electronic commerce strategy technologies and applications
e c o m m e r c e
The value chain
The production of goods and services is the result of the efforts of many organisations a complex web of contracts and co-operation known as the supply chain or the value system.
electronic commerce strategy technologies and applications
e c o m m e r c e
Manufacturing Inputs:
The supply chain
Components (e.g. wheels, seats, etc.) Sub-assemblies (e.g. engine, gearbox, etc.)
Sales and Distribution:
Wholesale (e.g. import agent) Retail (e.g. local main dealer)
electronic commerce strategy technologies and applications
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Transport Storage Paperwork (Orders, Invoices, etc)
Logistics chains
Each supply chain transaction adds cost without adding intrinsic value. e-Commerce can be applied to the supply chain to reduce costs or improve service.
electronic commerce strategy technologies and applications
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Porters value chain model
support activities
Firm Infrastructure
Human Resource Management Technology Development Procurement Inbound Operations Outbound Marketing Logistics Logistics & Sales
primary activities Margin
Service
Primary Activities:
Inbound Logistics Operations (Production) Outbound Logistics Marketing and Sales Service
electronic commerce strategy technologies and applications
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Porters value chain model
support activities
Firm Infrastructure
Human Resource Management Technology Development Procurement Inbound Operations Outbound Marketing Logistics Logistics & Sales
primary activities Margin
Service
Support Activities:
Procurement Technology Development Human Resources Management Firm Infrastructure
electronic commerce strategy technologies and applications
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Generic value chain
Starting point to improve the efficiency and productivity of a company Help indentifying the component activities Help identifying the various linkages Performance deficits can be addressed
electronic commerce strategy technologies and applications
e Use of value chain model c Analysis tool for defining a companys core o competencies and the activities in which it can pursue a competitive advantage m Cost advantage Differentiation m Steps in value chain analysis e Break down activities Assess the potential for adding value via cost r advantage or differentiation Determine strategies where competitive advantage c can be sustained e
electronic commerce strategy technologies and applications
e c o m m e r c e
Key weaknesses of traditional value chain
Most applicable to manufacturing of physical products as compared to services One way chain involved with pushing products Does not emphasis on customer needs E-commerce has implication for whether activities are achieved internally or externally which is not covered in value chain
electronic commerce strategy technologies and applications
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Revised value chain
M R N P D M P P M P P M S F
MR: Market Research NPD: New product development MP: Market product PM: Procure material PP: Procure products MSF: Manage selling and fulfillment
electronic commerce strategy technologies and applications
e e-Commerce in the value chain c Electronic Value Chain: o Reduced time frame Changed cost structures m Re-engineered Value Chain: m Just-in-time manufacture e Quick response supply Efficient document processing r Competitive advantage c e
electronic commerce strategy technologies and applications
e c o m m e r c e
Linked value chains
Outbound Logistics Inbound Operations Outbound Logistics Logistics Inbound Logistics
Inbound Logistics
from Suppliers
Outbound Logistics from Customers
electronic commerce strategy technologies and applications
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(Inter-organisational value chain)
Porters value system
Firm Value Chains Channel Value Chains Buyers Value Chains
Supplier Value Chains
Overall organisational competitive advantage:
efficiency of the company quality of its products
plus
efficiency and quality of suppliers efficiency of wholesalers (Channel) efficiency of retailers
Inbound Logistics: Large number of suppliers electronic Vast number of components commerce Process: strategy Just-in-time (JIT) manufacture technologies Outbound Logistics: and Limited number of Main Dealers applications
e c o m m e r c e
Automotive assembly value system
Internal Supplies
Component
Suppliers
Vehicle Assembler
Dealer Network
Consumer
Inbound Logistics: Large number of suppliers electronic Vast number of products commerce Process: strategy Retail technologies Outbound Logistics: and Vast number of Consumers applications
e c o m m e r c e
Food supermarkets value system
Regional Whse
Food Processors
Supermarket
Consumer
electronic commerce strategy technologies and applications
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Insurance value system
Agents
Insurance Company
Consumer
Insurance Broker
electronic commerce strategy technologies and applications
e Insurance value system c Inbound Logistics: o No significant suppliers (financial / re-insurance partners) m Process: m Administrative e Outbound Logistics: r Sales through agents Sales through brokers c Direct sales e
