Session 11

Unit 31: E-business Operations

Learning Outcomes

3-1 Differentiate between the different types of web auction

3-2 Describe the use of electronic marketplaces and industry networks for supply chain management

Topics

Review of Last session Group Report Lecture

Web auctions Electronic marketplaces and industry networks

Review of Last Session

Topics Discussed

Criteria 1-1 to 2-4 Submission of Assignment 31-01

Test of Baseline Knowledge

Test of Baseline Knowledge

What are web auctions?
Types of auctions, name at least 2 sites each

What are electronic marketplaces ?

Give 3 samples

What is supply chain management? Research a diagram. Present a website What are industry networks? Present a website

CRITERIA 3-1

Differentiate between the different types of web auction

Web auctions
models developed for use over internet
English auction bids up from a low price, Dutch auction moves down from a high price until a bid is made;

uses of web auctions

by buyers for emergency supplies, by suppliers to dispose of surplus goods;

pricing over the internet

Airlines model Treasury notes model Prepayments or bulk buy

Auction
is a process of buying and selling goods or services by offering them up for bid, taking bids, and then selling the item to the highest bidder (normally).

Web Auction
one in which participants bid for products and services over the Internet. The functionality of buying and selling in an auction format is made possible through auction software which regulates the various processes involved.

How Internet Auction Works?

Role of the Auction Site. Registration. Fees The Auction.
time limit on bidding a reserve price

After the Auction

Arranging to Pay and Deliver Merchandise..

Payment Options
Credit card, Online payment service Debit card, Personal check, Cashiers check, Money order, Escrow service. Wire Transfers.

Strategic Strengths
No time constraints No geographical constraints Intensity of social interactions Large number of bidders Large number of sellers Network economies Captures consumers' surplus

Types of Auction

English Dutch Reverse Second Item

Uses of Web Auction - Buyer

For emergency supplies Finding Rare Items Managing Your Budget Automated Bidding Customer Protection

Uses of Web Auction - Seller

Disposing of goods; Pricing purpose Advertisement Income Cost savings

Pricing of Web Auction

Airlines model Treasury Notes model Prepayments or bulk buy Rare Items

Criteria 3-2

Describe the use of electronic marketplaces and industry networks for supply chain management

Electronic marketplaces and industry networks

electronic marketplaces supply chain industry cooperation between businesses

Electronic Marketplaces

Electronic Marketplaces
a location on the Internet where companies can obtain or disseminate information, engage in transactions, or work together in some way. provide cost effective means of purchasing wide range of MRO (even strategic) items needed by organisations

Two basic functions

1) they allow companies to obtain new suppliers or buyers for company products, 2) developing streamlined trading networks that make negotiating, settlement, and delivery more efficient.

Key Considerations
Ownership of the E-marketplace Costs Ease of Use / Support Industry Fit Marketplace Participation Security / Privacy Other Services Process Integration

Value Added Functions

Forward or reverse auctions, Vendor catalogues, Fixed price ordering, Trading exchange functionality, Bulletin boards / wanted ads, and RFQ, RFI, or RFP capability Others Functions

Structuring
Neutral Consortium of Sellers Buyers marketplace Industry Networks

Industry Networks

Industry Networks
Web site that provides information and resources for a particular industry.

typically provide news, research and statistics, discussions, newsletters, online tools, and many other services that educate users/ members about a specific industry.
have been developed by major manufacturing or retail organisations to help them coordinate the different businesses in their supply chains;

Strategic use
Customer integration eProcurement eCommerce or online catalogs Logistics optimization Product availability or Pricing Product design or collaboration Inventory management Payments automation and others

Sample Industry Networks

Biotech and Life Sciences High-tech and Semiconductor Wholesale Distribution Manufacturing Financial Services and Banking Public Sector Education

Business Cooperation

Business Cooperation
cooperation between businesses using an industry network

Uses
marketing, product development, forecasting and planning, production, transportation and logistics

Supply Chain

Supply Chain Management

Supply Chain: the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service.
Sometimes referred to as value chains

Supply Chain
need for organisation to develop close relationship with first tier suppliers who in turn are dependent on own second tier suppliers especially for strategically important materials;

Supply Chain Facilities

Warehouses Factories Processing centers Distribution centers Retail outlets Offices

Supply Chain Sample Diagram

Typical Supply Chains

Production Purchasing Distribution

Receiving Storage Operations Storage

Typical Supply Chain for a Figure 14.1a Manufacturer

Supplier Supplier Supplier

Storage

Mfg.

Storage

Dist.

Retailer

Customer

Typical Supply Figure 14.1b Chain for a Service

Supplier

Storage

Service

Customer

Supplier

Need for Supply Chain Management

1. Improve operations 2. Increasing levels of outsourcing 3. Increasing transportation costs 4. Competitive pressures 5. Increasing globalization 6. Increasing importance of e-commerce 7. Complexity of supply chains 8. Manage inventories

Benefits of Supply Chain Management

Lower inventories Higher productivity Greater agility Shorter lead times Higher profits Greater customer loyalty

Elements of Supply Chain Management Table 14.1

Element
Customers
Forecasting Design Processing

Typical Issues
Determining what customers want
Predicting quantity and timing of demand Incorporating customer wants, mfg., and time Controlling quality, scheduling work

Inventory
Purchasing Suppliers Location Logistics

Meeting demand while managing inventory costs

Evaluating suppliers and supporting operations Monitoring supplier quality, delivery, and relations Determining location of facilities Deciding how to best move and store materials

Successful Supply Chain

Trust among trading partners Effective communications Supply chain visibility Event-management capability
The ability to detect and respond to unplanned events

Performance metrics

Metrics Table 14.4

Perspective
Reliability

Metrics
On-time delivery Order fulfillment lead time Fill rate (fraction of demand met from stock) Perfect order fulfillment
Supply chain response time Upside production flexibility Supply chain management costs Warranty cost as a percent of revenue Value added per employee

Flexibility

Expenses

Assets/utilization

Total inventory days of supply Cash-to-cash cycle time Net asset turns

Supply Chain Performance Drivers

1. Quality
2. Cost 3. Flexibility 4. Velocity 5. Customer service

Supply Chain Terms

Bullwhip effect
Inventories are progressively larger moving backward through the supply chain

Bullwhip Effect
Figure 14.3
Amount of = inventory

Tier 2 Suppliers

Tier 1 Suppliers

Producer

Distributor

Retailer

Final Customer

Supply Chain Terms

Cross-docking
Goods arriving at a warehouse from a supplier are unloaded from the suppliers truck and loaded onto outbound trucks Avoids warehouse storage

Cross-docking

See you next meeting

END OF SESSION