to provide more value-added services to their customers[5,8,10,15,21]. On the other hand, fast and flexible low-cost data processing and information systems have transformed business operations. Recent globalization and competition is forcing many companies to undergo reorganisation and restructuring in an effort not only to compete but in many cases just to survive. The adoption of B2B e-commerce and the capability to keep pace with the changing manufacturing environ-

ment are particularly important to the success of manufacturing business in the global markets[4,6,7,12,13,16]. A review of the related literature reveals that, although there has been considerable research on the subject of Internet and e-commerce, insufficient attention has been devoted to the process of B2B e-commerce adoption in manufacturing industries. This paper considers a case of made-to-order manufacturers and the role of adopting B2B e-commerce to cope with mass customisation. The results of a case study on these issues will be discussed and analysed. The study focuses on Noble Jewelry Limited and is concentrated on the jewelry sector of the manufacturing industry, where traditionally made-toorder manufacturing arises. Following the Yau[19] examination of both the process of B2B e-commerce adoption and its impact on business operations from the viewpoint of a high-value jewel-

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ry manufacturer in Hong Kong, this paper considers problems and proposes solutions to jewelry manufacturers who want to adopt B2B ecommerce in Hong Kong. Noble Jewelry Limited (Noble) specialises in the designing, manufacturing and exporting of high-value jewelry. The Noble headquarters are in Hong Kong since 1980s and its major manufacturing facilities are located in China. Given its production sites in China and customers and suppliers from many countries, information regarding order status, production status, material requirement, wastage control, and resources planning is critical but at this time inadequate. To cope with inadequacies in the management of information Noble proposes to implement an integrated manufacturing information system, which provided a real-time monitoring function through the integration of B2B e-commerce system with its existing Oracle enterprise resources planning (ERP) system. This paper first presents an analysis of the knowledge and experience gained from applying a B2B e-commerce system in Noble, and then an analysis of proposed solutions.

A conceptual framework for B2B-EC adoption in manufacturing industries

As manufacturing environments become more complex and competitive, the need for tools to assist in business-to-business collaboration becomes greater. One of the biggest opportunities and challenges faced by manufacturing companies in the 21st Century is the deployment of B2B e-commerce (B2B-EC) with web-based technologies. As a new channel for business transactions, B2B-EC may contribute fresh sources of revenue and opportunities for manufacturers with carefully structured strategies.

Networked B2B-EC applications, especially on the Internet and through inter-organisational information systems, have resulted in many changes in the way B2B transactions can be carried out. Benefits from such approaches include rapid data exchange, low inventories and quick response times. All these require a high degree of interaction and some degree of system integration between supplier and customer[4]. A key challenge for B2B-EC is to overcome the difficulty in data interchange between supplier and customer. Traditional ways of B2B commerce, such as by electronic data interchange, seem beyond the resource capacity of many small and medium-sized manufacturers, but it is often a requirement for doing business with a large company. The innovative B2B-EC provides a means of achieving a desired degree of interconnectivity without a huge investment of time, money and sophisticated technology. The diagram below shows the environment manufacturers are currently facing (see Figure 1). The significance of the general nature of Internet based B2B-EC is clearly highlighted in the management literature[3]. It may replace some of the traditional forms of activity in the manufacturing supply chain. One great advantage to the manufacturers is that the information exchange between them and their customers and suppliers can be direct and quick. A manufacturer can design, develop and deliver products its customers quickly. This in turn may allow a manufacturer to move away from a productionoriented culture to a customer-focused one. Such focus may remove the need for a manufacturer to hold a large stock of finished goods, thus avoiding the problem of being left with obsolete stock in an environment of fast-changing consumer products.

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Figure 1: The changing manufacturing environment[19]

The potential benefits of B2B-EC include online communication integrated with the information systems of business partners, which will lead to customised products and services, a more diversified global market, better understanding of customer needs, accurate, real-time information exchange and cost-efficient productivity. In future, B2B-EC may influence supply chain systems in various ways. First, it can be used as a fast and efficient means of communication between companies in the whole value chain. Customer orders, order confirmation, transport booking, invoicing, may increasingly use B2BEC. The same applies to planning information sales forecasts, production plans, up-to-date

sales figures, and stock levels, for example that may be accessed on-line by strategic partners[18]. According to Lucking-Reiley and Spulber[14], expectations about productivity gains from B2BEC can be usefully divided into four areas: 1 possible efficiencies from automation of transactions, 2 potential economic advantages of new market intermediaries, 3 consolidation of demand and supply through organised exchanges, and 4 changes in the extent of vertical integration of companies.

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The power of B2B-EC is that it allows a manufacturer to reduce costs, and, even more importantly, manipulate information from all sectors along the chain to exploit growth opportunities[11]. A conceptual model of B2B-EC for manufacturing industries illustrating the improved relationships of manufacturers and their strategic partners by improving information exchanges that streamline the manufacturers business operations is outlined in Figure 2.
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Methodology
According to Yin[20] (p.87), participant-observation is a special mode of observation in which the researcher may not be a merely a passive observer, but may undertake a variety of roles within a case study and may actually participate in the events being studied. Participant-observation provides certain opportunities for collecting case study data, but also involves major problems[20] (p.88). The researcher can also gain access to

Figure 2: A conceptual framework of B2B-EC for manufacturing industries (Yau, 2002)

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events or groups that are otherwise inaccessible to scientific investigation.

Semi-structured interviews and data collection

Data were gathered from several semi-structured interviews with members of the management board of Noble in January to February 2002. The interview questions were derived from the literature as discussed in the conceptual part of the paper[19] (see Appendix 1). The interviewees were the chief executive officer (CEO), the executive director, the director of operations, and the general manager. They were selected on the basis of their roles in the adoption of B2B e-commerce and their experience and
Figure 3: Website

knowledge of information exchanges between Noble and its customers. On completing each interview, a report was written and sent to each interviewee for checking for his/her review and clarification. This ensured the quality and validity of the responses. Information was also collected from secondary sources. A variety of published and unpublished printed materials were collected including email, memos, letters, press releases, company reports, financial reports, case studies, catalogues, and Internet-based marketing information. Information about Noble has been obtained from the websites located at http://www.iJewelry.com (Figure 3) and http://www.noble.com.hk.

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The case study

According to Sekaran[17] (p.128), case studies involve in-depth, contextual analyses of similar situations in other organisations, where the nature of the problem and the problem definition happen to be the same as one experienced in the current situation. Manufacturing companies differ in the way they meet their customer demand. Some companies deliver products to their customers from finished-goods inventories as they anticipate customers orders; others, however, manufacture only in response to customers orders[2]. For the high-value jewelry industry, most of the products are unique in terms of design, manufacturing process and technological requirements, and precedence constraints. These manufacturers typically do not hold a finished goods inventory. After the customer order is received, design and manufacturing activities will be started as the lead-time required to complete the orders is high. The processing time is highly uncertain because most of the processes are still manual. This high level of uncertainty, with respect to routings and processing times and uncertainty of customer orders, results in the production planning and control being difficult. In all the above cases, it is very difficult to predict customer requirements and specifications, so keeping a finished goods inventory is not possible. All the above factors increase the complications involved in managing long lead-time manufacturing systems.

3 What are the procedures of adoption? 4 What are the problems faced during the adoption process? 5 How are they dealt with? 6 What feedback comes from users before and after adoption? 7 What are the results of adoption? 8 What are the recommendations that follow? Traditional production in the jewelry industry is characterised by mass production with mostly standardised designs. The trend of globalization in recent years has changed the traditional focus of jewelry production from mass production to mass customisation. Each jewelry item maybe unique and may have its own characteristic difference even within the same design. As a jewelry manufacturer, Noble also faces the same situation like other counterparts. Jewelry manufacturers suffer from extreme irregularities of customer demand and can have a long lead-time from quotation stage to receiving a definite order. This lead-time sometimes can be two months or more. While holding high stock to satisfy customer demand, Noble also needed to hold high component stock to cover for manufacturing hold-ups. As a consequence, Noble held a high level of inventory stocks and operation efficiency was lower. In order to achieve competitive advantage through higher levels of customer service, Noble focused its improvement strategies on integrating its supply chain in order to maximize the efficiency of all internal and external operations.

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Research Questions
This case study examines the following questions: 1 What are the special features of B2B for the jewelry industry? 2 How are adoption plans developed? Why this way?

The research sequence

In general, many articles have commented on how B2B e-commerce can be used as a tool to reduce costs and gain competitive advantage[3,14].

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Without exception, these articles provide theoretical frameworks to explain how B2B e-commerce will generate benefits. Noble takes the responsibility for the design and specification of products, the sourcing and purchasing of materials relative to the customer, and other logistics issues. In some cases the customer provided the design and the materials while on other cases everything was left to the manufacturer. The CEO believed that what won orders for jewelry were competitive price, speed and reliability of delivery, product quality, flexibility in volume and product changes, and customised design. For Noble, flexible manufacturing operations helped to achieve shorter production runs which was a common goal. Additionally, advance notification of production status gave a sense of confidence and reliability for their orders to Nobles customers. In general, closer relations with vendors and customers allow more efficient production scheduling and faster response. The CEO summarised the challenge: Manufacturers must make today what customers will need tomorrow.

ed to take a systems approach and form a strategic plan to broaden the use of B2B e-commerce and to include the Internet as a medium of information exchange with major business partners. From the beginning, Nobles objective was to integrate intranet, extranet and Internet applications as much as possible. Therefore, Noble maintained only one server as both intranet- and Internet-server. The backbone for all applications was Nobles self-developed ERP system based on Oracle 8i, and was based on several Oracle relational databases that were distributed on two database servers located in Hong Kong. The majority of Nobles Web pages were created dynamically on demand and provided up-to-date information from these databases. All Noble intranet and Internet applications were integrated and accessed the ERP system as a backbone.

The website
Having started in 1998 with a pure information server providing general corporate information and an electronic product catalogue, they continued to extend its Web services. It added product showroom functionality in late 1999 and after March 2000 offered an auto-quotation and online ordering module. This setting up of a comprehensive website to provide information about the jewelry industry, products, and services was the first step in Nobles plan to adopt an Internet-based e-commerce application. With a focus on both its customers and suppliers, Noble developed information on its Web page which concerned specific issues such as jewelry consignment, order status, and detailed product information from December 2001. The objective of the iJewelry.com website aimed to become a portal of B2B e-commerce for the jewelry industry (see Figure 4).

The development of B2B e-commerce system

Staff in Noble began discussing using the Internet for B2B e-commerce in early 1999. They expected this could provide a low-cost communications medium and Internet technology would permit a more interactive and easier way to communicate with its customers and suppliers. This approach was expected to provide Noble with an alternative to the traditional way of data exchange by high-cost, VAN-based EDI. They also had concerns about security and speed of transmission and these made Noble cautious about using this new medium. The management in Noble decid-

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Figure 4 iJewelry.com website

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Tracking and tracing by VIP entry

Through the iJewelry.com platform and by means of username and password, authorised customers could gain access to individual order information. Lists of all quotations, outstanding consignment, sale order history, and statements of current production status were displayed individually for each customer. Status for each order in progress could be indicated, including whether the system was already assembled, and if the corresponding parcel had left Noble. All production steps from order acceptance to packaging were displayed. This transparent process was

thought to make customers feel more convenient and to improve Nobles relationship with customers. Given that Noble maintained only one database, customers using the Internet accessed the same database as accessed by Noble employees. A Web request was always a database request. The only difference was in the result/output of the submitted query. Hence, the database had to be user-sensitive; the information that was presented depended on who made the request. Noble distinguished three kinds of users, B2C (business to consumer) customer, VIP (B2B)

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customer and employee. After checking an individual username and password with the internal database, the system delivered an electronic product catalogue that displayed prices according to predefined conditions, available in Nobles ERP system.

The design process and customisation

The design department comprised two sections, namely original design creation and design simulation. The work of original design creation started by a strong interaction with both the warehouse and the purchasing departments. The material requisition report was generated by the ERP system. The purchase work started as soon as raw materials were needed and ordered from suppliers in order to fulfill the material requirements of certain series of jewelry. The purchasing department communicated the delivery times for raw materials to the design department to enable them to plan the jewelry manufacturing. The database of material codes was also released to the warehouse to gain the materials necessary to produce orders. After the approval of an original design, the actual creation would be handed over to design simulation. The cooperation between design and purchasing was continued in this phase of design, as the feasibility of a new creation was not just a matter of market potential. Feasibility also needed to check the availability of raw materials of the right quality and suppliers with sufficient reliability. For this reason, Noble purchased only from appointed suppliers from within Hong Kong or directly from their buying office in India. During the process of jewelry design some computer aided design systems (such as JCAD and Jewelry CAD) were introduced so that many of the detailed attributes in the design process

were removed. The computer aided design systems were integrated with computer aided manufacturing systems so that the designs could be automatically translated into plastic moulds by the prototyping machines (such as Model Maker II, Pattern Master). The design process could be significantly enhanced through the participation of customers. The customers could bring their design ideas to Noble and this was considered an input to the product development. In some cases, designers from Noble could send the design image or file to customers for comment and approval, enabling product designs that effectively met the needs of the customers. This close communication with customers allowed Noble to develop customer-oriented service and customised products. One object of this close co-operation could be the development of better and more long-term manufacturer-customer relationships. Products designed by Noble not only could meet current customer needs but could be saved or modified to meet the future needs of those customers. Many of Nobles designs were focused specifically on an individual customers requirements. In most cases product design needed to be closely integrated with the production process. The need for fast and effective design meant that the traditional approach of having all new products routed and tested through a design area had to be eliminated, as this centralised approach led to delays, misunderstandings, and a lack of co-operation between the design area and the production floor. The design process needed to be integrated with the manufacturing process to diminish the impact of these issues. Products could be modularized to allow configuration rather than the separate design of each product, thus simplifying the design process.

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Production status and process control

The choice on the level of product customisation had direct implications on the delivery lead-time Noble could provide the greater the degree of customisation, the longer the delivery lead-time, as more activities had to be performed after receiving the order. Before the adoption of B2B ecommerce, the production schedule was manually adjusted for outstanding production orders according to the change of customers requirements and delivery time. One most significant difference between Noble and other traditional jewelry manufacturers was Nobles consistent use of a computerised systems for process control. Technical and technological advances in operation also could improve efficiency, productivity, and quality. The complicated process and operation procedures were standardised and recorded by the ERP System and all information on every material such as precious stones (diamond, ruby, emerald, etc.), metal (18 karat gold, Pentium 900 or silver) and other materials was also standardised and recorded as bills-of-material. All key point of the operation process was recorded in the system, which could show who carried out which process at what period of time, how metal and stones were used, and how great the wastage during the production process was.

Resource and capacity planning

To reduce the costs associated with unexpected rescheduling, a mechanism needed to be established for the early detection of potential problems. Such problems included the unavailability of raw material and production over-capacity. The resources planning module under the ERP system was adapted to enhance higher productivity through scheduling improvements that enabled

prior checking of materials and routings. The availability of resources such as production capacity and materials then could be assessed before a job was assigned to the production process. In a traditional jewelry business, each party to the overall process (supplier-manufacturer-wholesaler) is responsible only for its own resource planning. An inter-organisational system of deploying resources is non-existent. This may lead to over- or under-estimation of the need for resources. Nobles integration with major business partners promoted an overall resource planning. This overall planning could help to estimate the necessary resources accurately and better search for the appropriate resources and hence organise and manage the resources more effectively. Portfolios of resources that supported the manufacturing and distribution activities could then be established. The full product range could be planned, produced and transported to the customer within customer-acceptable delivery time. This also meant that the production could be directly controlled by customer orders and the finished goods inventory could be kept minimal. From the administrative point of view production orders were generated at the location where the actual production took place, but headquarters carefully controlled the entire inventory/material flow. The headquarters was kept informed about the progress during processing in the China plant and when a batch of products was completed, this was reported to headquarters and the products transferred to Hong Kong. The system provided the status of each manufacturing process based on the progress along the manufacturing and delivery routing. From the information that the system received from the

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routing, it would determine if the routing was available to receive further assignment. A routing might have enough capacity left to meet a demand but still be considered as not available for assignment if any capacity within the routing formed a bottleneck. The information on production status and capabilities was easily accessible in the ERP system. As a high-value jewelry manufacturer, Noble needed proper management and control of inventory. This was crucial to the success of business. Investigation of the stockholding situation revealed that approximately HK$35 million was tied up in the low usage and obsolescent stocks. This locked-up capital might explain the stock turns as low as 1.5 per year that Noble had been experiencing. Traditionally, product specifications were viewed as discrete tasks performed by salespeople and product engineers respectively. The salesperson identified a customers requirement and then liaised with product engineers and production planners to produce a product specification and quotation. Unfortunately, this process was both time consuming and error prone, with a high potential for miscommunication of requirements and misinterpretation of product information. By providing customers (at home or abroad) with a new way for product specification, Noble enabled the customers to configure product requirements for their specific orders. The system automatically validated the usage requirements and translated these into material codes. Regular weekly orders could be sent as product codes with required quantities through the Internet directly to Nobles order-processing system. Noble re-processed the product codes in a factory phase of the product specifications to produce the bills-of-material list of standard assemblies required to meet the order. Assembly and

shipment could be within days. Every month, Noble sent an electronic update via the Internet with the latest products and options for the product specifications. Instead of make-to-stock that dominated in the past, it was replaced by maketo-order.

Supplier interface and just-in-time purchasing

Information exchange between supplier and manufacturer is now more open and extensive than in the past. Co-operative planning efforts are more common in major industries than in the jewelry sector. In the early stage of adoption, the situation of B2B e-commerce with suppliers did not help to improve the relationships with the suppliers. Noble believed in a traditional approach to manage suppliers, insisting that suppliers met irrational demands at short notice, or Noble could look for other suppliers. Information given to suppliers was of little help to suppliers in planning their own production and stockholding. The poor communication between the two parties resulted in a common practice by Noble to order materials at short notice, with suppliers suffering the shock demands placed on them. Noble had almost 80 suppliers. Of these 20 were used every month, with only 10 using Nobles scheduling module under Oracle ERP system. Some materials had only one possible supplier, which could have caused difficulties regarding guarantee of supply, particularly as Nobles collaboration with selected suppliers was not ideal. The traditional way of managing suppliers meant that unpredictable orders were being placed on suppliers at short notice, leading to guesses by these suppliers in predicting Nobles requirements when planning their own production and stockholding. The management of Noble realised that no
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stock control solutions would be effective without substantial input from suppliers. The next focus became that of improving supplier relationships to help gain this input. Discussions with suppliers provided information about their requirements and capabilities in responding to Nobles needs. The aim was to provide suppliers with as much useful ordering information as possible, thereby allowing them to plan in advance and control their own production. This led to the design of a new schedule format that provided more accurate information about past demands and expected future requirements. The new control strategies were then discussed in detail with suppliers in order to determine the impact on both parties and the associated benefits. As a result of the continuing system improvement by Noble and the collaboration with its suppliers, communication was strengthened through more frequent exchange of information. Suppliers became more willing to respond to Nobles demands as they had a clearer idea of customers demands. This new scheduling procedure was initially introduced to 10 selected suppliers that controlled 50 per cent of the purchased items covering between 200 and 300 material codes in the Noble schedule. Success have led to the partnership approach to scheduling being implemented with 15 major suppliers. This covered approximately 65 to 70 per cent by value of the purchased items. Benefits for suppliers included more reliable schedules, reduced finished goods stocks, increased visibility of customer requirements and a more accurate understanding of the true customer demand. For Noble, benefits included increased customer service levels, reduced stocks, increased stock turnovers, improved delivery service from suppliers and an overall minimized risk of running out

of raw material stocks. An ultimate aim for Noble was to achieve justin-time purchasing, with raw materials being ordered from suppliers as these were assessed from customer demands. For this reason, Noble redesigned the flow of supplier interface by the system integration B2B e-commerce and the ERP system. A material-requirements summary was generated from the Oracle ERP system on a weekly basis and sent out to major suppliers. Because of the B2B e-commerce system quotations were received from material suppliers within minutes or hours rather than days. By speedy data transmission the system enabled Nobles purchasers to focus more on the strategic task of pricing negotiations rather than attending to repeated clerical work such as data entry.

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The process of B2B e-commerce adoption

The process of B2B e-commerce adoption proved to be complex and difficult. The issues of system design and the need for standard operation flow proved difficult activities, especially when there was no strong commitment from business partners. In addition to these technological issues, complexity of the operating procedures with business partners, which involved differences in business practice and system integration, also needed to be considered. Initially, the need to improve current business processes by adopting a new way of doing business that achieved significant savings and improve efficiency was the major motivation in Noble. As the Internet increased in popularity, major customers began to demand or expect to use this approach in business. Noble responded by setting up a system integrated with its existing ERP system, hoping that this would provide a significant competitive advantage as well as

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bringing Noble to its customers. Although the first objective was achieved, the second one was not as successful. Noble did manage to achieve closer links with some of its customers, but this strategy did not work equally well with all business partners. Different technologies have different levels of complexity, which may affect the success of adoption. In this case, Noble needed to learn and adapt to the new technologies. The more complex systems such as B2B e-commerce system demanded far greater effort during the system integration with other NT-based and Unix-based ERP systems. Since both NT-based and Unix-based computer networks were used in Noble for internal business processes well before they were extended to inter-organisational activities, compatibility problems in terms of both hardware and software arose between existing systems and the new ones that were developed specifically for electronic trading. To make the existing systems compatible with B2B e-commerce, Noble created an infrastructure for new interfaces, as well as system integration with existing ERP system. The adoption of B2B e-commerce in Noble ultimately involved changes in the way the company conducted business. The management evaluated its existing business processes and addressed the impact of the adoption. Factors such as organisational structure, management practice, system feasibility, corporate culture, internal data flows, and applications affected, and trading partner relationships were all considered. Educating user personnel about how the company, as well as how individual employees, would benefit from the adoption was also critical. As with any organisational change, top managements visible commitment to the adoption

process played a key role in the process of B2B e-commerce being successfully adopted. Prior to the adoption of B2B e-commerce Noble needed to make minor changes to its hardware. While the network operated on several UNIX servers and these required no changes, communication links (in terms of modems and networks) needed to be upgraded. The network was upgraded to 256 kilobyte international private leased circuit (IPLC) lines for faster transmission. Noble had introduced just-in-time and material requisition planning models for its distribution and delivery requirements. These were integrated online into the B2B e-commerce system, which in turn reduced lead times to customers, and also from suppliers. This approach also helped to keep inventory levels low. Within the period of adopting B2B e-commerce, the researcher was involved directly in identifying, trouble-shooting, and training for information exchange concerns and with specifying, testing, and distributing customer and sales and management reports. In addition, the researcher interviewed several other board members in Noble who were involved with this project. The process of B2B e-commerce adoption in Noble addressed the need of a mainly manufacturing enterprise to reduce information processing time, improve information flow as a valueadded service, and enhance information exchange with business partners to reduce processing and distribution costs and also leadtime. In other words it dealt with enhancement of the information supply chain as an important entity in itself, performance and optimization of which had significant effects on the efficiency and performance of the manufacturing enter prise.

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Analysis of result
Noble established B2B e-commerce platform from which both Noble and its customers benefited. However, only a very small portion of Nobles incoming sales orders arriving over its Internet-based B2B e-commerce system. The majority of orders still came via telephone or fax. The main reason for this was usually the traditional purchase process on the customers side. The technical decision-maker used the Internet to find all information about the product, the leadtime or the price and then handed it over to a purchasing person. This purchasing person, being oriented to paper-work, preferred the traditional way of ordering via mail, fax or phone. From January 1999 Noble installed a fully integrated MRP system in the headquarters in Hong Kong and manufacturing facilities in China, and adopted a computerised inventory control system with sales teams at various locations outside Hong Kong. Noble exercised effective inventory control, by obtaining real-time information on each locations inventory level, transaction volume and inventory movement. In order to limit its exposure to gold fluctuations, Noble also maintained a minimum base inventory of gold that was replenished on a daily basis. The inventory had a 34% decrease and its financial cost was reduced by 60% in fiscal year 1999/2000. The case study has demonstrated the wide range of different contexts in which adoption of B2B e-commerce may have significant impact on operation performance and supply-chain management. The case study shows that there are potential benefits from the adoption of B2B ecommerce in the manufacturing industries. These include faster communication, cost savings and accuracy, reliability, closer supplier relationships, reduction in material inventories, fast and flexible

customer response, reshaping buyer-supplier relationship, improving core business processes, providing electronic intermediation, and reaching new segments and markets.

Conclusion
Many industries and markets require greater flexibility and speed from their manufacturers. The need to manufacture small quantities of highly customised products with high quality and reliable on-time delivery at a low cost is forcing companies to change from old ideas of mass production. To compete and thrive in a changing and unpredictable marketplace, companies need to adopt flexible manufacturing methods. These methods require highly integrated and flexible technologies of production, not necessarily hightech methods, but highly capable ones. To adequately address their customers fastchanging and focused needs, Nobles staff had to be highly educated and trained, and significantly empowered within the constraints of a clear vision and delineated company principles and goals. Noble itself had to have the ability to adapt to changes rapidly, have highly flexible management structures, and comprehensive methods of introducing change and prospering from it.

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Implications for business practitioner

Despite the profound interest of prospective managers and researchers, B2B e-commerce adoption in Hong Kong industries has a long way to go. The real challenge before Hong Kong managers is to establish priorities among potential B2B e-commerce techniques to achieve best possible advantage of system adoption in Hong Kong industries. For the adoption of the proposed infrastructure, companies could look at the entire chain

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and identify areas for revolutionary or evolutionary change. The significance contribution of this research is its concern with the provision of insights in the design of the infrastructure for building a supply chain information network, which allows easy sharing of data in distributed platforms. This proposed infrastructure is favourable to the enrichment of responsiveness and flexibility into the supply chain network using the latest distributed object technology and is expected to influence the design of the future supply chain information system to be deployed, particularly in manufacturing areas. Internet-based solutions need to focus on the whole process, including pre-transaction opportunities such as demand forecasting and inventory management, and post-transaction reconciliation and management analysis[11]. Adoption of B2B e-commerce is not just a technological issue. It also provides a new way of doing business and changes our traditional business models. The use of B2B e-commerce not only results in increased operational efficiency and effectiveness, but can facilitate the re-engineering of business processes as well. However, the benefits of B2B e-commerce cannot be realised without proper adoption strategies, both technical and organisational. Further investigation could test the feasibility of B2B e-commerce adoption in jewelry manufacturers, consider problems in the adoption process, and make recommendation to other manufacturers. The process of B2B e-commerce adoption can apply to many industries, not just the jewelry industry. Winthrop Publications Limited 2003

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Biography
Oliver B. Yau joined Objective Management Consulting (OMC) as Managing Director in January 2003. OMC, founded in 1989, is a Hong Kong-based consulting firm engaged in Enterprise Resource Planning (ERP) systems, accounting and taxation, corporate governance, and ISO consulting and implementation. OMC is one of the leading local consulting firms in Hong Kong. Prior to that, Oliver worked with many major manufacturing companies in Hong Kong as Director of e-Business, Financial Controller, and Management Accounting Manager. Oliver holds a Master of Business Administration (MBA) degree from the University of Leicester (awarded in 1993). He is an associ-

ate member of the British Computer Society, a member of the Chartered Management Institute, and an associate member of the Chartered Institute of Logistics and Transport in Hong Kong. He also holds a Post-graduate Diploma in Marketing and is a member and Chartered Marketer of the Chartered Institute of Marketing. Oliver is currently studying for a Doctor of Business Administration with the University of South Australia and expects to graduate by March 2003. His research is concentrated in the areas of supply-chain management, system integration and e-commerce development in the manufacturing industries in Hong Kong. Oliver had some publications on the e-commerce website of MIT.edu in 2001 and 2002

International Journal of e-Business Strategy Management February/March 2003 Winthrop Publications Ltd Brunel House, 55-57 North Wharf Road, London W2 1LA, UK Tel: +44 (0) 20 7915 9612 Fax: +44 (0) 20 7915 9636 E-mail: info@winpub.demon.co.uk www.winpub.co.uk

International Journal of e-Business Strategy Management February/March 2003 245

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