Electronic Commerce and Operations Management

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Presentation transcript:

Electronic Commerce and Operations Management

E-Commerce The use of computer networks, primarily the internet, to buy and sell products, services, and information.

E-Business “… all about cycle time, speed, globalization, enhanced productivity, reaching new customers and sharing knowledge across institutions for competitive advantage.” Louis Gerstner, Chairman, IBM

E-Commerce Transactions (1 of 2) Business-to business (B2B) Both sides of the transaction are businesses, non-profit organizations, or governments. Business-to-consumer (B2C) E-commerce transactions where customers are individual consumers Consumer-to-consumer (C2C) Consumers sell directly to each other. Consumer-to-business (C2B) Individuals sell services or goods to businesses

E-Commerce Transactions (2 of 2) Business Consumer B2B GM/Ford/Daimler’s Covisint exchange B2C Amazon, Dell, Net Grocer.com C2B Priceline, Travelocity C2C Ebay

Business-to-Consumer E-Commerce

Value Chain (1 of 2) (a) Traditional Value Chain Manufacturer Wholesaler/ distributor Retailer Consumer (a) Traditional Value Chain (b) A New Value Chain: Intermediaries Eliminated (Deintermediation)

Value Chain (2 of 2) (a) Traditional Value Chain Manufacturer Wholesaler/ distributor Retailer Consumer Infomediary E-Retailer Aggregator Portal (a) Traditional Value Chain (b) Intermediaries Eliminated (Deintermediation) (b) New Intermediaries Introduced (Reintermediation)

An Integrated Value Chain (1 of 2) Manufacturer Supplier Customer Flow of information (customer order)

An Integrated Value Chain (2 of 2) Manufacturer Supplier Customer Flow of information (customer order) Flow of product (order fulfillment)

The Growth of E-Commerce B2B B2C 8000 – 6000 – 4000 – 2000 – 0 – | | | | | 2000 2001 2002 2003 2004 Year Trillions of Dollars

Business-to-Business E-Commerce

For which purposes do businesses use the Internet? To communicate designs, contracts and agreements To schedule work and deliveries To buy and sell from suppliers To transfer funds To track orders or shipments To track inventories To provide information about products or services To promote products and services To share knowledge, ie. to transact business

Types of B2B Transactions Buyer Seller Buyers Sellers Buyer Buyers Sellers (a) Electronic Storefront (b) Seller’s Auction (c) Buyer’s Auction (d) Exchange or E-Marketplace

E-Business Promotes (1 of 2): Better customer relations More efficient processes Lower cost of materials Information technology synergy Better and faster decision making

E-Business Promotes-(2 of 2): New forms of organizations Expanded supply chain Higher customer expectations New ways of doing business Globalization (global presence of companies, global choices of customers)