PowerPoint PresentationChapter 12Volkswagen Builds Its B2B Net MarketplaceTrends in B2B E-commerceDefining B2B CommerceEvolution of the Use of Technology Platforms in B2B CommerceGrowth of B2B Commerce 2000–2015The Growth of B2B E-commerceIndustry ForecastsPotential Benefits of B2B E-commercePotential Benefits (cont.)The Procurement Process and the Supply ChainWhere’s My iPad: Supply Chain Risk and VulnerabilityThe Procurement ProcessTypes of ProcurementTypes of Procurement (cont.)The Multi-Tier Supply ChainThe Role of Existing Legacy Computer SystemsTrends in Supply Chain ManagementJust-in-Time and Lean ProductionSupply Chain SimplificationAdaptive Supply ChainsSustainable Supply ChainsElectronic Data Interchange (EDI)The Evolution of EDI as a B2B MediumSupply Chain Management SystemsSlide 27RFID Autoidentification: Giving a Voice to Your InventoryCollaborative CommerceElements of a Collaborative Commerce SystemTwo Main Types of Internet-Based B2B CommerceSlide 32Net MarketplacesSlide 34Pure Types of Net MarketplacesE-distributorsSlide 37E-procurement Net MarketplacesSlide 39ExchangesSlide 41Industry ConsortiaSlide 43The Long-Term Dynamics of Net MarketplacesNet Marketplace TrendsPrivate Industrial NetworksProcter & Gamble’s Private Industrial NetworkCharacteristics of Private Industrial NetworksWalmart Develops a Private Industrial NetworkPrivate Industrial Networks and Collaborative CommercePieces of the Collaborative Commerce PuzzleImplementation BarriersSlide 53e-commerce Kenneth C. LaudonCarol Guercio Traverbusiness. technology. society.eighth editionCopyright © 2012 Pearson Education, Inc.Chapter 12B2B E-commerce: Supply Chain Management and Collaborative CommerceCopyright © 2012 Pearson Education, Inc.Class DiscussionVolkswagen Builds Its B2B Net MarketplaceWhy didn’t Volkswagen want to use a more open or public electronic exchange for its parts supply? Why didn’t it join an industry consortium such as Covisint?What kinds of services are provided by VWGroupSupply?What is eCAP and who benefits from its use?Do you think suppliers are disadvantaged by this B2B marketplace? Copyright © 2012 Pearson Education, Inc. Slide 12-3Trends in B2B E-commerceFirms more comfortable with Internet security, payments, helping expand use of B2B channelsIncreased use of cloud and SaaS Cost of using B2B systems has fallen, allowing smaller firms to participateSplitting global B2B systems into product and region centered systems for lower complexity and riskB2B communities emerge in same industry, reducing costs by integrating ERP systemsCopyright © 2012 Pearson Education, Inc. Slide 12-4Defining B2B CommerceBefore Internet:B2B transactions called trade or procurement processTotal inter-firm trade: Total flow of value among firmsB2B commerce: All types of computer-enabled inter-firm tradeB2B e-commerce: The portion of B2B commerce enabled by the InternetCopyright © 2012 Pearson Education, Inc. Slide 12-5Evolution of the Use of Technology Platforms in B2B CommerceFigure 12.1, Page 764Copyright © 2012 Pearson Education, Inc. Slide 12-6Growth of B2B Commerce 2000–2015Figure 12.2, Page 767Copyright © 2012 Pearson Education, Inc.SOURCES: Based on data from U.S. Census Bureau, 2010; authors’ estimates.Slide 12-7The Growth of B2B E-commerce2011–2015: B2B e-commerce will grow from 33 to 38% of total inter-firm tradePrivate industrial networks continue to play dominant role in B2BNon-EDI B2B e-commerce most rapidly growing type of e-commerceEDI still large but will decline over timeCopyright © 2012 Pearson Education, Inc. Slide 12-8Industry ForecastsNot all industries similarly affected by B2B e-commerceNot all industries would benefit equallyFactors influencing move to e-commerceSignificant utilization of EDILarge investments in IT and Internet infrastructuree.g., aerospace and defense, computer, industrial equipment industriesMarket concentrated on purchasing and/or sellinge.g., energy, chemical industriesCopyright © 2012 Pearson Education, Inc. Slide 12-9Potential Benefits of B2B E-commerceLower administrative costsLower search costs for buyersReduced inventory costsIncreasing competition among suppliers Reducing inventory carriedLower transaction costs:Automation, eliminating paperwork Increased production flexibility by ensuring just-in-time parts deliveryCopyright © 2012 Pearson Education, Inc. Slide 12-10Potential Benefits (cont.)Improved quality of products by increasing cooperation among buyers and sellersDecreased product cycle time by sharing of designs and production schedulesIncreased opportunities for collaborating with suppliers and distributorsGreater price transparencyHowever, some risk is posed by increased globalization and consolidationCopyright © 2012 Pearson Education, Inc. Slide 12-11The Procurement Process and the Supply ChainProcurement process: The way firms purchase materials they need to make productsSupply chain: Firms that purchase goods, their suppliers, and their suppliers’ suppliers, relationships and processes involvedSteps in procurement processDeciding who to buy from and what to payCompleting transactionCopyright © 2012 Pearson Education, Inc. Slide 12-12Insight on Society: Class DiscussionWhere’s My iPad: Supply Chain Risk and VulnerabilityWhy does concentrating production on fewer suppliers also concentrate risk?How does globalization play a part in increased risk?What types of procedures could be implemented, given increased globalization, to reduce risk?Copyright © 2012 Pearson Education, Inc. Slide 12-13The Procurement ProcessFigure 12.3, Page 768Copyright © 2012 Pearson Education, Inc. Slide 12-14Types of ProcurementFirms purchase two types of goods1. Direct goods: Integrally involved in production process2. Indirect goods: All goods not directly involved in production process (MRO goods)Firms use two methods to purchase1. Contract purchasing: Involves long-term written agreements to purchase specified products, with agreed-upon terms and quality2. Spot purchasing: Involves purchase of goods based on immediate needs in larger marketplaces that involve many suppliersCopyright © 2012 Pearson Education, Inc. Slide 12-15Types of Procurement (cont.)Procurement is highly information intensive and labor intensive Requires managing information among many