Online business example

Electronic marketplace/E-commerce In addition to the many databases available and person-to-person contacts, E-commerce in plastics has been conducted through suppliers web sites or the dot-commerce independent web sites that link material buyers with sellers in transactions or auction formats. During the year 2000 five plastic producers/suppliers and various elastomer producers/suppliers created a new and important business model of a joint-venture web site. It provides multiple companies to join forces to do business. This is a strategy some observers call competition and others regard as just another form of selling in. an electronic format. Regardless of how it is perceived, the model will help propel e-commerce into the mainstream of processor procurement due to the size and wealth of the companies involved. The plastic model example is the largest online business-to-business site todate. 

Online sales can lower a firm s inventories if it can postpone the introduction of variety until after the customer order is received. The time lag between when a customer places the order and when he or she expects delivery offers a company selling online a window of opportunity to implement postponement. For example, for its online business, Dell keeps its inventory as components and assembles its servers after receiving the customer order. The amount of component inventory required is much lower than it would be if Dell kept its inventories in the form of assembled servers. Similarly, Amazon prints some low-volume books to order, allowing it to reduce inventories. 

Dell, for example (Fig. 22.1), became one of the biggest and the most valuable PC producers during the 90s while there are obvious differences between the PC and chemical businesses, approaches like product-customer segmentation or online inventory management can definitely be successfully borrowed. 

Pollution Prevention News (P2 News2 , US EPA) Toxic Materials News (Business Publishers) Electronic access to newsletters is provided via a number of services. These services vary in scope and how often they are updated. Examples include the PTS Promt Newsletter database (lAC) with a focus on business and industry and the Newsletters in Print database (Gale Research) available in print and online via several vendor systems. The McGraw-Hill Publications Online database carries approximately 60 leading publications on-line in full-text form, many of them newsletters and bulletins. 

As an example, Fluor s Global Automation Team develops or customizes high-value, business-driven project automation solutions and, in doing so, creates value for clients. At Fluor, knowledge flows freely between employees located in more than 50 offices worldwide. The company s proprietary program, called Knowledge Online, is an Internet collaboration that allows members continuous access to Fluor experts located around the world and also to more than 22,000 knowledge objects. 

Sharing information within business and between businesses is nothing new. Electronic data interchange (EDI) has allowed firms to send and receive purchase orders, invoices, and order confirmations through private value-added networks. Today s EDI now allows distributors to respond to orders on the same day they are received. Still, only large retailers and manufacturers are equipped to heradle EDI-enabled processes. It is also common for consumers to wait four to six weeks before a mail order item arrives at their door. Special order items—items not in stock—at Barnes Noble bookstores, for example, require three to four weeks of delay. In contrast, an order placed on a website at Land s End (a clothing retailer) or an online computer store arrives within a day or two. 

The business use of the Internet and electronic commerce enables online firms to reap the benefits of EDI at lower cost. The ultimate fast-response distribution system is instantaneous online delivery, a goal that a few e-businesses in select industries have already achieved. By their very nature, on-demand Internet audio and video services have no delay in reaching customers. In these examples, the efficiency stems from highly automated and integrated distribution mechanisms rather than from the elimination of distribution channels as in more traditional industries. 

More recent publications include Membrane Separations Technology Principles and Applications, published in 1995 and edited by Richard D. Noble and J. Douglas Way, who had coedited an earlier volume. Liquid Membranes Theory and Applications. The state of the technology is kept track of by the Business Communications Company, for example, in Membrane and Separation Technology Industry Review, " published in 1998. For continuing developments, consult Books in Print and WorldCat, a service in conjunction with OCLC (Online Computer Library Center). Additionally, there is, of course, the Internet. 

Cloud Computing means that information is permanently stored in servers on the Internet and cached temporarily on clients that include desktops, notebooks, entertainment centers, tablet computers, wall computers, handhelds, sensors, monitors etc (Wikipedia, 2009). For example, Google Apps provides common business applications online that are accessed from a web browser while the software and data are stored on the servers. This is a rather controversial and disturbing concept for privacy and surveillance concerns. 

One of the advantages of having direct contact with the customer through online ordering is the dramatic improvement in visibility of real demand that it provides. For example, Tesco, one of the world s biggest online retailers (as well as one of the world s biggest bricks and mortar retailers), can see what its real product availability is because it is able to capture actual demand as it happens and is therefore able to measure on-the-shelf availability accurately. In the bricks and mortar business, even with sophisticated electronic point of sale (EPOS) data, the company cannot get the same level of accurate information. 

E-business is a term used to cover trading with a firm s suppliers and business customers - that is, business-to-business - by electronic means. A feature of B2B is the formation of online trading communities (see for example Ariba, www.ariba.net) and electronic marketplaces. Such structures have been enabled by the explosion of Internet technology and seek to offer cost reductions in procurement of both direct and indirect goods and also in the processing of such transactions. The relationship of these terms in the context of the e-supply chain is shown in Figure 8.2. 

The value of setting up online sales is not the same in every industry. Whereas Amazon and Blue Nile have shown increased profits after going online, Webvan and many other online grocers have gone out of business. The scorecard in Table 4-9 can be used to understand how online sales affect the performance of different supply chain networks. In the next section, we apply the online sales scorecard to several examples. 

Information Costs. Again, the IT infrastructure required for online sales increases costs. In the case of an online grocer, this is somewhat more significant than with the other online channels, because an online grocer takes on a wider range of functions that shoppers do themselves. Therefore, IT costs are higher for an online grocer. As in the other examples, however, IT costs are not a deal breaker for this business model. 

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