Supply Chain Management Overview

Supply Chain Management

• Supply chain encompasses suppliers, manufacturers, distributors, shipping, merchants, and end customers.
• It involves procurement, warehouse management, distribution, and delivery processes.
• Effective supply chains coordinate multiple value chain stages.

B2C vs B2B

• B2C focuses on single transactions, with each interaction treated as independent.
• B2B emphasizes ongoing cooperation with established contracts and shared objectives.

Strong B2B Relationship

• Supplier and merchant collaborate like a unified organization.
• This involves joint strategic planning, sales data sharing, and coordinated forecasting.
• Benefits for Suppliers: Precise sales data, improved production management, and enhanced marketing/advertising.
• Benefits for Merchants: Reduced warehousing and personnel costs, transferred logistics risks, and minimized stock-outs.

Supply Chain Management (SCM)

• SCM involves tightly integrating and coordinating all aspects of product procurement, manufacturing, and transportation.

Marketplaces

• Digital marketplaces provide comprehensive E-Commerce functionality under marketplace ownership.
• They enable collaboration between diverse suppliers and customers.
• Marketplaces differ based on:
  • Product/Service Type: Tradable quantities, specificity, product complexity, price components, and consumer consequences.
  • Transaction Type: Market liquidity, transaction stage, transaction meaning, and transaction duration.
  • Main Functions: Data management, pricing, buying, selling, stock exchange, transportation, invoicing, and payment.

Marketplace Failure Reasons

• Complex technology exceeding founder expectations
• Underestimated IT infrastructure costs
• Project delays and escalating capital requirements
• Undervalued business process complexities
• Missing standards hindering a sound foundation
• Higher than anticipated personnel efforts
• Lack of economic attractiveness for suppliers and customers
• Ineffective fees
• Direct internet-based collaboration eliminating the need for intermediaries
• Highly complex products or services making specific businesses unsuitable for marketplaces

Supply Chain Management

• Supply chain connects suppliers, manufacturers, distribution centers, shipping companies, merchants, and customers.
• Supply chains coordinate multiple stages of the value chain.
• Supply chain management involves managing the flow of goods and services from point of origin to point of consumption.
• Supply chain management is a cross-functional approach.
• SCM focuses on improving trust and collaboration among supply chain partners.

Marketplace

• Marketplaces are software platforms with comprehensive E-Commerce functionality.
• Marketplace owners control the software and processes.
• Marketplaces facilitate cooperation between suppliers and customers.
• They can be differentiated by their type of product or service, transaction type, and functions.

Marketplace Types

• Product or Service
  • Tradable Quantities: Transaction costs are low for large tradable quantities.
  • Specificity: Products with low application potential have low market liquidity.
  • Complexity: Complex products are not suitable for electronic trade.
  • Price Components: Material, service, production, transport, and profit margin contribute to pricing.
  • Consumer Consequences: Transactions involve contract business or spot business.
  • Value Creation: A-Products are goods needed for production, while C-Products are MRO (Maintenance/Repair/Operations).
• Transaction Type
  • Market Liquidity: Number of transactions per time unit.
  • Stage of Transaction: Defined by the process model.
  • Meaning of Transaction: Determined by the industry and product.
  • Duration of Transaction: With or without adjustments.

Marketplace Functions

• Data Management: Master data, transaction data, and catalogue.
• Pricing: Market, calling for bids, tender offers, auctions, negotiations, and power shopping.
• Buying: E-Sourcing, E-Procurement, and workflow.
• Sales: Ordering and order management.
• Other: Stock exchange; transport; invoicing; payment; additional functions offered centrally for market actors; interfaces with providers, customers, forwarding and shipping agencies, and other service providers.

Marketplace Failure Factors

• Technology is more complex than expected.
• IT infrastructure costs are underestimated.
• Projects take longer than expected and increase capital needs.
• Complexity of business processes is undervalued.
• Missing standards lead to a lack of sound background.
• Personnel efforts are higher than expected.
• Marketplaces are economically unattractive for suppliers and customers.
• Fees are not cost-effective.
• Partners may choose direct collaboration via the internet, bypassing the marketplace.
• The business does not require a marketplace due to highly complex products or services.

Ethics and Morality

• Ethics is concerned with defining and defending concepts of right and wrong conduct.
• Morality differentiates actions based on what is considered "good" or "bad".
• Both ethics and morality are essential for a well-functioning society.

Impact of ICT on Ethics and Morality

• Rapid advancements in ICT raise ethical concerns, especially regarding employment and the increasing reliance on technology.
• Questions arise regarding how technology affects our actions, and the balance between ethics, technology, and economics.

Information Rights and Duties in E-Commerce

• Privacy protection is crucial in E-Commerce, based on human rights and constitutional principles.
• E-Marketing raises privacy concerns due to data mining and usage by platforms such as Facebook.
• Steven Levy's six basic rules for information rights emphasize unlimited access to information and promote decentralization.

Proprietary Rights and Duties in E-Commerce

• Determining the boundaries between theft and copying is crucial in E-Commerce.
• Defining legal and illegal trade transactions is essential to uphold intellectual property rights.

Accountability and Control in E-Commerce

• Responsibility for damages caused by software-controlled machines needs clarification.
• Determining liability for data breaches and safeguarding organizations against ICT system failures is essential.
• Establishing accountability for the distribution of misleading or damaging information online is crucial.

Overall Impacts of E-Commerce

• ICT transforms the world through its impact on various aspects of society and the economy.
• E-Commerce influences economies by increasing productivity and driving innovation.
• Investments in ICT have significantly contributed to economic growth in developed nations.

Macroeconomic Impacts of E-Commerce

• E-Commerce enhances international trade by increasing specialization opportunities.
• E-Commerce influences monetary policy through increased competition and reduced costs, resulting in lower prices.
• E-Commerce poses challenges to governments regarding sales tax revenue as interstate and international transactions rise.

Microeconomic Impacts of E-Commerce

• E-Commerce can impact the threat of entry in various industries.
• Entry barriers may be decreased or increased depending on how E-Commerce affects economies of scale and scope.
• E-Commerce influences the power of suppliers and customers in different ways.

Cost Structures in Traditional and Digital Economies

• The traditional economy is characterized by low allocation costs and high transaction costs.
• The digital economy is defined by high allocation costs and low transaction costs.

Economy of Attention

• The concept of "economy of attention" highlights the increasing competition for consumers' attention in the digital age.

External Impacts of E-Commerce

• E-Commerce contributes to globalization through technical standardization, leading to global markets and job relocation.
• E-Commerce increases information density, leading to an information flood and increasing importance of information management.
• E-Commerce impacts intellectual property rights by promoting both faster distribution and easier copying and manipulation.

Pricing in Digital Markets

• Digital markets increase transparency regarding prices and offerings.
• Symmetric information access between suppliers and customers leads to lower arbitrage profits.
• However, the "supermarket effect" can occur, decreasing transparency due to excessive offerings.

Social and Ethical Considerations

• While E-Commerce offers numerous benefits, it is essential to address social and ethical consequences.
• Issues like digital inequality, privacy concerns, and the impact on traditional industries require careful consideration.

Ethics and Morality

• Ethics is a branch of philosophy that explores concepts of right and wrong conduct.
• Morality is the differentiation between actions, decisions, and intentions deemed "good" or "bad."

Ethical Aspects of ICT

• The rapid development of information and communication technology (ICT) raises numerous ethical questions.
• Ethical considerations include:
  • The potential for misuse of ICT for harmful purposes.
  • Balancing the benefits of technology with potential risks.
  • Ethical implications of automation and its impact on employment.

Information Rights & Information Duties

• Privacy protection is a critical aspect of E-Commerce.
• Data mining and data usage raise privacy concerns particularly in E-Marketing.
• Steven Levy proposed six basic rules for the ethical use of computers:
  • Unlimited access to information and computer systems.
  • Prioritization of practical experience over theoretical knowledge.
  • Freedom of information.
  • Skepticism towards authority and encouragement of decentralization.
  • Judging hackers based on their actions, not credentials or background.
  • Use of computers for artistic creation and personal betterment.

Proprietary Rights and Duties

• Questions arise regarding the ethical implications of selling goods without ownership or authorization.
• Distinguishing between legal and illegal trade and determining the boundaries between theft and copying are significant challenges.

Accountability and Checks

• Questions arise regarding responsibility for damages caused by software-controlled machines.
• Liability for stolen personal data is a crucial concern.
• Organizations face the challenge of protecting themselves from ICT system breakdowns.
• Accountability for the distribution of inaccurate or reputation-damaging information online needs to be addressed.

Overall Impacts of E-Commerce

• E-Commerce significantly influences the global economy.
• ICT changes the world by impacting productivity, labor markets, and information access.
• E-Commerce increases economic growth through increased productivity and innovation.

Macroeconomic Impact

• E-Commerce facilitates international trade and increases specialization, potentially benefiting both developed and developing nations.
• E-Commerce can impact monetary policy by increasing competition, reducing transaction costs, and lowering prices.
• Governments face challenges regarding the taxation of E-Commerce transactions.

Microeconomic Impact

• E-Commerce can both increase and decrease economies of scale and scope, impacting the threat of entry for new businesses.
• E-Commerce can strengthen or weaken the power of suppliers and customers depending on the industry and specific implementation.
• E-Commerce alters the importance of physical location, customer service, and the nature of business relationships.

Cost Structures

• Traditional economies typically have low allocation costs and high transaction costs, while digital economies often have high allocation costs and low transaction costs.

Economy of Attention

• The "economy of attention" acknowledges the growing competition for user attention in digital environments.
• Effective strategies to capture and retain user attention in a crowded online world become essential.

Externalities of E-Commerce

• E-Commerce creates both positive and negative externalities:
  • Standardization of technologies like TCP/IP enables global collaboration and markets.
  • Increased information density leads to a "flood" of information, creating challenges for information management.
  • Digital copies of intellectual property can be easily replicated and altered, raising copyright concerns.

Globalization

• E-Commerce accelerates globalization through:
  • Global platform creation facilitated by standardized technology.
  • Expansion of global markets and increased opportunities for cross-border trade.
  • Potential for job relocation to lower-cost regions.

Information Density

• E-Commerce increases the volume and accessibility of information, leading to both benefits and challenges:
  • Enhanced data exchange through electronic means.
  • Potential for information overload, requiring effective information management strategies.

Intellectual Properties

• E-Commerce has a mixed impact on intellectual property:
  • Increased distribution and access to intellectual property.
  • Increased risk of unauthorized copying and manipulation of digital content.

Pricing

• E-Commerce promotes price transparency:
  • Suppliers and customers have access to similar information about prices and products.
  • Arbitrarily high prices may be reduced due to increased competition.
• The "supermarket effect" can arise when an overabundance of options leads to information overload and decreased transparency.

This quiz explores the intricate world of Supply Chain Management, covering critical components such as procurement, B2C vs B2B dynamics, and the importance of strong B2B relationships. Understand how effective coordination of various stakeholders can enhance efficiency and improve outcomes in supply chain processes.