E-BUSINESS

ü E-Business Is the conduct of business on the

Internet, not only for buying and selling but
also for servicing customers and
collaborating with business partners.

ü the use of Internet-based computing and

communications to execute both front-end
and back-end business processes

ü The term was first used by IBM, when, in

October, 1997.
ü
ü
ROLE OF IT IN SUPPLY CHAIN
• Has emerged as a key enabler to drive
supply chain integration.
• Businesses can use the Internet to gain
global visibility across their extended
network of trading partners and help
them respond quickly to a range of
variables, from customer demand to
resource shortages.
SUPPLY CHAIN INTEGRATION
ücoordination among supply chain members


 DIMENSIONS
v Information integration: refers to the sharing of
information among members of the supply chain.(demand
data, inventory status, capacity plans, production schedules,
promotion plans, and shipment schedules.
• Planning synchronization: Planning
synchronization refers to the joint design and execution
Synchronization of plans for product introduction,
forecasting and replenishment.
vWorkflow coordination: Workflow coordination refers
to streamlined and automated workflow activities between
supply chain partners.
ü For example, procurement activities from a manufacturer to a
supplier can be tightly coupled so that efficiencies in terms of
accuracy, time, and cost, can be achieved.
vNew business models: E-business allows partners
redefine logistics flows so that the roles and
responsibilities of members may change to improve
overall supply chain efficiency.
ü A supply chain network may jointly create new products, pursue
mass customization, and penetrate new markets and customer
segments. New rules of the supply chain game can emerge as a
result of integration fueled by the Internet.
 BENEFITS OF SUPPLY CHAIN
INTEGRATION
• reduced costs,
• increased flexibility,
• faster response times — more rapidly and
effectively.
 Electronic Information
Integration
• To ensure that a supply chain is driven by
true consumer demands, information
sharing is critical
 Bullwhip Effect
• Information distortion often arises
– when partners make use of local information to
make demand forecasts and pass them to
upstream partners
– These distortions are amplified from one level to
another in a supply chain

Customer Customers Retailers Wholesalers Manufacturer Suppliers

 Electronic Information Integration
• transparency of demand information
• The Internet is an efficient electronic link
between different entities


• Approaches
– Information Hub
– Collaboration Profit
 Information Hub
• The information hub is a node in the data
network where multiple organizations
interact in pursuit of supply chain
integration
– Data Storage
– Information Processing
– Push/Pull publishing
–
 Collaborative Profit
• companies that reported higher than average
profits were the ones who were engaged in
higher levels of information sharing.
•
•
 New Business Models
 Once companies begin to realize the promise of
 e-business enabled supply chain integration, they often
discover entirely new ways of pursuing


ü Business objectives
ü Developing strategies
ü Business models that were neither apparent nor
possible prior to the Internet.
 Virtual Resources
• Multiple resources in a supply chain that once acted independently
can now be tapped simultaneously to satisfy special needs
•
• All of which can be pooled to create a secondary market of “virtual
resources”


• Examples include inventory stockpiles, untapped capacity, or even

unmet demand
 Supply Chain Restructuring
• With the advance of information technologies, companies can also
restructure the logistics flows of their products to gain efficiencies


• Physical flows no longer have to follow information flows



• The Internet allows information flows to substitute for some of the

inefficient physical flows


• The result: lower inventory, faster, more accurate order fulfillment,

and reduced costs
•
• Example: CISCO
 Mass Customization
• The Internet enables many companies to use the Web to allow
customers configure specific order options tailored to the tastes
and preferences of the customers


• Examples:
 Computers (DELL)
 Bicycles (VOODO)


• RESULT: Better customer service by providing a highly cost

effective level of customer service