Ecomm ch 11
John Casesa
"One way to stay competitive is to find low-cost parts, wherever they are," says, _____ an auto industry analyst for Merrill Lynch. "It's about car companies needing to find the best parts at the best prices."
contract direct
80% of interfirm trade involves _____ purchasing of _____ goods, and 20% involves spot purchasing of indirect goods.
Electronic Data Interchange (EDI)
A Broadly defined communications protocol for exchanging documents among computers using technical standards developed by the American National Standards Institute (ANSI X12 standards) and international bodies such as the United Nations (EDIFACT standards).
collaborative
A _____ commerce application includes a central data repository where employees at several different firms can store engineering drawings and other documents; A workflow engine determines who can see this data and what rules will apply for displaying the data in individual workstations
Trans-organizational
A business process that requires at least two independent firms to perform; originate in and closely involved in the manufacturing and related support industries
sustainable
A call for business to take social and ecological interests, and not just corporate profits, into account in all their decision making out the firm refers to a _____ business.
Fair Labor Association (FLA)
A coalition of business firms with offshore production and global supply chains, universities, and private organizations; interviews workers, unannounced visits to factories to track progress, and investigates complaints for member firms; one of the major international level standard-setting organizations
Electronic data interchange (EDI)
A computer-to-computer communications standard for sharing business documents (such as invoices, purchase orders, shipping bills, product stocking numbers) and settlement information among a small number of firms
Edistributor
A horizontal spot purchasing, indirect input net marketplace.
Eprocurment
A horizontallong term sourcing, indirect input net marketplace.
Tight coupling
A method for ensuring that suppliers precisely deliver the ordered parts, at a specific time and particular location, to ensure the production process is not interrupted for lack of parts
JIT
A production method of inventory cost management that seeks to eliminate excess inventory to a bare minimum
visibility
A second area of collaboration is demand chain _____, knowing where excess capacity or supplies exist in the supply and distribution chains; reduces costs
Lean
A set of production methods and tools that focuses on the elimination of waste throughout customer value chain; an extension of JIT inventorying management to the full range of activities that create customer value
Multi-tier
A supply chain of primary, secondary and tertiary suppliers that constitutes a critical aspect of the industrial infrastructure of the economy
coordination
A third area of collaboration is marketing _____ and product design, where private industrial networks coordinate both internal design and marketing activities, related activities of their supply and distribution chain partners.
Eprocurment
A type of net marketplace that is an independently owned intermediary that connects hundreds of online suppliers offering millions of maintenance and repair parts to business firms who pay fees to join the market; typically used for long term contractual purchasing of indirect goods (MRO) from multiple catalogs; creates horizontal markets; provides member spot sourcing; make money by charging a percentage of each transaction, licensing consulting services and software, and assessing network use fees
Industry consortia
A vertical long term sourcing, direct input net marketplace.
Independent exchange
A vertical spot purchasing, direct input net marketplace.
B2B Digital commerce
AKA: B2B E-commerce The specific portion of B2B commerce that is enabled by the Internet
Net marketplaces
AKA: exchanges Brings together potentially thousands of sellers and buyers into a single, transaction based, digital marketplace operated over the Internet supporting many-to-many as well as one-to-many relationships.
contract spot
According to Chapter 11 of our textbook, firms use two methods to purchase: _____ purchasing and _____ purchasing.
Indirect
All other goods not directly involved in the production process; office supplies
B2B commerce
All types of interfirm trade; includes customer relationship management, demand management, order fulfilment, manufacturing management, procurement, product development, returns, logistics/transportation, and inventorying management.
Extended enterprise
Allows firms to extend their boundaries and their business process to include supply chain and logistics partners
advantage
An _____ of B2B e-commerce is reduced inventory costs by increasing competition among suppliers (increasing price transparency) and reducing inventory to the bare minimum.
Inventory locator service
An exchange that has its roots in an off-line intermediary since 1979, serving as a listing service for aftermarket parts in the aerospace industry.
Exostar
An industry consortium (founding partners include BEA Systems, Boeing, Lockheed Martin, Raytheon,and RollsRoyce); it has taken a slow steady approach to building its technology platform, focuses on the direct procurement and supply chain needs of its largest members, and taking its time developing a portfolio of technology solutions that meet its needs; current products include Supply Pass and Procure Pass;
Thomas Schmid
As the purchasing director for the Mini brand of the BMW Group, _____ is searching the world for companies to supply the 2,500 parts that finally come together to produce a car at the company's Oxford, England, assembly plant.
changing
At the basic level digital B2B e-commerce is about _____ the procurement process of thousands of firms across the US and the world.
Seller
Automated order-entry systems are a _____-side solution.
transparency sharing
B2B e-commerce can create greater price _____ and also increase the visibility and real-time information _____ among all participants in the supply chain network
cycle time
B2B e-commerce can decrease product ____ by sharing design and production schedules with suppliers.
quality
B2B e-commerce can improve _____ of products by increasing cooperation among the buyers & sellers and reducing quality issues
collaborating
B2B e-commerce can increase opportunities for _____ with suppliers and distributors.
flexibility
B2B has the potential to increase production _____ by ensuring just-in-time parts delivery.
twice
B2B revenue is _____ B2C revenue.
procurement
Before the Internet, B2B transactions were referred to simply as "trade" or the "_____ process".
Social
Beginning in 2010, _____ networks can provide the Internet connection is among customers, suppliers, and logistics partners that are needed to keep the supply chain functioning, and to make decisions based on current conditions.
Exchanges
Benefits of _____ to customers include reduced search costs, lower prices and spare capacity. Benefits to suppliers include access to global purchasing environment and production overrun sales
Net marketplace
Brings hundreds to thousands of suppliers and buyers into a single Internet-based environment to conduct trade
value
By 2012 the consensus among the major firms in Europe, Asia, and the US has become that in long-term and through careful planning sustainable business is just good business because it means using the most efficient environment-regarding means of production, distribution, and logistics. These efficient methods create _____ for consumers, investors, and communities.
regional product
By 2012, the risks and costs of extended and concentrated supply chains had begun to change corporate strategies to cope with unpredictable world events by taking steps to break up single global supply chain systems into _____ or _____-based supply chains, with some level of centralization but substantial autonomy for the smaller systems.
flexibility
B2B E commerce can increase production _____ by insuring delivery of parts "just in time".
recorded
Each activity in the procurement process must be _____ in the information systems of the seller, buyers, and shipper; involves a great deal of manual labour, telephone calls, faxes, and emails.
Buyer
Electronic data interchange (EDI) have Hub-and-spoke system, Serve vertical markets, and are a _____-side solution.
Net marketplaces
Emerged in the late 1990s as a natural extension and scaling up of the electronic store fronts.
Private industrial networks
Emerged in the late 1990s as a natural extension of EDI systems and the existing close relationships and that developed between large industrial firms in their trusted suppliers
ProcurePass
Enables firms to handle supplier transactions online, product of Exostar
long-term
Firms purchase direct goods using _____ contracts.
purchasers
For _____, Eprocurement companies automate purchase orders, requisitions, sourcing, business rules enforcement, invoicing, and payment.
suppliers
For _____, Eprocurement companies provide catalogue creation and content management, order management, fulfillment, invoicing, shipment, and settlement.
strategic
For the most part today's procurement managers still work with telephones, email, fax machines, face to face conversations, and instinct, relying on trusted long-term suppliers for their _____ purchases of goods directly involved in the production process.
Private industrial networks
Forms the largest part of B2B Ecommerce today; a web enabled network for coordinating trans-organizational business processes; considered the foundation of the extended enterprise; direct descendants of existing EDI networks and closely tied to existing ERP systems used by large firms AKA: private trading exchange (PTX)
spot
Generally Firms use _____ purchasing for indirect goods, although firms also use it for direct goods.
Direct
Goods that are integrally involved in the production process
accountability
In 2012-13, the most important themes in B2B e-commerce involves growing industry concern with supply chain risk and volatility, along with a growing problem concerned with the _____ of supply chains.
privately members
In many cases, supply chain social networks are _____ owned by the largest firm in the supply chain network; in other cases firms develop Facebook pages to organize conversations among supply chain network _____.
Search
In the procurement process catalogues, Internet, salesperson, brochures, telephone, and fax are all part of the _____ step.
Shipping
In the procurement process step of _____ involves entering into shipper tracking system, ship goods, deliver goods, and enter into tracking system.
Purchase order
In the procurement process step of _____ involves order product, initiate PO, enter into system, and mail PO.
Negotiate
In the procurement process step of _____ involves price, credit terms, escrow, quality, and timing.
Invoicing
In the procurement process step of _____ involves receiving PO, enter into financial system, enter into product system, send invoice, match with PO, internal review, and enter into warehouse system
Remittance payment
In the procurement process step of _____ involves receiving goods, enter shipping docs into warehouse system, verify and correct invoice, resend invoice, cut check, and add corrected invoice to back office systems.
Quality
In the procurement process step of _____ involves research, credit history, check with competitors, and telephone research.
Exchange
Independently owned online marketplace that connects hundreds to potentially thousands of suppliers and buyers in a dynamic, real time environment; usually creates vertical markets that focus on spot purchasing requirements of large firms in a single industry; charges commission on transactions; powersourceonline.com, gotopaper.com
exchanges
Industry consortia are more focused on optimising long-term supply relationships than independent _____, which tend to focus more on short-term transactions.
Industry consortia
Industry owned vertical market that enables firms to purchase direct inputs from a limited set of invited participants; emphasis on long term contractual purchasing, development of stable relationships, and creation of industry wide data standards and synchronization
Private industrial networks
Internet-based communication environment that extends far beyond procurement to encompass truly collaborative commerce by sharing product design and development, marketing, inventories, production scheduling, and unstructured communication AKA: private trading exchange (PTX)
Automated order entry systems
Involves the use of telephone modem in the 1970s to send digital orders; replaced by personal computers using private networks in 80s and by Internet work stations accessing electronic online catalogues in 90s
product quality
Many manufacturing firms have spent the past two decades reducing the size of their supply chains and working closer with small groups of strategic supplier firms to reduce both _____ costs and administrative costs, while improving _____.
commodities time
Market prices of _____ may vary according to everything from weather to global politics;, parts made from resources are apt to come from whatever country is producing them best and cheapest at the _____.
supplier
Once a _____ is identified in the B2B ecommerce procurement process, purchase orders are issued, the file is sent an invoice, the goods are shipped, and the buyer sends a payment.
frictionless
One of the most compelling visions of B2B Ecommerce is that of an electronic market place on the Internet that would bring thousands of the fragmented suppliers into contact with hundreds of major purchasers of industrial goods for the purpose of conducting _____ commerce.
costs
One of the significant _____ In any production process is the cost of in process inventory
resources cotton
One of the world is truly ancient industries, textiles support millions of workers while consuming extraordinary _____; it takes 1000 gallons of water to make 1 pound of finished _____ (your jeans for example).
Arabia
Poster child of the B2B age born beofre it's time; starting in 1996 hoping to build a Global business network linking buyers and sellers (like a business eBay); sellers and buyers did not join the network at first because they did not understand the opportunity due to traditional procurement processes and lack of trusting outsiders controlling their purchasing and vendor relationship
single
Private industrial networks can also include other activities of a _____ large manufacturing firm, such as design of products and engineering diagrams, as well as marketing plans and demand forecasting.
MRO
Products for maintenance, repair, and operations.
Value chain management (VCM)
Provided by companies and includes automation of a firms entire procurement process on the buyer side and automation of the selling business processes on the other side
SupplyPass
Provides a dynamic building environment for buyers and sellers, product of Exostar
Safe harbors
Rather than all production or suppliers be in a single country, firms can decide to locate some production of parts elsewhere. These backups for temporary circumstances, known as _____, May result in higher short-term costs that provides substantial longer term risk protection in the event any single region is disrupted.
Procurement process
Refers to How firms purchase goods they need to produce goods for consumers.
Supply chain management (SCM)
Refers to a wide variety of activities that firms and industry use to coordinate the key players in their procurement process
B2B Electronic storefronts
Simplest ecommerce form, Online catalogues of products made available to the public market place by a single supplier
lower
Some advantages of B2B E-Commerce are _____ administrative, transaction, and search costs for buyers.
automate
Stage 1 of the evolution of EDI attempted to _____ the flow of documents.
access
Stage three of the evolution of the EDI involved supplier firms given _____ to online production schedules and it was up to them to make sure the goods arrived in time to support the production schedule
automate
Stage two of the evolution of the EDI attempted to _____ documents like purchase orders by sharing production schedules with their suppliers that describes exactly where and when supplies would be needed.
development computer
Strategic partnership programs are essential for JIT production models, and often involve joint product _____ and design, integration of _____ systems, and tight coupling of the production processes of two or more companies
supply chain management (SCM)
Supply chain simplification, lean production, strategic partners in the production process, enterprise systems, and continuous inventorying replenishment, are the foundation for contemporary _____ systems.
designing implementing
The challenge of B2B e-commerce is changing existing patterns and systems of procurement, and _____ and _____ new Internet based B2B solutions.
Supply chain
The complex system of links (organizations, people, business processes, technology, and information) that work together and connect business firms with one another to efficiently coordinate production
searching qualifying negotiating
The first three steps of The procurement process involve the decision of who to buy from and what to pay: _____ for suppliers of a specific products; _____ both the seller and the products they sell; and _____ prices, credit terms, escrow requirements, quality, and scheduling of delivery
optimal distributed
The focus in 2012 shifted to _____ cost (not low-cost) supply chains and more _____ manufacturing along with more flexible supply chains second shift reliability from high risk to low risk areas.
Covisint
The giant automotive industry consortium backed by major car manufacturers such as ford, General Motors, and daimlerChrysler, which provided procurement and other supply chain services for these companies.
apps
The growing use of smart phones has led software firms (like SAP and Oracle) to develop mobile _____ for personal computers, smart phones, and other consumer devices to connect firms with their supply chain partners.
Edistributor
The most common and most easily understood type of net marketplace; independently owned intermediaries that provide a single source electronic catalog that represents the indirect (MRO) products of thousands of direct manufacturers; make money off markups: Amazon, Grainger, McMaster-Carr.com
Collaborative resource planning forecasting replenishment
The most profound area of collaboration; involves working with network members to forecast demand, develop production plans, and coordinate shipping, warehousing, and stocking activities to ensure that retail and wholesale shelf space is replenished with just the right amount of goods; wringing out millions of dollars of excess inventory and capacity
complex
The process of conducting trade among business firms is _____ and requires significant human intervention and re-sources.
community relations environmental sustainability
many firms have learned that supply chains can strengthen or weaken a company depending on a number of factors related to supply chain efficiency such as ___ engagement, labour _____, _____ purposes, and _____.
Contract
Type of purchasing that Involves long-term written agreements to purchase specific products, under agreed upon terms and quality, for and extended period of time
Spot
Type of purchasing that Involves the purchase of goods bassed on immediate needs in larger market places that involve many surprises
suppliers
VWGroupSupply.com's system has the ability for _____ to track VW's production plans and materials requirements in real time.
EDI
Virtually all large firms have _____ systems and most industry groups have industry standards for defining documents in that industry.
E-procurement
Which type of Net marketplace is described by the following phrases: independently owned intermediary; connect hundreds of suppliers of indirect goods; firms pay fees to join?
Exchanges
Which type of Net marketplace is described by the following phrases: independently owned; connect hundreds to thousands of suppliers and buyers in a dynamic, real-time environment; vertical markets, spot purchasing in a single industry; many have failed due to low liquidity?
centralize
While firms have greatly simplified their supply chains in the last decade, they have also sought to _____ them by adopting a single, global supply chain system that integrates all the firms vendor and logistics information into a single enterprisewide system; "one world, one firm, one database"- Oracle, IBM, SAP
Private
_____ Industrial networks bring together a small number of strategic business partner firms that collaborate to develop highly efficient supply chains and satisfy customer demand for products.
Supply chain management (SCM)
_____ System is continuously link the activities of buying, making, and moving products from suppliers to purchasing firms, as well as integrating The demand side of the business equation by including the order entry system in the process._____
EDI
_____ Was developed to reduce the cost, delays, and errors inherent in the manual exchanges of documents such as purchase orders, shipping documents, price list, payments, and consumer data; Messages are organized with distinct fields for each of the important pieces of information in a commercial transaction such as transaction date, product purchased, amount, senders name, address, and recipients name
Net market places
_____ are differentiated by either providing either indirect or direct goods (what they buy), and markets providing contractual or spot purchasing (how they buy); the intersection of these four dimensions produces 4 "pure" main types - Edistributors, Eprocurment networks, exchanges, industry consortia
B2B
_____ has the potential to lower administrative, search, and inventory costs.
Private
_____ industrial networks can be viewed as "extended enterprises" in the sense they often begin as ERP systems in a single firm and then expanded to include the firms major suppliers: Procter & Gamble
Industry consortiums
_____ make money by members paying for creation of capabilities, contribute initial operating capital, and charging buyer/seller firms transaction and subscription fees.
Regional
_____ manufacturing means shorter supply chains that can respond rapidly to changing customer taste and demand levels.
Administrative
_____ overhead includes processing paper, approving purchase decisions, spending time using the telephone and fax machines to search for products and arrange for purchases, arranging for shipping, and receiving the goods.
Accountable
_____ supply chains are those where labour conditions in low wage, underdeveloped producer countries are visible and morally acceptable to ultimate consumers in more developed industrial societies.
Software AG
for an example of one software vendor's solutions to management of multi-tier supply chains is _____ which offers Multi-tier supplier control: Minimize supply disruptions with data stream integration.
complex
The subject of B2B e-commerce can be _____ because there are so many ways the Internet can be used to support the exchange of goods and payments among organizations, efficient supply chains, and collaboration.
5.6
The total amount of B2B e-commerce trade in the US is about $4.1 trillion in 2012, and grow to $___ trillion by 2016.
Total Inter-firm trade
The total flow of value among firms
NetMarketplace privateIndustrial
The two generic types of internet based B2B commerce systems: _____ and _____ networks.
unification
The ultimate objective of industry consortia is the _____ of supply chains within entire industries, across many tiers, common data definitions, network standards, and computering platforms.
Collaborative commerce
The use of digital technologies to permit organizations to collaborate with design, develop, build, and manage products through their life cycles; A direct extension of supply chain management systems and supply chain simplification
available
Thousands of small firms are now able to participate in B2B systems as low cost cloud-based computing and software as a service (SaaS) become widely _____.
day
To reduce its costs, Mini insists that suppliers deliver only enough parts to its Oxford manufacturing plant to build the cars moving through the assembly line in a(an) _____.
global
Today's supply chains are often _____, but can also be local and national in scope.
compete
Today, the Volkswagen Group did NOT want a public independent exchange and an industry consortium in its procurement process, because it hoped to _____ more effectively by building its own B2B network.
Internet
Today, the Volkswagen Group manages almost all of its procurement needs via the _____.