1.1 Electronic Commerce :-
Electronic commerce, commonly known as E-commerce is trading in products or services using computer networks, such as the Internet.
Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems.
Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction’s life cycle, although it may also use other technologies such as e-mail.
Definition of E-commerce :-
Sharing business information, maintaining business relationships and conducting business transactions using computers connected to telecommunication network is called E-Commerce.
1.2 E-Commerce Categories :-
1. Electronic Markets
Present a range of offerings available in a market segment so that the purchaser can compare the prices of the offerings and make a purchase decision.
Example: Airline Booking System
2. Electronic Data Interchange (EDI)
- It provides a standardized system
- Coding trade transactions
- Communicated from one computer to another without the need for printed orders and invoices & delays & errors in paper handling
- It is used by organizations that a make a large of regular transactions
Example: EDI is used in the large market chains for transactions with their suppliers
3. Internet Commerce
- It is use to advertise & make sales of wide range of goods & Services.
- This application is for both business to business & business to consumer transactions.
Example: The purchase of goods that are then delivered by post or the booking of tickets that can be picked up by the clients when they arrive at the event.
1.3 Advantages Of E-commerce :-
- Buying/selling a variety of goods and services from one’s home or business
- Anywhere, anytime transaction
- Can look for lowest cost for specific goods or service
- Businesses can reach out to worldwide clients – can establish business partnerships
- Order processing cost reduced
- Electronic funds transfer faster
- Supply chain management is simpler, faster, and cheaper using ecommerce
- Can order from several vendors and monitor supplies.
- Production schedule and inventory of an organization can be inspected by cooperating supplier who can in-turn schedule their work.
1.4 Disadvantages Of E-commerce :-
- Electronic data interchange using EDI is expensive for small businesses
- Security of internet is not very good – viruses, hacker attacks can paralise e-commerce
- Privacy of e-transactions is not guaranteed
- E-commerce de-personalises shopping
1.5 Threats of E-commerce :-
- Hackers attempting to steal customer information or disrupt the site.
- A server containing customer information is stolen.
- Imposters can mirror your ecommerce site to steal customer money
- Authorised administrators/users of an ecommerce website downloading hidden active content that attacks the ecommerce system.
- A disaffected employee disrupting the ecommerce system.
- It is also worth considering where potential threats to your ecommerce site might come from, as identifying potential threats will help you to protect your site. Consider:
- Who may want to access your ecommerce site to cause disruption or steal data; for example competitors, ex-employees, etc.
- What level of expertise a potential hacker may possess; if you are a small company that would not be likely to be considered a target for hackers then expensive, complex security may not be needed.
1.6 Features of E-Commerce :-
Internet/Web technology is The marketplace is extended beyond traditional available everywhere: at work, at home, and boundaries and is removed from a temporal and elsewhere via mobile devices, anytime. geographic location. ―Marketspace‖ is created; shopping can take place anywhere. Customer convenience is enhanced, and shopping costs are reduced.
Global reach :-
The technology reaches Commerce is enabled across cultural and across national boundaries, around the earth. national boundaries seamlessly and without modification.
―Marketspace‖ includes potentially billions of consumers and millions of businesses worldwide.
Universal standards :-
There is one set of There is one set of technical media standards technology standards, namely Internet across the globe.
Video, audio, and text messages Video, audio, and text marketing messages are are possible. integrated into a single marketing message and consuming experience.
The technology works Consumers are engaged in a dialog that through interaction with the user. dynamically adjusts the experience to the individual, and makes the consumer a co- participant in the process of delivering goods to the market.
Information density :-
The technology Information processing, storage, and reduces information costs and raises quality. communication costs drop dramatically, while currency, accuracy, and timeliness improve greatly. Information becomes plentiful, cheap, and accurate.
The Personalization of marketing messages and technology allows personalized messages to customization of products and services are be delivered to individuals as well as groups. based on individual characteristics.
1.7 Business models of e-commerce :-
There are mainly 4 types of business models based on transaction party.
In a Business-to-Consumer E-commerce environment, companies sell their online goods to consumers who are the end users of their products or services. Usually, B2C E-commerce web shops have an open access for any visitor, meaning that there is no need for a person to login in order to make any product related inquiry.
In a Business-to-Business E-commerce environment, companies sell their online goods to other companies without being engaged in sales to consumers. In most B2B E-commerce environments entering the web shop will require a log in. B2B web shop usually contains customer-specific pricing, customer-specific assortments and customer-specific discounts.
In a Consumer-to-Business E-commerce environment, consumers usually post their products or services online on which companies can post their bids. A consumer reviews the bids and selects the company that meets his price expectations.
In a Consumer-to-Consumer E-commerce environment consumers sell their online goods to other consumers. A well-known example is eBay.
1.8 E-Governance :-
E-governance is the application of information and communication technology (ICT) for delivering government services, exchange of information communication transactions, integration of various stand-alone systems and services between government-to-customer (G2C), government-to-business (G2B), government-to-government (G2G) as well as back office processes and interactions within the entire government framework.
Through e-governance, government services will be made available to citizens in a convenient, efficient and transparent manner. The three main target groups that can be distinguished in governance concepts are government, citizens and businesses/interest groups. In e-governance there are no distinct boundaries.
Business – to – Government (B2G)
B2G model is a variant of B2B model. Such websites are used by government to trade and exchange information with various business organizations. Such websites are accredited by the government and provide a medium to businesses to submit application forms to the government.
Government – to – Business (G2B)
Government uses B2G model website to approach business organizations. Such websites support auctions, tenders and application submission functionalities.
Government – to – Citizen (G2C)
Government uses G2C model website to approach citizen in general. Such websites support auctions of vehicles, machinery or any other material. Such website also provides services like registration for birth, marriage or death certificates. Main objectives of G2C website are to reduce average time for fulfilling people requests for various government services.
1.9 Different Types of Networking For E-Commerce :-
The Internet is a global network of computers that allows people to send email, view web sites, download files such as mp3 and images, chat, post messages on newsgroups and forums and much more.
The Internet was created by the Advanced Research Projects Agency (ARPA) of the U.S. government in 1960’s and was first known as the ARPANet. At this stage the Internet’s first computers were at academic and government institutions and were mainly used for accessing files and to send emails. From 1983 onwards the Internet as we know it today started to form with the introduction of the communication protocol TCP/IP to ARPANet. Since 1983 the Internet has accommodated a lot of changes and continues to keep developing.
The last two decades has seen the Internet accommodate such things as network LANs and ATM and frame switched services. The Internet continues to evolve with it becoming available on mobile phones and pagers and possibly on televisions in the future.
Advantages of internet :-
There many advantages to using the internet such as :-
Email is now an essential communication tool in business. It is also excellent for keeping in touch with family and friends. The advantage to email is that it is free ( no charge per use) when compared to telephone, fax and postal services.
There is a huge amount of information available on the internet for just about every subject known to man, ranging from government law and services, trade fairs and conferences, market information, new ideas and technical support.
Many services are now provided on the internet such as online banking, job seeking and applications, and hotel reservations. Often these services are not available off-line or cost more.
Buy or sell products
The internet is a very effective way to buy and sell products all over the world.
Communities communities of all types have sprung up on the internet. Its a great way to meet up with people of similar interest and discuss common issues.
A Leading-Edge Image
Presenting your company or organization as leading-edge shows your customers and prospective customers that you are financially strong, technologically savvy, and ready for the 21st century. And that you care enough about your customers to take advantage of new technologies for their benefit. And finally that you have the resources to support your clients in the most beneficial manner possible.
More and more advertisers on television, radio, magazines, and newspapers are including a Web address. Now is the time to avoid playing catch-up later.
Improved Customer Service
The companies are available to their customers 24 hours a day, 7 days a week. The Internet never sleeps. Whenever customer needs information about any company, products or services, they can access the company‘s Web Page.
The Internet is a global system. Latest estimates are that there are about 40 million people with access to the Internet, and this number is growing every day. By simply posting a Web Page you are also addressing International markets.
Low Cost Marketing
Imagine developing a full color brochure without having to incur the costs of proofs, printers, wasted paper, long lead times between revisions, and more. Then imagine a full color product or services brochure that is interactive and which incorporates text, graphics, audio, and/or video. One that can be immediately updated without incurring the usual costs of product material updates.
Low Cost Selling
Without the cost of direct selling potential customers can get detailed information about your products or services at any time. And they can easily order your products over the Internet, or request additional information be sent to them via a request form on your Web page.
Lower Communication Costs
Your time, and your employees time, is valuable. Most businesses and organizations spend time answering the same questions over and over again. With a Web page you can make the answers available to everyone immediately. You can also update your Wed page with new information quickly and easily.
- An intranet is a computer network that uses Internet Protocol technology to share information, operational systems, or computing services within an organization. This term is used in contrast to extranet, a network between organizations, and instead refers to a network within an organization.
- The objective is to organize each individual’s desktop with minimal cost, time and effort to be more productive, cost efficient, timely, and competitive.
- An intranet may host multiple private websites and constitute an important component and focal point of internal communication and collaboration.
- Any of the well known Internet protocols may be found in an intranet, such as HTTP (web services), SMTP (e-mail), and FTP (file transfer protocol). Internet technologies are often deployed to provide modern interfaces to legacy information systems hosting corporate data.
Uses of Intranet :-
- Increasingly, intranets are being used to deliver tools, e.g. collaboration (to facilitate working in groups and teleconferencing) or sophisticated corporate directories, sales and customer relationship management tools, project management etc., to advance productivity.
- Intranets are also being used as corporate culture-change platforms. For example, large numbers of employees discussing key issues in an intranet forum application could lead to new ideas in management, productivity, quality, and other corporate issues.
- In large intranets, website traffic is often similar to public website traffic and can be better understood by using web metrics software to track overall activity. User surveys also improve intranet website effectiveness. Larger businesses allow users within their intranet to access public internet through firewall servers. They have the ability to screen messages coming and going keeping security intact.
- When part of an intranet is made accessible to customers and others outside the business, that part becomes part of an extranet. Businesses can send private messages through the public network, using special encryption/decryption and other security safeguards to connect one part of their intranet to another.
- Intranet user-experience, editorial, and technology teams work together to produce in-house sites. Most commonly, intranets are managed by the communications, HR or CIO departments of large organizations, or some combination of these.
- Because of the scope and variety of content and the number of system interfaces, intranets of many organizations are much more complex than their respective public websites. Intranets and their use are growing rapidly.
- Workforce productivity :- Intranets can help users to locate and view information faster and use applications relevant to their roles and responsibilities. With the help of a web browser interface, users can access data held in any database the organization wants to make available, anytime and — subject to security provisions — from anywhere within the company workstations, increasing employees’ ability to perform their jobs faster, more accurately, and with confidence that they have the right information.
- Time :- Intranets allow organizations to distribute information to employees on an as-needed basis; Employees may link to relevant information at their convenience, rather than being distracted indiscriminately by email.
- Communication :- Intranets can serve as powerful tools for communication within an organization, vertically strategic initiatives that have a global reach throughout the organization. By providing this information on the intranet, staff have the opportunity to keep up-to-date with the strategic focus of the organization. Some examples of communication would be chat, email, and/or blogs. A great real world example of where an intranet helped a company communicate is when Nestle had a number of food processing plants in Scandinavia. Their central support system had to deal with a number of queries every day.
- Web publishing :- allows cumbersome corporate knowledge to be maintained and easily accessed throughout the company using hypermedia and Web technologies. Examples include: employee manuals, benefits documents, company policies, business standards, news feeds, and even training, can be accessed using common Internet standards (Acrobat files, Flash files, CGI applications). Because each business unit can update the online copy of a document, the most recent version is usually available to employees using the intranet.
- Business operations and management: Intranets are also being used as a platform for developing and deploying applications to support business operations and decisions across the internetworked enterprise.
- Cost-effective :- Users can view information and data via web-browser rather than maintaining physical documents such as procedure manuals, internal phone list and requisition forms. This can potentially save the business money on printing, duplicating documents, and the environment as well as document maintenance overhead.
- Enhance collaboration :- Information is easily accessible by all authorised users, which enables teamwork.
- Cross-platform capability :- Standards-compliant web browsers are available for Windows, Mac, and UNIX.
- Built for one audience :- Many companies dictate computer specifications which, in turn, may allow Intranet developers to write applications that only have to work on one browser (no cross-browser compatibility issues).
- Promote common corporate culture :- Every user has the ability to view the same information within the Intranet.
- Immediate updates :- When dealing with the public in any capacity, laws, specifications, and parameters can change. Intranets make it possible to provide your audience with “live” changes so they are kept up-to-date, which can limit a company’s liability.
- Supports a distributed computing architecture :- The intranet can also be linked to a company‘s management information system, for example a time keeping system.
1.1 Wireless Application Protocol :-
WAP is a technical standard for accessing information over a mobile wireless network.
A WAP browser is a web browser for mobile devices such as mobile phones that uses the protocol.
WAP is a specification for a set of communication protocols to standardize the way that wireless devices, such as cellular telephones and radio transceivers, can be used for Internet access, including e-mail, the World Wide Web, newsgroups, and instant messaging.
The WAP layers are :-
- Wireless Application Environment (WAE)
- Wireless Session Layer (WSL)
- Wireless Transport Layer Security (WTLS)
- Wireless Transport Layer (WTP)
Web security :-
- It is a branch of Information Security that deals specifically with security of websites, web applications and web services.
- At a high level, Web application security draws on the principles of application security but applies them specifically to Internet and Web systems. Typically web applications are developed using programming languages such as PHP, Java EE, Java, Python, Ruby, ASP.NET, C#, VB.NET or Classic ASP.
2.1 Technological convergence:-
- Technological convergence is the tendency that as technology changes, different technological systems sometimes evolve toward performing similar tasks.
- Digital convergence refers to the convergence of four industries into one conglomerate, ITTCE (Information Technologies, Telecommunication, Consumer Electronics, and Entertainment).Previously separate technologies such as voice data and productivity applications, and video can now share resources and interact with each other synergistically.
- Telecommunications convergence, network convergence or simply convergence are broad terms used to describe emerging telecommunications technologies, and network architecture used to migrate multiple communications services into a single network.
- Convergence in this instance is defined as the interlinking of computing and other information technologies, media content, and communication networks that has arisen as the result of the evolution and popularization of the Internet as well as the activities, products and services that have emerged in the digital media space.
- Convergent services, such as VoIP, IPTV, Mobile TV, Smart TV, and others, tend to replace the older technologies and thus can disrupt markets. IP-based convergence is inevitable and will result in new service and new demand in the market.
2.2 Technology Implications :-
Convergent solutions include both fixed-line and mobile technologies. Recent examples of new, convergent services include:
- Using the Internet for voice telephony
- Video on demand
- Fixed-mobile convergence
- Mobile-to-mobile convergence
- Location-based service
- Integrated products and bundles
Convergent technologies can integrate the fixed-line with mobile to deliver convergent solutions. Convergent technologies include :-
- IP Multimedia Subsystem
- Session Initiation Protocol
- Voice over IP
- Voice call continuity
- Digital video broadcasting – handheld
2.3 Collaborative Product Development :-
- CPD is a business strategy, work process and collection of software applications that facilitates different organizations to work together on the development of a product. It is also known as collaborative product definition management (cPDM).
- Collaborative Product Development helps individual users and companies manage, share and view your CAD projects without the cost and complexity of purchasing an entire PDM or PLM solution. CPD comes in the form of a Software as a service delivery model, which allows for rapid iterations and little or no downloads and installs.
- Exactly what technology comes under this title does vary depending on whom one asks; however, it usually consists of the Product Lifecycle Management (PLM) areas of: Product Data Management (PDM); Product visualization; team collaboration and conferencing tools; and supplier sourcing software. It is generally accepted as not including CAD geometry tools, but does include data translation technology.
Technologies and methods used :-
Clearly general collaborative software such as email and chat (instant messaging) is used within the CPD process. One important technology is application and desktop sharing, allowing one person to view what another person is doing on a remote machine. For CAD and product visualization applications an ‗appshare‘ product that supports OpenGL graphics is required. Another common application is Data sharing via Web based portals.
Specific to product data
With product data an important addition is the handling of high volumes of geometry and metadata. Exactly what techniques and technology is required depends on the level of collaboration being carried out and the commonality (or lack thereof) of the partner sites‘ systems.
Specific to PLM and CAx collaboration
Collaboration using PLM and CAx tools requires technology to support the needs of :-
- People: Personnel of different disciplines and skill levels;
- Organizations: Organizations throughout an enterprise or extended enterprise with different rules, processes and objectives;
- Data: Data from different sources in different Formats.
Appropriate technologies are required to support collaboration across these boundaries.
» People :-
Effective PLM collaboration will typically require the participation of people who do not have high level CAD skills. This requires improved user interfaces including tailorable user interfaces that can be tailored to the skill level and specialty of the user.
Improved visualization capabilities, especially those that provide a meaningful view of complex information such as the results of a fluid flow analysis will leverage the value of all participants in the collaboration process. Effective collaboration requires that a participant be freed from the burden of knowing the intent history typically imbedded within and constricting the use of parametric models.
» Organizations :-
Community collaboration requires that companies, suppliers, and customers share information in a secure environment, ensure compliance with enterprise and regulatory rules and enforce the process management rules of the community as well as the individual organizations.
» Data :-
The most basic collaboration data need is the ability to operate in a MultiCAD environment. That is, however, only the beginning. Models from multiple CAD sources must be assembled into an active digital mockup allowing change and/or design in context.
2.4 Content Management System :-
- A content management system (CMS) is a computer application that allows publishing, editing and modifying content, organizing, deleting as well as maintenance from a central interface. Such systems of content management provide procedures to manage workflow in a collaborative environment.
- CMSs are often used to run websites containing blogs, news, and shopping. Many corporate and marketing websites use CMSs. CMSs typically aim to avoid the need for hand coding, but may support it for specific elements or entire pages.
Main features of CMS :-
- The function and use of content management systems is to store and organize files, and provide version-controlled access to their data. CMS features vary widely. Simple systems showcase a handful of features, while other releases, notably enterprise systems, offer more complex and powerful functions. Most CMS include Web-based publishing, format management, revision control (version control), indexing, search, and retrieval. The CMS increments the version number when new updates are added to an already- existing file. Some content management systems also support the separation of content and presentation.
- A CMS may serve as a central repository containing documents, movies, pictures, phone numbers, scientific data. CMSs can be used for storing, controlling, revising, semantically enriching and publishing documentation.
The content management system (CMS) has two elements :-
- Content management application (CMA) is the front-end user interface that allows a user, even with limited expertise, to add, modify and remove content from a Web site without the intervention of a
- Content delivery application (CDA) compiles that information and updates the Web
2.5 Web Traffic :-
Web traffic is the amount of data sent and received by visitors to a web site.
Web traffic is measured to see the popularity of web sites and individual pages or sections within a site. This can be done by viewing the traffic statistics found in the web server log file, an automatically generated list of all the pages served. A hit is generated when any file is served.
The following types of information are often collated when monitoring web traffic:
- The number of visitors.
- The average number of page views per visitor – a high number would indicate that the average visitors go deep inside the site, possibly because they like it or find it useful.
- Average visit duration – the total length of a user’s visit. As a rule the more time they spend the more they’re interested in your company and are more prone to contact.
- Average page duration – how long a page is viewed for. The more pages viewed, the better it is for your company.
- Domain classes – all levels of the IP Addressing information required to deliver Webpages and content.
- Busy times – the most popular viewing time of the site would show when would be the best time to do promotional campaigns and when would be the most ideal to perform maintenance.
- Most requested pages – the most popular pages.
- Most requested entry pages – the entry page is the first page viewed by a visitor and shows which are the pages most attracting visitors.
- Most requested exit pages – the most requested exit pages could help find bad pages, broken links or the exit pages may have a popular external link.
- Top paths – a path is the sequence of pages viewed by visitors from entry to exit, with the top paths identifying the way most customers go through the site
- Referrers; The host can track the (apparent) source of the links and determine which sites are generating the most traffic for a particular page.
2.6 Content marketing :-
- Content marketing is any marketing that involves the creation and sharing of media and publishing content in order to acquire and retain customers.
- It is a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly-defined audience — and, ultimately, to drive profitable customer action.
- Basically, content marketing is the art of communicating with your customers and prospects without selling.
- It is non-interruption marketing. Instead of pitching your products or services, you are delivering information that makes your buyer more intelligent.
2.7 Call centre :-
- A call centre is a centralised office used for receiving or transmitting a large volume of requests by telephone.
- An inbound call centre is operated by a company to administer incoming product support or information inquiries from consumers.
- Outbound call centers are operated for telemarketing, solicitation of charitable or political donations, debt collection and market research.
- A contact centre is a location for centralised handling of individual communications, including letters, faxes, live support software, social media, instant message, and e-mail.
- A call centre has an open workspace for call centre agents, with work stations that include a computer for each agent, a telephone set/headset connected to a telecom switch, and one or more supervisor stations. It can be independently operated or networked with additional centres, often linked to a corporate computer network, including mainframes, microcomputers and LANs.
- The contact centre is a central point from which all customer contacts are managed. Through contact centres, valuable information about company are routed to appropriate people, contacts to be tracked and data to be gathered. It is generally a part of company‘s customer relationship management.
2.8 Components of call centre :-
There are 6 key components which should be integrated into the call centre operation :-
- Location, building and facilities
- Finance and business management
» Location, building and facilities :-
Where a centre is located is critical in terms of the cost of the building but more importantly the ability to recruit and retain employees to work in the centre. The ease and cost to get to a centre is important for those employed in the centre but also in the integration with the Head Office functions that the centre needs to work with. The facilities and working environment is more critical than for functional line departments because of the intensity with which the Agents have to sit at their desks and the need to manage resource patterns. Visiting a call centre and looking at how it might feel to work in it will be extremely telling as to how good the centres performance is, but also how the organisation view and treat their employees.
» Customer :-
Customers can be anyone, and the Agent needs to have the skills to be able to adapt their style and vocabulary to suit different customer types. The Agent talks to more customers in any one day that any other person in the organisation. If you want to know what is going on with customers, ask the Agents! With average call durations of less than 3 minutes, how do you form a relationship and build loyalty from a customer in that time. That is one of the biggest challenges that the Agents face, especially given many customers do not like the impersonal touch that call centres often provide.
» Technology :-
There are significant amounts of technology available and it is very easy to be bamboozled by it all! It very much depends on the size and nature of your business as to what you require. The basic equipment to handle calls is the Automated Call Distributor but these can range from basic to a Rolls Royce! Many centres do not fully utilise the technology that they have. In addition there is usually a disjoint between what the technology can do and what it is actually used for.
» Process :-
Every centre has a multitude of processes, but the biggest challenge that it faces is to understand the end to end process from the customer perspective. The customer journey is what happens from the point in time when a customer decides to contact you through to the completion of that request or transaction. How long does this journey take and what does it feel like taking the steps along the way. How long is spent waiting? Does the agent have the customer details to hand? Can the agent answer the query first time? Does the fulfilment when expected? One very easy but critical way of looking at the customer journey is to mystery shop the centre and to see what it really feels like to be the customer. Put yourselves in the shoes of your key customer demographic type and call your own centre today.
» People :-
People are the most critical asset in a call centre as it is they who really deliver the business performance. Unfortunately the investment and perception of your staff may be rather poor. The people (Agents) often have to deal with difficult situations when things have gone wrong in your organisation and deal with a large volumes of calls that result, whilst not always having the necessary training or skills. However, the teams in Centres can be very resilient and are often very social, making the centre a great place to work. There are many different roles on offer and so they can a good environment to start and develop a career.
» Finance and business management :-
There will be more management information statistics in a call centre than in any other part of the organisation. The centre is measured from every different angle but unfortunately, this does not always give a complete picture!
One of the most challenging roles is the planning, measuring and reviewing of performance because so many centres are under pressure from calls and other expectations, that being able to step back and take an objective view maybe difficult. Most centres are run to very tight budgets so factors such as turnover of staff will have a huge impact.
2.9 Customer-Premises Equipment :-
Customer-premises equipment or customer-provided equipment (CPE) is any terminal and associated equipment located at a subscriber’s premises and connected with a carrier’s telecommunication channel at the demarcation point . The demarc is a point established in a building or complex to separate customer equipment from the equipment located in either the distribution infrastructure or central office of the communications service provider.
CPE generally refers to devices such as telephones, routers, switches, residential gateways (RG), set-top boxes, fixed mobile convergence products, home networking adapters and Internet access gateways that enable consumers to access communications service providers’ services and distribute them around their house via a local area network (LAN).
2.10 Supply Chain Management :-
It is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.
Supply chain management must address the following problems :-
- Distribution Network Configuration: Number and location of suppliers, production facilities, distribution centers, warehouses and customers.
- Distribution Strategy: Centralized versus decentralized, direct shipment, cross docking, pull or push strategies, third party logistics.
- Information: Integrate systems and processes through the supply chain to share valuable information, including demand signals, forecasts, inventory and transportation.
- Inventory Management: Quantity and location of inventory including raw materials, work- in-process and finished goods.
2.11 Features Of Supply Chain Management :-
In electronic commerce, supply chain management has the following features.
- An ability to source raw material or finished goods from anywhere in the world.
- A centralized, global business and management strategy with flawless local execution.
- On-line, real-time distributed information processing to the desktop, providing total supply chain information visibility.
- The ability to manage information not only within a company but across industries and enterprises.
- The seamless integration of all supply chain processes and measurements, including third- party suppliers, information systems, cost accounting standards, and measurement systems.
- The development and implementation of accounting models such as activity based costing that link cost to performance are used as tools for cost reduction.
- A reconfiguration of the supply chain organization into high-performance teams going from the shop floor to senior management.
2.12 Components Of Supply Chain Management :-
The following are five basic components of SCM.
» Plan :-
This is the strategic portion of SCM. You need a strategy for managing all the resources that go toward meeting customer demand for your product or service. A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high quality and value to customers.
» Source :-
Choose the suppliers that will deliver the goods and services you need to create your product. Develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. And put together processes for managing the inventory of goods and services you receive from suppliers, including receiving shipments, verifying them, transferring them to your manufacturing facilities and authorizing supplier payments.
» Make :-
This is the manufacturing step. Schedule the activities necessary for production, testing, packaging and preparation for delivery. As the most metric-intensive portion of the supply chain, measure quality levels, production output and worker productivity.
» Deliver :-
This is the part that many insiders refer to as logistics. Coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments.
» Return :-
The problem part of the supply chain. Create a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products.
2.13 Measuring A Supply Chain’s Performance :-
The performance of a supply chain is evaluated by how it reduces cost or increases value. SCM performance monitoring is important; in many industries, the supply chain represents roughly 75 percent of the operating budget expense. Three common measures of performance are used when evaluating SCM performance :
- Efficiency focuses on minimizing cost by decreasing the inventory investment or value relative to the cost of goods sold. An efficient firm is therefore one with a higher inventory turnover or fewer weeks‘ worth of inventory on hand.
- Responsiveness focuses on reduction in both inventory costs and missed sales that comes with a faster, more flexible supply chain. A responsive firm is proficient in an uncertain market environment, because it can quickly adjust production to meet demand.
- Effectiveness of the supply chain relates to the degree to which the supply chain creates value for the custome Effectiveness-focused supply chains are called ―value chains‖ because they focus more on creating customer value than reducing costs and improving productivity.
To examine the effect of the Internet and electronic commerce on the supply chain is to examine the impact the Internet has on the efficiency, responsiveness, effectiveness, and overall performance of the supply chain.
2.14 Advantages of Internet/E-Commerce Integrated Supply Chain :-
The primary advantages of Internet utilization in supply chain management are speed, decreased cost, flexibility, and the potential to shorten the supply chain.
» Speed :-
A competitive advantage accrues to those firms that can quickly respond to changing market conditions. Because the Internet allows near instantaneous transfer of information between various links in the supply chain, it is ideally suited to help firms keep pace with their environments. Many businesses have placed a priority upon real-time information regarding the status of orders and production from other members of the supply chain.
» Cost decrease :-
Internet-based electronic procurement helps reduce costs by decreasing the use of paper and labor, reducing errors, providing better tracking of purchase orders and goods delivery, streamlining ordering processes, and cutting acquisition cycle times.
» Flexibility :-
The Internet allows for custom interfaces between a company and its different clients, helping to cost-effectively establish mass customization. A manufacturer can easily create a custom template or Web site for a fellow supply chain member with pre-negotiated prices for various products listed on the site, making re-ordering only a mouse click away. The information regarding this transaction can be sent via the Internet to the selling firm‘s production floor and the purchasing firm‘s purchasing and accounting departments. The accuracy and reliability of the information is greater than the traditional paper and pencil transaction, personnel time and expense is reduced, and the real-time dissemination of the relevant information to interested parties improves responsiveness. These advantages can benefit both firms involved in the transaction.
» Shortening the supply chain :-
Dell computers has become a classic example of the power the Internet can have on a supply chain. Dell helped create one of the first fully Internet-enabled supply chains and revolutionized the personal-computer industry by selling directly to businesses and consumers, rather than through retailers and middlemen. In mid-1996, Dell began allowing consumers to configure and order computers online. By 1998, the company recorded roughly $1 billion in ―pure‖ Internet orders. By reducing sales costs and attracting customers who spend more per transaction, Dell estimates that it yields 30 percent greater profit margins on Internet sales compared to telephone sales.
2.15 Disadvantages of Internet/E-Commerce Integrated Supply Chain :-
» Increased interdependence :-
Increased commoditization, increased competition, and shrinking profit margins are forcing companies to increase outsourcing and subcontracting to minimize cost. By focusing on its core competencies, a firm should be able to maximize its economies of scale and its competitiveness. However, such a strategy requires increased reliance and information sharing between members of the supply chain. Increased dependency on various members of the supply chain can have disastrous consequences if these supply chain members are unable to handle the functions assigned to them.
» The costs of implementation :-
Implementation of a fully-integrated Internet-based supply chain is expensive. This expense includes hardware cost, software cost, reorganization cost, and training costs. While the Internet promises many advantages once it is fully integrated into a supply chain, a significant up front investment is needed for full deployment.
» Keeping up with the change in expectations :-
Expectations have increased as Internet use has become part of daily life. When customers send orders electronically, they expect to get a quick confirmation and delivery or denial if the order can not be met. Increasingly, in this and other ways, customers are dictating terms and conditions to suppliers. The introduction of Internet-based supply chains make possible the change to a ―pull‖ manufacturing strategy replacing the traditional ―push‖ strategy that has been the standard in most industries.