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Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Chapter 5 =
Business-to-Business
Strategies: From Electronic Data Interchange to Electronic Commerce
Electronic Commerce, Seventh Annual Edition
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Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
2
Objectives
• In this chapter, you will learn
about:
•Strategies
that businesses use to improve purchasing, logistics, and
other support activities
<=
span
class=3DBB style=3D'position:absolute;left:-4.03%'>• Electroni=
c data
interchange and how it works
•How
businesses have moved some of their electronic data interchange
operations to the Internet
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Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
Objectives (continued)
• Supply c=
hain
management and how businesses are using Internet
technologies to improve it
• Electron=
ic
marketplaces and portals that make purchase-sale
negotiations easier and more efficient
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Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
Purchasing, Logistics, and Support
Activities
• Purchasi=
ng
activities
– Include
identifying vendors, evaluating vendors, selecting specific produc=
ts,
and placing orders
• Supply
chain
– Part of =
an
industry value chain that precedes a particular strategic busi=
ness
unit
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Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
Purchasing, Logistics, and=
Support
Activities (continued)
• Procurem=
ent
– Includes=
all
purchasing activities, plus the monitoring of all element=
s of
purchase transactions
• Supply
management
– Term use=
d to
describe procurement activities
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Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
Purchasing, Logistics, and Support
Activities (continued)
• Sourcing=
– Procurem=
ent
activity devoted to identifying suppliers and determining
their qualifications
• E-procur=
ement
or e-sourcing
– Use of
Internet technologies in procurement and sourcing activities
Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
Direct vs. Indirect Materials Purchasing
&#=
8226; Direct
materials
– Materials that become part of the finished prod=
uct in a
manufacturing process
&#=
8226; Replenishment
purchasing
– The
company negotiates long-term contracts for most of the materials th=
at
it will need
&#=
8226; Indirect
materials
&#=
8211; Other
materials that the company purchases, including factory
supplies
Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
Logistics Activities
• Logistics
activities include managing:
– Inbound
movements of materials and supplies
– Outbound
movements of finished goods and services
• Objectiv=
e of
logistics
– To provi=
de
the right goods in the right quantities in the right place at the ri=
ght
time
• Logistics
management
– Important
support activity for both sales and purchasing activities
Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
10 <=
span
style=3D'font-size:111%;mso-special-format:lastCR;display:none'>
Support Activities
• Support
activities
– Include
categories of finance and administration, human resources, and
technology development
• Knowledge
management
– Intentio=
nal
collection, classification, and dissemination of informat=
ion
about a company, its products, and its processes <=
/div>
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Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
11 <=
span
style=3D'font-size:111%;mso-special-format:lastCR;display:none'>
E-Government
• Use of
electronic commerce by governments and government agencies
to:
– Perform
functions for their stakeholders
– Employ
people, buy supplies from vendors, and distribute benefit
payments
– Collect
taxes and fees from constituents
Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
12 <=
span
style=3D'font-size:111%;mso-special-format:lastCR;display:none'>
Electronic Data Interchange
R=
26; EDI
is the computer-to-computer transfer of business information between
two businesses
=
;
̶=
6; EDI-compatible
firms are firms that exchange data in specific standard
formats
&#=
8211; Business
information exchanged is often transaction data
R=
26; Most
B2B electronic commerce is an adaptation of EDI or based=
on
EDI principles
Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
13 <=
span
style=3D'font-size:111%;mso-special-format:lastCR;display:none'>
Early Business Information Interchange
Efforts
&#=
8226; 1950s
– Companies
began to use computers to store and process internal transact=
ion
records
&#=
8226; 1968
&#=
8211; A
number of freight and shipping companies formed the Transportation
Data Coordinating Committee (TDCC)
&#=
8226; TDCC
created a standardized information set
Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
14 <=
span
style=3D'font-size:111%;mso-special-format:lastCR;display:none'>
Emergence of Broader EDI <=
/span>Standards
• American
National Standards Institute (ANSI)
– Has been =
the
coordinating body for standards in the United States since
1918
– Does not=
set
standards itself
– Has crea=
ted
a set of procedures for the development of national standards&#=
13;
– Accredits
committees that follow set procedures
Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
15 <=
span
style=3D'font-size:111%;mso-special-format:lastCR;display:none'>
Emergence of Broader EDI <=
/span>Standards
(continued)
• Accredit=
ed
Standards Committee X12 (ASC X12)
– Chartered=
by
ANSI to develop uniform EDI standards
– Includes
information systems professionals from over 800 businesses and o=
ther
organizations
• Transact=
ion
sets
– Names of
formats for specific business data interchanges
<=
/div>
•
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Chapter 5 Business-to-Business Strategies: From Electronic Data
Interchange to Electronic Commerce
Electronic
Commerce, Seventh Annual Edition
16 <=
span
style=3D'font-size:111%;mso-special-format:lastCR;display:none'>
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