B2B Strategies: EDI to E-commerce

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Questions and Answers

What is the main focus of procurement activities?

Negotiating prices with suppliers

Monitoring product distribution

Managing inventory levels

Identifying vendors and determining their qualifications (correct)

What is the term used to describe procurement activities?

E-procurement

Supply chain management

Logistics management

Supply management (correct)

What is the primary goal of e-procurement?

To increase the speed and efficiency of procurement processes (correct)

To reduce the quality of products

To reduce the number of suppliers

To decrease the use of Internet technologies

What is the part of an industry value chain that precedes a particular strategic business unit?

Supply chain Signup and view all the answers

What is the term used to describe the use of Internet technologies in procurement and sourcing activities?

E-procurement or e-sourcing Signup and view all the answers

What is the goal of supply chain management?

To improve the efficiency of product flow Signup and view all the answers

What is the primary objective of logistics?

To provide the right goods in the right quantities at the right time Signup and view all the answers

What is the term for the intentional collection, classification, and dissemination of information about a company, its products, and its processes?

Knowledge management Signup and view all the answers

What is the term for the use of electronic commerce by governments and government agencies to perform various functions?

E-government Signup and view all the answers

What is the term for the computer-to-computer transfer of business information between two businesses?

Electronic data interchange Signup and view all the answers

Which organization has been the coordinating body for standards in the United States since 1918?

American National Standards Institute (ANSI) Signup and view all the answers

What is the term for the process of planning, implementing, and controlling the operations of the supply chain?

Supply chain management Signup and view all the answers

What is the term for the long-term relationships created among participants in the supply chain?

Supply alliances Signup and view all the answers

What is the term for the vertically integrated doorway (portal) to the Internet for industry members?

Vertical portal Signup and view all the answers

What is the term for the banks that offer VAN services for nonfinancial transactions?

Value-added banks (VABs) Signup and view all the answers

What is the term for the ability to establish that a particular transaction actually occurred?

Nonrepudiation Signup and view all the answers

Study Notes

Business-to-Business Strategies Overview

Focus on strategies to enhance purchasing, logistics, and support activities.
Explore the transition of electronic data interchange (EDI) to Internet applications.
Understand supply chain management improvements through Internet technologies.
Examine electronic marketplaces and portals for efficient negotiations.

Purchasing, Logistics, and Support Activities

Purchasing Activities: Identifying and evaluating vendors, selecting products, placing orders.
Supply Chain: A segment of the industry value chain preceding a strategic business unit.
Procurement: Encompasses purchasing and monitoring transactions.
Supply Management: Refers to procurement activities managing supplier relationships.
Sourcing: Focus on identifying suppliers and assessing qualifications.
E-procurement/E-sourcing: Utilization of Internet technologies for procurement and sourcing.

Direct vs. Indirect Materials

Direct Materials: Integral components in the final product of manufacturing.
Replenishment Purchasing: Involves negotiating long-term contracts for essential materials.
Indirect Materials: Items such as factory supplies that do not become part of the finished product.

Logistics Activities

Logistics Focus: Managing inbound and outbound movements of goods.
Logistics Objective: Ensure timely delivery of the right quantity of goods.
Logistics Management: Essential for coordinating sales and purchasing functions.

Support Activities

Encompasses finance, administration, human resources, and technology development.
Knowledge Management: Systematic collection and dissemination of company-related information.

E-Government

Use of electronic commerce by governmental bodies for operational efficiency, employment, procurement, and benefits distribution.
Mechanism for tax collection and fee management.

Electronic Data Interchange (EDI)

EDI Definition: Computer-to-computer exchange of business information adhering to standard formats.
B2B E-Commerce: Builds on EDI principles to facilitate business transactions.
ANSI: Coordinates national standards for data exchange, accrediting committees for standard development.

EDI Implementation

Initial challenges included security concerns and lack of audit trails.
Complicated processes emphasized integration requirements between buyers and vendors.

Value-Added Networks (VAN)

Direct Connection EDI: Requires businesses to manage their own EDI translators.
Indirect Connection EDI: Utilizes VANs to deliver EDI messages efficiently between partners.
VAN Advantages: Offers a single communication protocol, audit logs, compliance checking, and document retransmission.
VAN Disadvantages: Often entails costs such as enrollment and transaction fees.

Internet EDI

Emergence of EDI over the Internet, fostering flexible and customized information exchanges.
Initial hurdles involved security, auditability, and transaction verification.

Financial EDI

Transactions instructing banks on payment processes are termed Financial EDI.
Automated Clearing House (ACH): A system managing bank accounts electronically.
Banks capable of EDI exchanges are labeled EDI-capable banks.

Supply Chain Management with Internet Technologies

Supply chain management involves effectively planning and controlling operations to meet customer needs.
Key Processes: Include customer relationship management, demand management, and returns management.
Supply Alliances: Long-term partnerships formed within the supply chain for optimized operations.
Tiered Supplier Structure: Classifies suppliers into direct relationships (tier one) and further levels.

Building Trust in Supply Chains

Trust arises from effective communication, transparency, and performance within supply chain alliances.

Electronic Marketplaces and Portals

Vertical Portals (Vortals): Provide access to industry-specific online marketplaces.
Independent Marketplaces: Operate outside single company control, open to various buyers and sellers.
Private Marketplaces: Tailored for significant customers, offering negotiated prices, exclusive access.
Consortia-Sponsored Marketplaces: Formed by large industry players for collaborative purchasing.

Summary

Businesses leverage Internet technologies for enhanced purchasing and logistics efficiency.
EDI, initially for freight documentation, has been adapted for online communications.
Supply chain management improved through various Internet and Web-based strategies like private stores and consortia marketplaces.

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Description

Learn about business-to-business strategies, including electronic data interchange, supply chain management, and electronic marketplaces. Understand how businesses use technology to improve purchasing, logistics, and other support activities.