Exploring Models of B2B E-Commerce and Marketplaces

DEPARTMENT OF COMPUTER APPLICATION UIET -4 INTRODUCTION TO E-COMMERCE BCA-603(N) UNIT-2

CONTENT- Business-to-Business E-commerce Models of B2B Procurement Management E-Procurement Cycle Benefits of E-Procurement Just In Time Delivery(JIT) Benefits of JIT Auction Types of Auction Benefits of Auction Disadvantages of Auction Services of E-Market Place Solutions of B2B E-commerce Electronic Data Interchange EDI Nuts & Bolt Model

BUSINESS-TO-BUSINESS E-COMMERCE B2B e-commerce hold electronic transactions among the business. The internet of all business with companies for suppliers enhance the popularity of B2B e-commerce. In B2B environment purchase orders, invoices, inventory status and business contract handle directly through network. So, many business are connected with each other with the help of internet. B2B e-commerce reduce cycle time and enable business partners to share accurate and timely information utilities and services

LOGISTICS BUSINESS BUSINESS INTERNET BUSINESS BUSINESS INVENTORY

MODELSOF B2B E-COMMERCE The three major B2B e-commerce model determine who controls the market place. MODELS Third party exchange marketplace Seller oriented marketplace Buyer oriented marketplace

1) SELLER ORIENTED MARKET PLACE In this model, the sellers who provide the market such as chemicals, electronics and auto- component come together to generate a common trading place for the buyers. The key point in the seller side model are: Electronic catalogue that can be customize for each large buyer. Forward options In this model, e-commerce is used to increase the sales and reduce selling and advertising cost.

2) BUYER ORIENTED MARKET PLACE This model is used by large companies with significant buying. By participating in a buyer side market place a seller could perform the following: Get better understanding of buying behaviour Carry out sales transactions Carryout presales marketing Carry out post sales analysis Reduce order placement and delivery cycle time Automate the order management

Automate the fulfilment process. SUPPLIERS SUPPLIERS Buyer s Electronic Marketplace Product Listing Request For Quotation SUPPLIERS SUPPLIERS

3) THIRDPARTY EXCHANGE MARKET PLACE Third party controlled marketplace model is controlled by third party not by sellers or buyers A third party control marketplace model offers suppliers a direct channel of communication to buyers through online store front. The third party marketplace is categorized as Vertical distributors for direct materials Vertical exchange for indirect materials 1. 2.

BUYERS SELLERS THIRD PARTY MARKET PLACE BUYERS SELLERS

PROCUREMENT MANAGEMENT A procurement management is a method by which items are purchase from external supplier. The procurement management process involve managing the ordering and approval of items. Procurement refers to activity that is the simple act of purchase and include the planning and policy activities. So, the procurement is purchase material or service of the right quality, right quantity at the right time, at the right price from the right source.

E-PROCUREMENT CYCLE E-procurement simply means purchase the product and services over the internet. The different steps associated with the overall procurement cycle from the order placement to the payment settlement. It includes customers inventory information. E-procurement reduce the operational cost across the whole supply chain and improve the management control. and suppliers

CONNECTIVITY ANALYSE MONITOR PLAN MANAGING INTEGRATION Process control PRECUREMENT MANAGEMENT BUY SOURCE VISIBILITY

E-procurement concept define as: Analysis- Conduct company wise spending to identify and saving the opportunities including supply base relationship. Plan Develop optional sourcing and procurement strategies based on future purchased requirement across the enterprise. Source- Identify and configure optional trading relationship. Buy- Communicate and settle the payment with trading agreement and contact. Monitor- Track internal content and external supplier performance. Process Control Standard common process across the enterprise and supply chain. Procurement Intelligence Provide a single point of all procurement related information. 1. 2. 3. 4. 5. 6. 7.

BENEFITSOF E-PROCUREMENT The benefits of e-procurement is defined as the following: a) Reduce purchase cycle time b) Enhance budget control Increase buyer s productivity d) Improve information management Improve payment process c) e)

JUST IN TIME DELIVERY(JIT) Just In Time is a production strategy that improve a business return on investment by reducing in process inventory. Just in time reduces inventory cost between B2B entities. A main principle of JIT is to keep inventories low and reduces overheads.

BENEFITSOFJIT The benefits of JIT is defined as: a) Reduce setup time b) Flow of goods from warehouses Employee with multiple skills d) Production scheduling and work hour consistency Increase suppliers relationship c) e)

AUCTION An auction is a market by which sellers place offer and buyer make sequential bid. The primary characteristic stage of auction is that prices are determined dynamically by bidding. the internet provides an efficient infrastructure for executing electronic auction that lower cost and with many more involve sellers and buyers.

TYPESOFAUCTION There are two types of auction: Forward Auction The seller use as selling channel to many potential buyers. Items are placed at side for auction and buyers will bid continuously for that item. The highest bidder win the item. Reverse Auction In reverse auction there is one buyer which want to buy a product or service. Suppliers are invited to submit the bid. The reverse auction is the most common auction for large purchase. 1. 2.

BENEFITSOFAUCTION To Seller- Increased revenue Optimal price setting Remove of expensive intermediates Better customer relationships Lower transaction costs To Buyers- Opportunities to find unique item Lower transaction cost Better relationship with sellers Entertainment

DISADVANTAGESOFAUCTION Only invited participant can participate Lack of security Expensive auction software Order fulfilment cost Long cycle time

SERVICESOFE-MARKETPLACE E-Infrastructure- It may be considered as an integrated of information and communication technology. It implements a more efficient way for all the market to works on global. There are different types of e-infrastructure layers which are- Computing infrastructure Scientific data Communication network E-Content- E-content is platform which is provided by many organisation with the help of network. It provides the information and this information can informative.

SOLUTIONSOFB2BE-COMMERCE Experts provides following kind of B2B e-commerce solutions. These are Company to company well solution product supply and procurement exchange solution. Third party type solution Information solution Auction system

ELECTRONICDATAINTERCHANGE EDI is a communication standard that enable the electronic transfer of routine document such as purchase order between the business. ELEMENTS OF EDI Basically the EDI has four elements- STRUCTURED DATA AGREED MESSAGE STANDARD FROM ONE COMPUTER SYSTEM TO ANOTHER BY ELECTRONIC MEAN

CHARACTERISTICS OF EDI EDI has following characteristics- BUSINESS TRANSACTION MESSAGE DATA FORMATTING STANDARD EDI TRANSLATOR

EDINUTS & BOLTMODEL EDI model required for sending and receiving EDI message. EDI defied by its technology and technial elements of EDI system are: EDI STANDARD EDI SOFTWARE EDI NETWORK EDI AGREEMENTS

EDISTANDARD EDI standard are basically data standard in the sense that they lay down the syntax and semantics of data being exchanged. EDI standard provide are attempt to provide or attempt to provide a standard for data interchange. That is- a) Independent of special interest of any party in the trading network. b) Independent of hardware and software. Data requirement for any given transaction. EDI standard provide a common language for the interchange of standard transaction. c)

EDISOFTWARE EDI software consist of computer instruction that translate the information from unstructured company specific format to the structured format and then communicate the EDI message from sender to receiver. EDI software also receive the message and translate from standard format to company specific format. EDI software was available for mainframe, minicomputer and microcomputer.

The EDI requirements as follows- 1) Computer 2) A communication interface 3) Appropriate software LAYERS OF EDI SOFTWARE EDI BUSINESS APPLICATION EDI TRANSLATION EDI COMMUNICATION

EDINETWORK EDI documents are exchange over communication network which connects trading partner to one another. These documents are stored in user mail boxes on network of EDI server The EDI message is divided in <html> to two parts- <head> .</head> 1) HEAD A set of heading field of <body> each one is an information giving a . characteristics to the EDI message. . 1) BODY A sequence of the text are </body> are the part of the message. </html>

EDI COMMUNICATION CHANNEL There are different types of communication channel which are : DIRECT LINK It is the most straight forward communication method. They allow a company to dial up and connect directly to partners of organisation. PRIVATE NETWORK A private network provided by a hub company. The hub handles protocol conversion at over net. VALUE ADDED NETWORK A VAN play an intermediate role to delivery service that provide reliable delivery of documents in a secure environment. 1) 2) 3)

EDIAGREEMENT The EDI agreement is a document (normally on paper) and sign by both trading partners before electronic trading start. The agreement specify the following: 1) The time scale for processing EDI message. 2) The time that copies of the message will be retained. 3) The procedure for settlement and any disputes. 4) The legal advisor also settled any disputes.

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