electronic commerce strategy technologies and applications

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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.
E-Commerce David Whiteley/McGraw-Hill, 2000

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The supply chain

Manufacturing Inputs: 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)
E-Commerce David Whiteley/McGraw-Hill, 2000

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Logistics chains
Transport Storage Paperwork (Orders, Invoices, etc)

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.
E-Commerce David Whiteley/McGraw-Hill, 2000

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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
E-Commerce David Whiteley/McGraw-Hill, 2000

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
E-Commerce David Whiteley/McGraw-Hill, 2000

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Linked value chains

Outbound Logistics Inbound Operations Outbound Logistics Logistics Inbound Logistics

Inbound Logistics
Outbound Logistics

from Suppliers
from Customers

E-Commerce David Whiteley/McGraw-Hill, 2000

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Porters value system

(Inter-organisational value chain)
Supplier Value Chains Firm Value Chains Channel Value Chains Buyers 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
E-Commerce David Whiteley/McGraw-Hill, 2000

 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-Commerce David Whiteley/McGraw-Hill, 2000

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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-Commerce David Whiteley/McGraw-Hill, 2000

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Food supermarkets value system

Regional Whse

Food Processors

Supermarket

Consumer

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Insurance value system

Agents

Insurance Company

Consumer

Insurance Broker

E-Commerce David Whiteley/McGraw-Hill, 2000

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Insurance value system

Inbound Logistics: No significant suppliers (financial / re-insurance partners) Process: Administrative Outbound Logistics: Sales through agents Sales through brokers Direct sales

E-Commerce David Whiteley/McGraw-Hill, 2000

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e-Commerce in the value chain

Electronic Value Chain: Reduced time frame Changed cost structures Re-engineered Value Chain: Just-in-time manufacture Quick response supply Efficient document processing

Competitive advantage

E-Commerce David Whiteley/McGraw-Hill, 2000

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electronic commerce strategy technologies and applications

E-Commerce David Whiteley/McGraw-Hill, 2000

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Exercise 2

Outline the value system of an organisation you know. Identify linkages where e-Commerce might be usefully applied.

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