Choose a different title name

[ThatHawaiiGuy]

PNLK and VDOT

http://www.ragingbull.altavista.com/mboard/boards.cgi?board=VDOT&read=120345

Solving the Supply Chain Maze
Back in the days when IBM, Intel and Microsoft shifted from integral product design, to modular product design, causing the computer industry to morph from a vertical to a horizontal structure, little did they know that they were paving the way for revolver distribution centres that could support just-in-time production, such as that of the Dell Direct Model. Rapid response and lean asset bases combined with the timesaving nature of the Internet upon which the majority of sales are now made, have led to substantially higher margins. (10/3/00)

But while the leaders have got it right, what is the lesson for newcomers, who do not (yet) enjoy competitive advantage and do not have the expertise and depth of background that comes with ‘growing up’ with the industry? What is the general consensus on e-business methodology, if in fact there is any at all?

Traditional development of the business entity usually includes a reasonably well-defined business or technical objective and a user community from which to cultivate specific requirements, including functionality, data inputs and data outputs. Existing software, ranging from libraries (component or otherwise) to systems (legacy applications, data feeds, databases) tend to be identified in advance. It is by and large, a foregone conclusion that options for combining existing systems with new software to provide a complete solution are often limited.

By contrast, e-business methodology is generally a contradiction in terms, with business strategies poorly thought out. Exchanges have spent the past two years integrating various components of infrastructure and packaged applications, "adding to stratum upon stratum of vertically focused adjustments and enhancements". At this present juncture, it appears that the business entities reaping most of the benefits currently, are those servicing the platforms and providing the software applications to enable the increasing degrees of transparency we so often hear about.

Furthermore, while the stage exists upon which the benefits of enhanced efficiency may be played out, individual businesses are simply not addressing, or leveraging the opportunities being made available, due to the perceived enormous complexities associated with going on line.

"The Web provides a powerful platform for companies who want to market their products and services globally without having to absorb the risk and expense of building a local brick-and-mortar presence, " said Mads Toubro, principal consultant for IBM's Globalisation Practice. "The issues associated with global e-commerce are complex, but for companies willing to address them, the upside can be enormous."

"The issues associated with global e-commerce are complex, but for companies willing to address them, the upside can be enormous."

"The issues associated with global e-commerce are complex, but for companies willing to address them, the upside can be enormous."


With B2B exchanges providing end-to-end solutions for businesses, leading to the inevitable erosion of transaction fees, it would appear that the lot of the exchanges is simply to sweat out the waiting game (liquidity on the exchange vs. dwindling cash reserves) before any semblance of a revenue model can be devised and rolled out, prolonging their lifespan for the sole purpose of individual businesses to ‘catch on’ and bolt on to the exchange platform. Given that the Exchange cannot survive without the individual business, and in the not too distant future, the business not only will be unable to survive without the Internet but also will positively thrive via online marketplaces, such a waiting game tends to be frustrating when the outcome is a foregone conclusion.

According to the U.S. Business-to-Business Trade Projections study, the problem rests with the simple notion that the next generation of E-commerce is different in that entire supply chains are connected to the same network. "If you thought you had big integration problems before, now you've got to integrate companies within your firewall," says Jupiter Research VP John Katsaros.

Katsaros continued to expound upon the degree to which the business-to-consumer transactions that have moved online, will pale in comparison to the number of transactions that include companies and their partners, suppliers, and customers. While 15% to 20% of business-to-consumer transactions have gone online, 80% of business-to-business transactions will be conducted online in six to-eight years, he says.

As analyst predictions continue to pour oil on the hype, misgivings are beginning to abound; for the simple reason that a lot of people would like to see the forecasts toned down a little. Not surprising, really, in the wake of such predications having been undermined by actual performance and market capital, which tend to result in huge swings in market sentiment. The following releases are testament to such mongering. According to forecasts from International Data Corp., the consumer Internet market outside the US. will to grow by as much as 46 percent by 2003. Jupiter Research has released a study with ‘pulse-quickening’ projections about the growth of the business-to-business commerce market. Jupiter's prediction that B-to-B commerce will expand from $336 million this year to $6.3 trillion in 2005 is likely to raise the heart rate of even the most composed IT administrators "as they try to figure out how to accommodate" such exponential expansion.

While ramping up the market place and wooing businesses online is one thing, the notion of “the quiet achiever’ tends to engender a far greater degree of integrity and reciprocal trust, providing a more stable ground upon which business can be conducted – particularly in view of the fact that barriers to entry currently remain extremely low, and hence the considerable number of talkers (as opposed to do-ers) currently swamping the market. Too much hype is never a good thing and analysts would be wise to remember this. In the meant time, before the higher margins of just in time supply can be enjoyed, businesses will first have to resolve the technological jungle of getting hooked up.

Author: Rikki Stancich, Senior Editor, Markets and Exchanges