Learning Objectives Cont’d

Electronic Commerce 043002 Chapter 5: Business-to-Business Strategies: From Electronic Data Interchange to Electronic Commerce




Supply chain management (供应链管理) and how businesses are using the Internet and Web technologies to improve it




Electronic marketplaces (电子集市) and portals (门户) that make purchase-sale negotiations easier and more efficient

Dr. Jing Zhou 3

Dr. Jing Zhou - School of Computer Science, Communication University of China, Beijing; email [email protected]; © 2007

Key Terms

Learning Objectives




In this chapter, you will learn about:





Strategies that businesses use to improve purchasing, logistics (物流), and other support activities









Electronic data interchange and how it works




How businesses are moving electronic data interchange operations to the Internet





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Accredited Standards Committee X12 公认标准委 员会X12 American National Standards Institute 美国国家标 准协会 automated clearing house (ACH) 自动清算所 contract purchasing 合同采购 customer portal 客户门户 direction connection EDI 直接连接EDI direct material 直接物料 EDI-capable bank 支持EDI业务的银行 EDI compatible EDI兼容 4

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Key Terms














Key Terms

EDI for Administration, Commerce, and Transport (EDIFACT or UN/EDIFACT) 管理、商务和运输的EDI e-government 电子政务 e-procurement software 电子采购软件 e-sourcing 电子供应 financial EDI (FEDI) 金融EDI financial VAN (FVAN) 金融VAN independent exchange 第三方交易中心 independent industry marketplace 第三方行业电子集 市 indirect connection EDI 间接连接EDI















public marketplace 公共电子集市 purchasing card (p-card) 采购卡 radio frequency identification device (RFID) 无线射频鉴 别设备 replenishment purchasing 补货/给采购 sourcing 供应 spend 开支 spot market 现货市场 spot purchasing 现货采购 supply alliance 供应联盟 supply chain 供应链

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Key Terms














Key Terms

indirect material 间接物料 industry consortia-sponsored marketplace 行业共同电 子集市 Internet EDI 互联网EDI knowledge management 知识管理 maintenance, repair, and operating (MRO) 保养、维修 和运营 nonrepudiation 不可否认 open EDI 开放式EDI private company marketplace 专属电子集市 private store 专属店铺












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supply web 供应网络 third-party logistics (3PL) provider 第三方物流服务商 tier one supplier 一级供应商 tier two supplier 二级供应商 tier three supplier 三级供应商 transaction sets 报文标准 ultimate consumer orientation 最终消费者导向 value-added bank (VAB) 增值服务银行 vertical portal (vortal) 垂直门户

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Purchasing, Logistics, and Support Activities


Purchasing activities (购买活动)





Purchasing, Logistics, and Support Activities Cont’d


Include identifying vendors, evaluating vendors, selecting specific products, placing orders (下订单), and resolving any issues that arise after receiving the ordered goods or services







Supply chain (供应链)


Sourcing (供应)

E-procurement or e-sourcing


Part of an industry value chain that precedes a particular strategic business unit

Procurement activity devoted to identifying suppliers and determining their qualifications

Use of Internet technologies in procurement and sourcing activities

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Purchasing, Logistics, and Support Activities Cont’d





Procurement (采购)


Includes all purchasing activities, plus monitoring of all elements of purchase transactions




Also includes managing and developing relationship with key suppliers

Supply management (供应管理)


Term used to describe procurement activities

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Direct vs. Indirect Materials Purchasing


Logistics Activities (物流活动)


Direct materials (直接物料)




Materials that become part of the finished product in a manufacturing process
Replenishment/Contract purchasing (补货采购 补货采购/ 合同采购)
The company negotiates long-term contracts for most of the materials that it will need





Include managing





Objective of logistics





When actual demand is higher than company’s expected demand, it must buy additional material

Inbound movements of materials and supplies Outbound movements of finished goods and services To provide the right goods in the right quantities in the right place at the right time

Logistics management


Important support activity for both sales and purchasing activities

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Direct vs. Indirect Materials Purchasing Cont’d

Logistics Activities Cont’d





Purchases are made in a loosely organized market called a spot market (现货市场)




This second type of direct materials purchasing is called spot purchasing (现货采购)




Indirect materials (间接物料)





Other materials that the company purchases, including factory supplies






Office depot China http://law.asiaec.com/ Staples http://www.staples.com.cn/website/Default.html 14

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Receiving (收货 收货), 仓储), 库存 收货 warehousing (仓储 仓储 controlling inventory (库存 控制), 车辆的调度和控制), 控制 scheduling and controlling vehicles (车辆的调度和控制 车辆的调度和控制 产成品的分销) and distributing finished goods (产成品的分销 产成品的分销 are all logistics activities For example,


the Schneider Track and Trace system delivers real-time shipment info to its customer




J.B. Hunt lets its customer track their shipments themselves

When transportation and freight companies engage in the business of operating all or a large portion of a customer’s materials movement activities, the company is called a third-party 16 第三方物流服务商) logistics provider (第三方物流服务商 第三方物流服务商

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Support Activities (辅助活动)


Support activities








E-Government (电子政务)


Include categories of finance (财务 财务) 管 财务 and administration (管 理), human resources (人力资源 人力资源), 人力资源 and technology development

Many companies can offer support activities services including human resources functions (Online Benefits), document storage services (CyLex Systems), and payroll processing (PayMaxx) Larger firms are building these functions into their intranets

Use of electronic commerce by governments and government agencies to


Perform functions for their stakeholders




Employ people, buy supplies from vendors, and distribute benefit payments




Collect taxes and fees from constituents (选民 选民) 选民

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Support Activities Cont’d


In 1999 Ericsson launched an extranet which included a Web site








E-Government Cont’d

Enabled recipients of payments from the company’s medical and retirement plans to track benefits Designed to facilitate knowledge management (知识管 知识管 理)

Knowledge management


Intentional collection, classification, and dissemination of information about





E-government can reduce administrative costs and provide better services to stakeholders




The most common services offered are: access to the state laws and regulations, renewal of licenses, promotion of the state to businesses considering 招商引资), new locations (招商引资 招商引资 job listings, promotion of 推广旅游), tourism in the state (推广旅游 推广旅游 tax form and filing information, and information for companies that want to do business with the state

A company, its products, and its processes 18

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Early Business Information Interchange Efforts

Network Model of Economic Organization








One trend becoming clear in purchasing, logistics, and support activities is the shift away from hierarchical structures toward network structures




Some researchers studying the interaction of firms within an industry value chain are beginning to use the term “supply web” instead of “supply chain”




1950s


Companies began to use computers to store and process internal transaction records

In 1968


The emerging networks of firms are more flexible and can respond to changes in the economic environment much more quickly

Number of freight and shipping companies formed the Transportation Data Coordinating Committee (TDCC) which was charged with exploring ways to reduce paperwork (文书工作) burden

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Electronic Data Interchange (EDI， ，电子数据交换)





Computer-to-computer transfer of business information between two businesses that uses a standard format of some kind EDI compatible (兼容 兼容) 兼容








Early Business Information Interchange Efforts Cont’d


TDCC


Firms that exchange data in specific standard formats Business information exchanged is often transaction data

Created a standardized information set including all the data elements that the shippers (发货人) commonly included on bills of lading(提货单), freight invoices(运费发票), shipping manifests (载 货清单), and other paper forms

Most B2B electronic commerce


An adaptation of EDI or based on EDI principles

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Emergence of Broader EDI Standards


Commonly used ASC X12 Transaction Sets

American National Standards Institute (ANSI)


Has been coordinating body (协调组织) for standards in the United States since 1918




Does not set standards itself




Has created a set of procedures for the development of national standards




Accredits (授权) committees that follow those procedures 25

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Emergence of Broader EDI Standards Cont’d


Accredited Standards Committee X12 (ASC X12)








Emergence of Broader EDI Standards Cont’d





Chartered by ANSI to develop uniform EDI standards in 1979 Include information systems professionals from over 800 businesses and other organizations

United Nations published first standards under the title





Transaction sets (报文集)


In 1987

Late 2000


Names of formats for specific business data interchanges 26

EDI for Administration, Commerce, and Transport (EDIFACT, or UN/EDIFACT)

ASC X12 organization and UN/EDIFACT group agreed to develop one common set of international standards 28

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Commonly used UN/EDIFACT Transaction Sets

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How EDI Works


EDI





Implementation can be complicated

Example





Consider company that needs a replacement for one of its metal-cutting machines (金属切割机床) Paper-based purchasing process





Buyer and vendor are not using any integrated software for business processes internally Information transfer between buyer and vendor is paper based

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Direct connection (直接连接) EDI


Value-Added Networks (增值网)

Direct connection EDI







Requires each business in the network to operate its own on-site EDI translator computer




EDI translator computers are connected directly to each other using


Indirect connection (间接连接) EDI


Modems and dial-up telephone lines or dedicated 专线) leased lines (专线 专线

To send an EDI transaction set to a trading partner


VAN customer connects to the VAN then forwards EDI formatted message to VAN




VAN logs the message and delivers it to trading partner’s mailbox




Trading partner then dials in to the VAN and retrieves its EDI-formatted messages

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Indirect Connection EDI through a VAN

Direct Connection EDI

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Advantages of using a VAN


Users need to support only the VAN’s one communications protocol




The VAN


EDI on the Internet






Records message activity in an audit log (运行记录 运行记录) 运行记录




Can provide translation between different transaction sets used by trading partners




Can perform automatic compliance checking

Initial roadblocks to conducting EDI over the Internet




Concerns about security Internet’s inability to provide audit logs and thirdparty verification (第三方验证 第三方验证) 第三方验证 of message transmission and delivery

Nonrepudiation (不可否认)


Ability to establish that a particular transaction actually occurred

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Open Architecture of the Internet

Disadvantages of using a VAN


Cost


Most VANs require








An enrollment fee (注册费 注册费), 注册费 a monthly maintenance 月租费), 交易费) fee (月租费 月租费 and a transaction fee (交易费 交易费




Using VANs can become cumbersome and expensive for companies that


Internet EDI or Web EDI


EDI on the Internet




Also called open EDI

Open architecture of Internet





Want to do business with a number of trading partners, each using different VANs

New tools such as XML


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Allows trading partners unlimited opportunities for customizing information interchanges Helping trading partners be even more flexible in exchanging detailed information 40

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Supply Chain Management (供应链管理)

Financial EDI (金融EDI ) 金融


EDI transaction sets that provide instructions to a trading partner’s bank




Automated clearing house (ACH, 自动清算所) system








Service that banks use to manage accounts with each other




EDI-capable (支持EDI业务 业务) banks 支持


Equipped to exchange payment (付款 付款) 付款 and 汇款) remittance (汇款 汇款 data through VANs

When companies integrate their supply management and logistics activities across multiple participants in a particular product’s supply chain, the job of managing that integration is called supply chain management

Supply chain management


Was originally developed to reduce costs




Is now used to add value in the form of benefits to the ultimate consumer at the end of the chain, which requires a more holistic view (全局的观点 全局的观点) 全局的观点 of the entire supply chain

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Supply Chain Management Cont’d

Financial EDI Cont’d


Value-added banks (VABs, 增值服务银行)





Banks that offer VAN services for nonfinancial transactions

Businesses that engage in supply chain management





Financial VANs (FVANs, 金融增值网)


Nonbank VANs that can translate financial transaction sets into ACH formats




Tier one suppliers


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Establish long-term relationships with small number of capable suppliers – tier one suppliers (一级供应商) Develop long-term relationships with larger number of suppliers that provide components and raw materials – tier two suppliers (二级供应商)

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Supply Chain Management Cont’d


Tier two suppliers





Manage relationships with the next level of suppliers – tier three suppliers (三级供应商)

Supply alliances (供应联盟)


Long-term relationships created among participants in the supply chain 45

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Increasing Supply Chain Efficiencies

Internet Technologies and the Supply Chain





Key elements of successful supply chain management




Many companies are using Internet and Web technologies to manage supply chains that yield increases in efficiencies




Clear communications (明确的沟通) and quick responses (快速的响应)







Technologies, especially Internet and Web technologies, can be very effective communications enhancers

These companies have found ways to increase process speed, reduce costs, and increase manufacturing flexibility




Examples

Major disadvantage of using Internet technologies in supply chain management


The cost of the technologies

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Boeing, the largest producer of commercial aircraft




Dell Computer, famous for use of Web to sell customconfigured computers

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Building and Maintaining Trust in the Supply Chain

Using Materials-Tracking (物料跟踪) Technologies with EDI and EC








In many industries, the integration of bar coding and EDI has been prevalent for tracking materials movement




In the 2nd wave of electronic commerce, companies are integrating new types of tracking, such as radio frequency identification devices (RFIDs, 无线射频标签)







The passive (被动 被动) 被动 RFID tag


Includes information about the inventory item




Can be made cheaply and in small size




Does not need a power source







Continual communication (持续的沟通) and information sharing (信息共享)

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Building and Maintaining Trust in the Supply Chain Cont’d

One goal of supply chain management is to help each company in the chain focus on meeting needs of consumer at the end of the supply chain, which are often called ultimate consumer orientation One company pioneering the use of Internet technology to facilitate creating ultimate consumer orientation is Michelin North America Most IT and purchasing managers believe that IT helps to improve their firm’s relationships with suppliers and supply chain management

Developing trust

Key elements for building trust


Creating an Ultimate Consumer Orientation (最终的消费者导向)


Major issue for most companies to form supply chain alliances




Procurement professionals build trust on years of doing business with the same vendor




Vendors send sales representatives to call on buyers regularly







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Vendors participate in trade shows (贸易展 贸易展) 贸易展 and conferences Vendors are finding that the Web gives them opportunity to stay in contact with customers more easily and less expensively

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Electronic Marketplaces (电子集 市) and Portals (门户)

ChemConnect Home Page




Many business researchers and consultants believe that the Web provides opportunity for companies to establish information hubs (信息中心), marketplaces, and auctions (拍卖中心)




Vertical portals (vortals, 垂直门户)


Offer a doorway (or portal) to the Internet for industry members




Vertically integrated – each hub would offer services to just one industry 53

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Independent Industry Marketplaces (独立的行业集市)


Industry marketplaces (行业集市)








Focused on a single industry

Independent exchanges (第三方交易中心)





Private Stores (专属商店) and Customer Portals (客户门户)

Not controlled by a company that was an established buyer or seller in the industry (非本行业 某家公司所控制)




Public marketplaces (公共电子集市)


Open to new buyers and sellers just entering the industry

Private store


Has password-protected entrance




Offers negotiated price reductions on limited selection of products

Customer portal sites


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Offer private stores along with services such as part 零件编码表), number cross-referencing (零件编码表 零件编码表 product usage guidelines, safety information, and other services 56

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Characteristics of B2B Marketplaces

Private Company Marketplaces (专 属公司电子集市)


E-procurement software





Allows a company to manage its purchasing function through a Web interface

Private company marketplace


A marketplace that provides auctions, request for quote postings, and other features many of which are similar to those of e-procurement software 57

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Industry Consortia-Sponsored Marketplaces (行业共同电子集市)


Formed by several large buyers in a particular industry




Covisint





Summary


Companies are using Internet and Web technologies





Created in 2000 by a consortium of DaimlerChrysler, Ford, and General Motors

EDI





In the hotel industry Marriott, Hyatt, and three other major hotel chains formed a consortium to create Avendra

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First developed by freight and shipping companies to reduce the paperwork burden

Internet





To improve purchasing, logistics, and support activities

Now providing the inexpensive communications channel that EDI lacked 60

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Summary


Supply chain management





Incorporates several elements that can be implemented and enhanced through use of Internet and Web

Models for B2B electronic commerce





Independent industry marketplaces Private stores, customer portals Private company marketplaces Industry consortia-sponsored marketplaces 61

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