September 2001Ch 11: Collaborative Commerce1 Collaborative Commerce  Questions answered in this chapter: –What is collaborative commerce? –What is buy-side collaboration? –What is sell-side collaboration? –What is collaboration with competitors? –What are collaborative service chains?

September 2001Ch 11: Collaborative Commerce2 Introduction  The term Collaborative Commerce (C-Commerce) applies to any of the following collaborative efforts: –Collaborative Communities –Collaborative Supply Chains –Collaborative Service Chains  The internet enables C-Commerce and it redefines the information flow between companies, suppliers, distributors and customers

September 2001Ch 11: Collaborative Commerce3 Collaborative Communities  Community solutions enable group, project and user-to- user collaboration  Collaborative Community Solutions –Bulletin Boards: Allow online discussions and alerts designed to fulfill knowledge sharing and customer interaction –Chat: Allows live customer service and user-to-user interaction –Calendaring/Scheduling/File Sharing: Allows user-group collaboration, task scheduling and group organization –Collaborative Presentations: Allow users to collaboratively create and review presentations

September 2001Ch 11: Collaborative Commerce4 Collaborative Supply Chain  Collaborative supply chain refers to Intra-company and Inter-company collaborations spanning all core functions of manufacturing organizations  Types of Supply Chains –Discrete and Repetitive Manufacturing Supply Chain: Making products through the assembly of discrete parts –Process Manufacturing Supply Chain: Making products from a mix of ingredients –Service Chain: Focus is on the delivery of “information value” –Value Chain: Series of synchronized value-added steps from raw materials to end product

September 2001Ch 11: Collaborative Commerce5 Collaborative Supply Chain (Cont’d)  Barriers to Collaboration –Different organizational product objectives – There must be an agreed-upon mechanism for translating the inputs from one organization’s view to another’s –Inconsistent performance metrics – Internal performance measures are often in conflict with an organization’s overall objectives –Constantly Changing Data – A consistent set of data is more important for planning than the most up-to-date data available  The Collaboration Pyramid –Collaboration evolves from information gathering to consultative decision making –Collaboration is facilitated through the implementation of effective systems and modeling

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September 2001Ch 11: Collaborative Commerce7 Collaborative Supply Chain (Cont’d)  Collaborative Supply Chain Solutions –Design: Product conception and design for New Product Introduction (NPI) –Planning: Determine product mix and quantities based on demand forecast and manufacturing capacity –Sourcing: Identify and select suppliers and negotiate and establish purchase contracts with suppliers –Marketing & Sales: Market and create demand for new and existing products –Manufacturing & Inventory Management: Work with sourcing to maintain low inventory levels and manage an efficient just-in-time (JIT) process

September 2001Ch 11: Collaborative Commerce8 Collaborative Supply Chain (Cont’d)  Collaborative Supply Chain Solutions (Cont’d) –Fulfillment: Deliver products to the channel or to the end customer –Service: Provide technical service, field service, repairs and warranty work to customers, distributors and suppliers  Total Supply-Chain Profit –Manufacturing management –Supply management –Demand management –Supplier management –Customer management

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September 2001Ch 11: Collaborative Commerce12 Collaborative Supply Chain (Cont’d)  Buy-Side Collaboration –Outsourced Manufacturing Capacity - OEM reserves production capacity owned by contract manufacturer and provides necessary components and material Capacity and Material - OEM purchases both production capacity and materials management from contract manufacturer Hybrid – OEM provides some components while allowing contract manufacturer to furnish other components and capacity –Collaborative Design –New Product Introduction (NPI) –Direct Fulfillment –Dynamic Inventory Replenishment –Collaborative Planning, Forecasting, and Replenishment (CPFR)

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September 2001Ch 11: Collaborative Commerce18 Collaborative Supply Chain (Cont’d)  Sell-Side Collaboration –Customer Self-Service Customers can access support materials and applications Provide superior Customer Relations Management (CRM) –Channel Management: Channel is the manufacturer’s method to deliver products to the end customer Channel Pricing – Cost of managing a channel + margins Virtual Inventory Management – Provide stock availability at each point in the channel

September 2001Ch 11: Collaborative Commerce19 Collaborative Service Chain (Cont’d)  Collaboration with Competitors (Consortia) –Competing companies have joined as collaborators in consortia to realize gains through combined efficiencies –Key Consortia Services Collaborative procurements services to buy common raw materials and parts Collaborative design tools for virtual product design and development Collaborative supply-chain tools for demand forecasting, capacity planning and logistics

September 2001Ch 11: Collaborative Commerce20 Collaborative Service Chain  The term Service Chains applies to service industries such as government, energy, insurance, finance, healthcare, etc.  Service chains manage human resources and information (instead of manufactured physical goods)  Collaborative Service Chains Solutions –Opportunity and proposal management –Resource allocation and scheduling –Contract and project management –Time and expense management –Knowledge management

September 2001Ch 11: Collaborative Commerce21 Collaborative Service Chain (Cont’d)  Advanced Collaborative Service-Chain Solutions –Mass customization : Collaboration with distributors and end-customer –Contract and Project Management: Collaboration with partners to deliver custom/turnkey solutions to a common customer –Combining Products and Services: Collaboration with partners to deliver combined products and services –Proactive Subscriber Management: Existing CRM will evolve into collaborative proactive subscriber management solutions –Distribution Channel Management: Existing document management solutions will evolve into collaborative distribution channel management solutions

September 2001Ch 11: Collaborative Commerce22 Advanced C-Commerce Topics  Key trends around Collaborative Commerce –Supply Web: The internet allows for control and flow of information that compose more a web than a serial chain –Commerce Nets: The trend is to create a network of buyers and sellers connected to each other –Continuous Planning Supply Chains: Collaborative adjustments to plans take place when events or exceptions that affect the plan occur Supplier Relationship Management (SRM) – Collaborative solution between a manufacturer and its suppliers to proactively manage events and exceptions –Supply-Chain Outsourcing: requires the coordination of information to manage the outsourced supply chain

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