Business-to-business electronic commerce: the convergence of relationships, networked supply chains and value webs
Global competition, ever-increasing customer demands and rising development costs are altering the way business is being conducted. The dot corn bubble burst has shown little if any impact on developments on the business-to-business side of electronic commerce. Firms are aware that they have no choice but to develop stronger and closer ties with suppliers on the buy-side and with their business customers on the sell-side of the extended enterprise. Massive investments are made in this area of electronic commerce and these efforts are happening rather quietly, almost in the background. This implies that every part of the supply chain is being challenged, from sourcing to procurement and from order fulfillment to customer service.
What is emerging from these developments is the networked supply chain in which systems, processes and relationships (internal and external) are effectively integrated. In turn, these efforts constitute the very essence of adding value in the interconnected supply chain which has become intelligent with its emphasis on collaboration, visibility, real-time information and knowledge management. Through networked supply chain management participants can operate within value webs as a unified entity, enabling them to share actions that were previously isolated activities. The resulting integration, coupled with ensuring real-time, accurate and accessible information between supply chain planning and execution systems, reduces redundancy and improves efficiency. Moreover, this permits firms within the chain to communicate information about market demand directly, resulting in minimizing inventory buildup, sustaining quality and building profitable operations.
Moreover, networked supply chains speed time to market through collaboration with suppliers and customers.
These advances in technology, competition and relationship expectations force firms to rethink and restructure their supply chain relationships and demonstrate how business strategy and technology are converging. Whether firms want to or not, they will need to form alliances (value constellations) enabling, but also forcing them to collaborate closely and continually to serve the targeted customer base. These supply chain management challenges facing firms are formidable and they require substantive and extensive changes to existing practices. Future business-to-business electronic commerce will be enabled across a network of enterprises collaborating closely and continually.
KeywordsSupply Chain Supply Chain Management Electronic Commerce Network Supply Chain Electronic Data Interchange
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