Supply Chain Collaboration

Processing business transactions over the Internet or with the use of Internet technology offers several wide-ranging advantages.  Different advantages apply to different enterprises, depending on the type and structure of the company (Lipps, 1995).  More than anything else, the Internet offers a medium of communication and collaboration.

No enterprise can regard itself as self-sufficient in its supply of information.  In various forms, both internal and external communication will always take place.  The forms of communication provide different application area, each with specific characteristics and advantages.

Every enterprise should consider the suitability of using the Internet to process its own business transactions before it actually decides to do so.  It must do so with the context of its strategic orientation.  Regardless of the special potential offered by various application areas, some Internet-specific advantages exist for both buyers and sellers alike.

Buyers will enjoy the following advantages:

  • The Internet has no closing time.  The buyer has access to offerings at any time of the day or night.
  • The Internet turns the world into a global village.  A click of the mouse places every seller in the world at the buyers disposal.
  • Buyers have direct access to sellers systems in real time, assuming sufficient network throughput.  They can make (purchasing) decisions immediately.
  • The Internet displays current information, new offerings and additional sellers as soon as they appear.
  • Every computer and operating system platform uses the same WWW user interface, the browser, which serves as a ‘universal client.’  The browser features childishly simple ease of use and attractiveness.  It clearly presents multimedia materials, such as business graphics, 3D animation, music, speech and video.
  • The browser offers simple navigation within the information: a click of the mouse suffices.  The search engine finds every occurrence of the search argument throughout the world.
  • Internet technology offers an extremely good value.  Browsers cost little, if anything and often appear as part of the operating system.  Transfer costs on the Internet remain much lower than the costs of WANs or proprietary online systems.

The advantages listed here for individual buyers also apply to business partners that sometimes act as buyers.  In addition, enterprises have the following advantages.

  • The design and preparation of an Internet presence, a Web page, costs relatively little.
  • Business processes extend beyond the limits of the enterprise.  buyers can request warehouse stocks directly and place their own orders.
  • Buyers enter data without having to occupy an employee’s time.  Business processes take less time and therefore cost less.
  • Use of these business processes does not require special client software or special training for users.  Business partners simply use a browser, the same one they use to access every other Internet offering.
  • Sellers who appear on the Internet immediately gain a worldwide market of potential buyers.
  • The use of an Intranet, a Internet technology applied within and throughout and enterprise, offers employees the same advantages for internal information that buyers have for external information:

–       Ease of use, even for occasional users;

–       Worldwide, immediate access at any time;

–       Multimedia contents.

From an economic viewpoint, these advantages must convert into financial advantages.  Although many first think of increased profits for the enterprise because of increased revenue (‘over 40 million Web users’ as potential customers), reduced costs appear as the first effect.  Cost reductions become most apparent in the human resources area, since the Internet automates many services and does not require a real person at the other end of the telephone.  Consider the savings inherent in support services for software systems when new versions or corrections become available over the Internet.

Increased efficiency in communications within an enterprise leads to a smoother flow of business processes, the ability to make decisions more quickly and a rapid supply of important information, made these benefits particularly clear for internal and external e-mail.

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