INLS Electronic Business for Information Professionals Business-to-Business June 5, 2000

Today’s Reading Forbes - Have your computer call my computerHave your computer call my computer Business Let's Get VerticalLet's Get Vertical Forbes Digital Tool - Music biz uses web for new business-to-business initiativesMusic biz uses web for new business-to-business initiatives

Business 2.0 May 2000 Estimated savings from B-to-B ecommerce Aerospace machining 11% Chemicals 10% Communications 5-15% Computing 11-20% Electronic components 29-39% Food ingredients 3-5% Forest products 15-25% Freight transport % Health care 5% Life sciences 12-19% Machining (metals) 22% Media and advertising 10-15% Oil and gas 5-15% Paper 10% Steel 11%

Source: Turban Electronic Commerce: A Managerial Perspective General Electric Increased materials cost Examination of purchasing procedures Inefficient Too many transactions between GE and vendors and within GE GE did not use advantage of making a large volume of purchases 25% of invoices were reworked due to errors

GE Lighting Sent hundreds of price requests to corporate departments daily Requests required copies of blueprints Various other paperwork included Corporate would sent requests to vendors/suppliers who would bid on the job Process took seven days Able to send out 2 or 3 requests for each project

GE Trading Post Network Corporate receives requests from GE Lighting in digital format Sends vendors/suppliers an electronic information request form

GE Trading Post Network Cut processing time by 99% Requests made globally to hundreds of registered vendors Reduced labor needed by 30% Cut material costs by up to 20% Use 60% of corporate staff elsewhere Cut time for entire process in half

B2B Objectives Simplification Integration Openness

Aiding Information Flow Products Customers Suppliers Planning Transportation Inventory Alliances Competitive analysis Sales Marketing Performance

Supply Chain Management Generating orders Taking orders Distributing orders

Players in B2B Sellers Buyers Intermediaries Deliverers Networks & Systems

Sellers & Buyers Sellers Developing online catalogs as sales tool catalogs Integration with buyers systems is crucial Focus on self-service Buyers Looking to reduce their purchasing price and quicker turnaround on placing orders Able to expand market and market share

Source: BusinessWeek June 5, 2000 Intermediaries Companies that run marketplaces where buyers and sellers meet FreeMarkets.com Simultaneous negotiations will thousands of suppliers Few marketplaces will survive

Intermediaries: E-Marketplaces Communities Catalogs Procurement Hubs Auctions Exchanges Collaboration Hubs

Tuesday: Delivery Just-in-time delivery

Tuesday: Networks & Systems EDI ERP Agents

Tuesday’s Readings Posted by 3 pm Monday