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in B2B
In Chapter 4, we introduced a variety of e-marketplaces and exchanges. One of the major objectives of these entities is to improve the opera- tion of the B2B supply chain. Let’s see how this works with different business models.
A company-centric marketplace can solve several supply chain problems. For example,
CSX Technology developed an extranet-based EC system for tracking cross-country train shipments as part of its supply chain initiative and was able to effectively identify bottle- necks and more accurately forecast demand.
Using an extranet, Toshiba America provides an ordering system for its dealers to buy replacement parts for Toshiba’s products. The system smooths the supply chain and delivers better customer service.
HighJump Software suggested taking into account a number of key elements for optimal order fulfillment including the automation of picking, packing and shipping, the transfor- mation of paper-based processes, and the inclusion of sales and marketing input into various supply chain processes.
For additional discussion on how fulfillment is done in B2B, see fedex.com/us/supply-chain/ services/fulfillment-services or Demery (2012).
Order Fulfillment in Services
Thus far, we have concentrated on order fulfill- ment with physical products. Fulfilling service orders (e.g., buy or sell stocks, process insurance claims) may involve additional information pro- cessing, which requires more sophisticated EC systems.
Other Solutions to Supply Chain Problems
Visibility increases along the supply chain. It is critical to know where materials and parts are at any given time. This is referred to as vis- ibility. Such knowledge can help in solving problems such as delays, combining ship- ments, and more. Visibility is provided by several tools, such as bar codes, RFID, collab- orative devices, and collaborative portals that provide access to information required to manage various aspects of the supply chain. Visibility enables the efficient coordination of supply chain activities in spite of rapid changes in the market.
Order fulfillment can become instant if the products can be digitized (e.g., software). In other cases, EC order taking interfaces with the company’s back-office systems, including
logistics. Such an interface, or even integration, shortens cycle time and eliminates errors.
Managing risk to avoid supply chain break- down can be done in several ways. Carrying additional inventories is effective against the risk of stock-outs, and hence poor customer service, but it can be expensive. Also, in cer- tain cases the risk increases because products may become obsolete. (Managing inventories was described in Chapter 4.)
Inventories can be minimized by introducing a build-to-order manufacturing process as well as by providing timely and accurate information to suppliers. By allowing busi- ness partners to electronically track in route orders and production activities, inventory management can be improved and inventory levels and the expense of inventory manage- ment can be minimized. Inventories can be better managed if we know exactly where parts and materials are at any given time (e.g., by using RFID). Retailers’ inventories can be managed electronically by their suppliers.
Self-service can reduce supply chain problems and costs. Some activities can be done by cus- tomers, business partners, or employees. For example, customers can self-track the status of their orders (e.g., at FedEx, UPS, USPS, etc.); using FAQs customers and business partners may solve small problems by them- selves. Customers can self-configure details of orders (e.g., for a computer at HP, Dell, and Apple), and finally employees can update per- sonal data online.
Collaboration among members of the supply chain can shorten cycle times, minimize delays and work interruptions, lower invento- ries, and lower administrative costs. A variety of tools exists ranging from collaborative hubs and networks to collaborative planning.
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