Chapter 5 Key Concepts

B2B Strategies

Purchasing and Logistics
Procurement:

Identify Vendors
Evaluate Vendors
Select Product
Place orders
Track receipt
Process payment

Direct vs. Indirect Materials:
MRO – maintenance, repair and operations
Anything that goes into creating your final product (Raw Materials, MRO)

Logistics Management:
Requires understanding of accounting processes and logistics

Support Services & KM:
Value added services/support services throughout the entire process (supply chain)
Knowledge Management – of ‘captured’ information learned throughout all support service processes

Electronic Data Interchange

How EDI works:
Paper based transfer
EDI-based transfer

ANSI ASC X12
UN EDIFACT

Direct vs. VAN’s:
Value Added Network creates an audit trail (security)
Intermediary for business documents

Internet EDI
Security Issues associated with the fact that EVERYTHING is on the web
Financial EDI
Exchange of money ACH – automated clearing house intermediary

Supply Chain Management (SCM)

Upstream Management:
What goes into making a product?
Downstream Management:
What goes into getting that product to your customer?

Advantages:
Share customer demand info
Notify or design modifications
Exchange design schematics
Increase processing speed
Reduce handling costs
Reduce human (re-key) error
Reduce and inform of defects

Challenges:
Trust with partners
Being cost-effective

B2B Models and e-Marketplaces

Private Stores
Customer Portals
For individual customers and small businesses

Industry Marketplaces
Consortium Marketplaces
Aggregated demand from groups of businesses
Private Company Marketplaces