Download Figure 8.1 The supply chain.

Chapter 7
Business-to-Business
E-Commerce
B2B E-Commerce

Inter-corporate communication


Exchange business information between
trading partners
Supply chain focus


Improve efficiency of transactions
Between different business entities
Copyright © 2003, Addison-Wesley
Figure 7.1 The supply chain.
Upstream
Downstream
A simplified model
Copyright © 2003, Addison-Wesley
Figure 7.2 A real-world supply chain is
very complex.
Supplier A
Customer A
Supplier B
Frito Lay
Customer B
Wal-Mart
Procter &
Gamble
Supplier E
Customer C
Customer D
Customer E
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Visualizing the Supply Chain

A river analogy

Source – raw materials



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Flow direction – downstream
Tributaries – suppliers
Destination – customers


Upstream
Downstream
Series of linked processes


Value chain – within organization
Supply chain – links value chains
Copyright © 2003, Addison-Wesley
Figure 7.3 This chapter discusses B2B ecommerce.

Evolutionary



Sustainable
B2C
(Customer focus)
Most successful form
of e-commerce
Becoming the way
business does
business
Intra-business
(Value chain focus)
B2B
(Supply chain focus)
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Interorganizational Systems (IOS)


Information system shared by two or
more enterprises
Requires




Compatible information technology
Compatible infrastructures
Difficult to achieve
Initially limited to large firms
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Figure 7.4 Early IOSs required custom
software.
Company A
B to A
Middleware
C to A
Middleware
Custom software
is very expensive
Company B
A to B
Middleware
C to B
Middleware
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Company C
B to C
Middleware
A to C
Middleware
Figure 7.5 Some potential benefits of an
inter-organizational system.
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

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

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Faster transactions
Lower cost transactions
Fewer transaction errors
Reduced cycle time
Reduced inventory
Increased information
flow
Increased customer
satisfaction
Improved cash flows

Early examples



EFT
EDI
Still, limited to large
organizations
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Interconnectivity

Private leased network




Expensive
Not easily scalable
Highly secure and reliable
Value-added network (VAN)




Semiprivate intermediary service
Less expensive but still costly
Scalable
Less secure and less reliable
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Figure 7.6 A value added network (VAN).
Company
A
Company
F
Company
B
VAN Service Provider
Format
conversion
middleware
Company
E
Company
C
Company
D
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Figure 7.7 Connecting through the
Internet.

Public bandwidth

Advantages



Inexpensive
Highly scalable
Company
A
Company
F
The Internet
Drawbacks


Inconsistent
Weak security
Company
B
Company
E
Company
C
Company
D
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Figure 7.8 A VPN utilizes a secure tunnel
to cross the Internet.
Company A
Company B
The Internet
Encrypt and
encapsulate

The tunnel
VPN



Encrypt and
encapsulate

Public network
Tunneling
Encryption
Advantages



Low cost
Good security
Scalable
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Figure 7.9 On a VPN, each packet is
encapsulated to form a new packet.
New VPN packet
VPN protocol
header
Original packet
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VPN protocol
trailer
Figure 7.10 Selecting a connectivity
option.
Option
Cost
Security
Exchange Company
Scalability
need
volume
size
Trading
partners
Secure private network
Value added network
Virtual private network
Public network
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Low/small/few
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Early Supply Chain Integration

American Airlines Sabre

Online, real-time reservation services




Still in use
Baxter Healthcare


Ticket agents
Travel agents
Direct ordering of hospital supplies
Wal-Mart inventory management

Driven by point-of-sale data collection
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Figure 7.11 EDI

Standard syntax






EDI to Internal
Middleware
ANSI X.12
EDIFACT
Internal to EDI
Middleware
Company B
Two conversions


Company A
InternalEDI
EDIinternal
Highly scalable
Templates
Web-based EDI
still in use
Internal to EDI
Middleware
EDI
EDI to Internal
Middleware
Company C
EDI to Internal
Middleware
Internal to EDI
Middleware
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Figure 7.12 An extranet.
Supplier
intranet
Telecommuter



WAN
Links intranets
Standards





Client/server
TCP/IP
Web server
Browser
(Personal firewall)
Extranet
Company A
intranet
Security issues
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Business
partner
intranet
Figure 7.13 Some extensions to HTML.
Acronym
Name
Function
CSS
Cascading style sheets
An HTML specification for attaching style sheets that define page
layout details.
DHTML
Dynamic HTML
A set of HTML extensions that allow a web page to respond to user
input without involving the server.
VRML
Virtual Reality Modeling
Language
A language for creating three dimensional, interactive graphical
images.
XML
Extensible Markup
Language
A proposed replacement for HTML that supports customized tags.
XHTML
Extensible Hypertext
Markup Language
A cross between HTML and XML. An XHTML page can be readily
displayed on such web access devices as handheld computers and
digital phones.
XSL
Extensible Stylesheet
Language
A language for creating style sheets. A style sheet is a template for
laying out a page.
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XML

Extension to HTML

Special tags to mark data fields


XML-enabled middleware can



Data structure, syntax, data type
Extract data values from document
Create dynamic Web pages
XML is extensible

Add and register new XML schema
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Figure 7.14 The XML code for a set of
customer order data.
XML Tags
<?xml version="2.0"?>
<order>
<salesperson>John Doe</salesperson>
<item>Acme rocket engine</item>
<quantity>4</quantity>
<date>
<month>12</month>
<day>13</day>
<year>2002</year>
</date>
<customer>Harry Potter</customer>
</order>
Equivalent Data Structure
Order
Salesperson
Item
Quantity
Date
Month
Day
Year
Customer
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Figure 7.15 Another XML example.
XML Tags
<?xml version="2.0"?>
<order>
<date>12/13/2002</date>
<customer>Acme Company</customer>
<item>
<part-number>T3214B</part-number>
<description>Mounting bracket</description>
<quantity>12</quantity>
</item>
</order>
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Equivalent Data Structure
Order
Date
Customer
Item
Part number
Description
Quantity
B2B Software and Services

E-procurement



Buy-side
Sell-side
Electronic invoice presentment and payment
(EIPP)

Exchange of invoices and payments



EFT
Resembles IBPP
Significant cost reduction potential
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More Software and Services

Logistics integrators


Right stuff, right place, right time
Customer relationship management
(CRM)



Data on customer interactions
Data warehouse
Data mining
Copyright © 2003, Addison-Wesley
Figure 7.16 Supply chain management
intermediaries.
Category
Supplier
Product
Planning and Forecasting
I2 Technologies
Manugistics
SAP
TradeMatrix
NetWorks
APO
Purchasing
Ariba
Commerce One
Oracle
RightWorks
Ariba Sourcing
MarketSet
Supply Chain Exchange
eProcurement
Factory scheduling
Baan
Oracle
QAD
SAP
Baan SCS
Discrete Manufacturing
Supply Chain Optimizer
APO
Order tracking
EXE Technologies
Manhattan Associates
Optum
eFulfillment
MA Fulfill
TradeStream
Market research and
Product design
Agile Software
MatrixOne
PTC
SAP
Agile Anywhere
eMatrix
Windchill
MySAP PLM
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B2B E-Marketplaces


Similar to enterprise portal
Categories


Commodity e-marketplace
Business services e-marketplace


Integration services e-marketplace


Financial services and process support
Facilitates process-to-process integration
Vertical and horizontal e-marketplaces
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Figure 7.17 The Open Directory Project.

Objective


Catalog of
the Web
dmoz.org
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