[8] 2002 e-business-strategies-for-virtual-organizations

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e-business strategies in the virtual organization This chapter focuses on the problems involved first in the B2B environment through supply chain management, then in the B2C environment with the use of effective customer relationship management (CRM) systems, and finally in the B2E environment through effective ERP integration with e-business. 10.3 B2B fulfilment and operations 10.3.1 Order fulfilment – what’s virtual about trucking baked beans? Fulfilment is the process of accepting an order, assembling the component in production or in transit, and then packaging, shipping, and delivering the order. The area we call e-business will look a lot more important a year or two from now. Somebody has to pick, pack, and ship until they figure out a way to squeeze baked beans down the phone line (which we aren’t ruling out just yet). It’s one thing to take an order, but the resources of the Vocan offer unprecedented levels of service in fulfilment areas such as: � Accurate due delivery dates. � Real-time product availability as opposed to what can be ordered. � Coordination of multiple line items, maybe from different suppliers, to reduce shipping costs. � Real-time shipping status – as popularized by Fedex. � Pricing options for preferred production/delivery options. � Available to promise – item made and delivery to order. � Capability – product hasn’t been made but production capacity can be reserved. � Intelligent, automated, alternatives to fill demand and optimize for market share, fill rates, profitability, or customer satisfaction. � Integrated orders that span multiple manufacturers but give one order status and price for the final component. 10.3.2 Curing the blind spots Because the chain of commerce is fragmented, we are accustomed to many blind spots in the traditional fulfilment process. These cost money. All companies are are at the mercy of the varying efficiency of trading partners, but coordinating fulfilment across multiple supply chains is difficult to do manually. 207
e-Business Strategies for Virtual Organizations 208 And the problem is growing more acute. Raw competition is spawning more configurations and flavours of products with shorter life cycles. In 1981, 2700 new products hit grocery shelves in the US; that figure had ballooned to 20,000 by 1996. That variation poses big problems for supply chain management. The first blind spot is end-market demand Real-time demand is invisible to most companies because most sell through intermediaries or don’t have any lead-time from their customers on demand shifts. Manufacturers may forecast with historical data but often don’t have current information on shifts in demand. To avoid running out of stock and losing sales when demand escalates, companies build for all scenarios. Some makers require their suppliers to keep 90–150 days of inventory on hand and have resigned themselves to the cost of carrying this excess inventory in the supply chain. The US had a $1.37 trillion investment in inventory in 1998, and 40% of carry costs on this inventory was obsolescence! The better solution is to accept orders for things that haven’t yet been built and deliver them quickly. The second blind spot is through the supply chain No company can tell what inventory and manufacturing capacity is available in their own supply chains: they’re too complex, and anyway, until now the time taken to find out meant that the information was necessarily out of date and inaccurate. Their suppliers in turn can’t see demand two or three levels up the chain. So they build inventory as well. Because manufacturers can’t get real-time product availability from their suppliers, they assume fixed lead-times on all products, but life is variable. They can work to fixed lead-times if they require suppliers to carry excess inventory, but then the supplier has higher carrying costs and spoilage that show up in the final price. Building to inventory yields higher defect rates You can’t see what’s wrong with products sitting in a warehouse – they have to be used first. Tightening the link between production and consumption provides more frequent product
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e-Business Strategies for Virtual O
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e-Business Strategies for Virtual O
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Contents Computer Weekly Profession
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Contents 6 Globalization and e-busi
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Contents 11.6 The increasing power
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Computer Weekly Professional Series
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Authors’ Preface There are dozens
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Authors’ Preface model will there
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Authors’ Preface alliances, bette
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1 e-business and the virtual organi
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e-business and the virtual organiza
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Figure 1.2 e-business and the virtu
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1.5 e-business e-business and the v
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Figure 1.3 e-business and the virtu
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Figure 1.4 Virtual objects, Scholz
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Characteristics of the virtual orga
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Figure 2.1 Formation of business al
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� empowerment of staff; Character
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e-business models for virtual organ
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3.4 Models of efficient response e-
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Figure 3.4 Star alliance model e-bu
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Figure 3.6 Market alliance model Fi
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Figure 3.10 Virtual alliance framew
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Figure 3.11 Virtual organizational
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References e-business models for vi
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IS planning strategies for emerging
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Figure 4.1 The evolution of IS/IT p
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Figure 4.3 A framework for SISP (Wa
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Figure 4.4 Planning adopts a busine
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Figure 4.5 Interconnected ecologies
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Figure 4.6 The interrelationships b
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4.8 Conclusion IS planning strategi
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References IS planning strategies f
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Moving from e-business to i-busines
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Globalization and e-business strate
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Adoption and deployment of online i
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Table 6.1 Online business models On
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Figure 6.2 VIM strategy Globalizati
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7 Developing knowledge-based strate
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Developing knowledge-based strategi
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Page 176 and 177: Developing knowledge-based strategi
Page 186 and 187: 8 Evaluating strategies for e-busin
Page 188 and 189: Figure 8.2 Fitness landscapes Evalu
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Page 192 and 193: Table 8.1 Information economics - v
Page 194 and 195: Customer view Whatisour image? Eval
Page 204 and 205: Table 8.6 Matrix for preparing to m
Page 206 and 207: 9 Outsourcing, partnering and the v
Page 208 and 209: Outsourcing, partnering and the vir
Page 218 and 219: Figure 9.2 Outsourcing, partnering
Page 220 and 221: 9.9 Summary Outsourcing, partnering
Page 222 and 223: References Outsourcing, partnering
Page 224 and 225: e-business strategies in the virtua
Page 242 and 243: 10.10 Summary e-business strategies
Page 244 and 245: 11 Creating virtual cultures for gl
Page 246 and 247: Creating virtual cultures for globa
Page 262 and 263: Four stages of market evolution Mar
Page 264 and 265: Figure 11.4 The four paths of evolu
Page 266 and 267: References Creating virtual culture
Page 272 and 273: Advanced knowledge, see Knowledge A
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[8] 2002 e-business-strategies-for-virtual-organizations

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