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B2B MARKETPLACES AND E-PROCUREMENT

B2B MARKETPLACES AND E-PROCUREMENT. Y. NARAHARI Computer Science and Automation Indian Institute of Science Bangalore - 560 012 hari@csa.iisc.ernet.in http://www.csa.iisc.ernet.in. OBJECTIVES OF THE TALK.

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B2B MARKETPLACES AND E-PROCUREMENT

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  1. Y Narahari, Computer Science and Automation, Indian Institute of Science B2B MARKETPLACES AND E-PROCUREMENT Y. NARAHARI Computer Science and Automation Indian Institute of Science Bangalore - 560 012 hari@csa.iisc.ernet.in http://www.csa.iisc.ernet.in

  2. Y Narahari, Computer Science and Automation, Indian Institute of Science OBJECTIVES OF THE TALK • To bring out and understand the "important" role of electronic marketplaces in supply chain management • To understand "critical" design and implementation issues of E-marketplaces • To understand the issues in E-procurement

  3. Y Narahari, Computer Science and Automation, Indian Institute of Science OUTLINE OF THE TALK • Introduction • How do they add value? • Design Issues • E-Procurement

  4. Y Narahari, Computer Science and Automation, Indian Institute of Science ELECTRONIC MARKETS • E-marketplaces are emerging to serve each point of every industry's supply chain • E-markets are highly collaborative E-Business models that organize complex business processes between multiple participants into a virtual commerce community

  5. Y Narahari, Computer Science and Automation, Indian Institute of Science E-MARKETPLACES :VALUE CREATION • efficient transactional processes • new business relationships • new business models • new businesses

  6. Y Narahari, Computer Science and Automation, Indian Institute of Science E-MARKETPLACES: CATEGORIES • Horizontal • Vertical • Private (sell side, buy side) • Public

  7. Y Narahari, Computer Science and Automation, Indian Institute of Science EMERGENCE OF E-MARKETS • Alliance of IBM - i2 - Ariba • Alliance of GM - Ford - Chrysler • Alliance of mySAP- Commerce One - Oracle • chemdex, plasticsnet, e-steel, paperexchange, metalsite, capacityweb, mro, bandx, logisticsweb, etc. • In India: Indiamarkets.com, eBizchem.com, Autoexchanges

  8. Y Narahari, Computer Science and Automation, Indian Institute of Science E-MARKETPLACES: A TAXONOMY What is Bought How it is bought

  9. Y Narahari, Computer Science and Automation, Indian Institute of Science BENEFITS TO BUSINESSES • Extend the presence and reach of a company • Facilitate doing business with anyone, anytime, anywhere • Aggregation of content and facilitation of workflow lead to significant reduction in transaction costs • Cycle times are reduced and deliveries are quicker • Improves relationship with trading partners • market efficiencies • Better inventory management • Better visibility leading to predictability

  10. Y Narahari, Computer Science and Automation, Indian Institute of Science BENEFITS TO BUYERS • Aggregation of multiple suppliers • Direct access to suppliers and through dynamic pricing • Location and tracking of new suppliers • Provides more negotiating power • Leads to quick response buyers

  11. Y Narahari, Computer Science and Automation, Indian Institute of Science BENEFITS TO SUPPLIERS • Provides reach to vast, untapped global markets • True value of products can be realized through aggregation and participation of buyers • Enables to support JIT practices • Leads to quick response suppliers

  12. Y Narahari, Computer Science and Automation, Indian Institute of Science E-MARKETS: DESIGN ISSUES • NEGOTIATIONS • Distributed Negotiations • Integrative Negotiations • Auctions • DESIGN OF USER INTERFACES

  13. Y Narahari, Computer Science and Automation, Indian Institute of Science E-MARKETS: DESIGN ISSUES ALGORITHMS • Buyer Aggregation • Supplier Aggregation • Demand Aggregation • Buyer-Seller Matching • Dynamic Pricing • Multi-Attribute Auctions • Combinatorial Auctions

  14. Y Narahari, Computer Science and Automation, Indian Institute of Science EXAMPLE OF A MARKET ALGORITHM • 3 BUYERS and 4 SUPPLIERS • Buyer X : (50 A, 10 B) • Buyer Y : (20 B, 30 C) • Buyer Z : (40 A, 20 C, 10 D) • BUNDLING • Bundle 1: (90 A) Negotiated contract • Bundle 2: (30 B, 50 C) Sealed bid auction • Bundle 3: (10 D) Dynamic auction

  15. Y Narahari, Computer Science and Automation, Indian Institute of Science EXAMPLE OF A MARKET ALGORITHM • Sealed Bid Combinatorial Auction • Supplier P : (10 B, 10 C, p) • Supplier Q : (30 B, q) • Supplier R : (50 C, r) • Supplier S : (20 B, 50 C, s) • An optimization algorithm decides the best bids and handpicks the optimal subset of bids, based on cost, delivery times, etc.

  16. Y Narahari, Computer Science and Automation, Indian Institute of Science E-MARKETS: DESIGN ISSUES • TECHNOLOGY • Authentication and security • Electronic payment • Software architecture • Distributed objects • Agents and mobility • Scalability • Interoperability

  17. Y Narahari, Computer Science and Automation, Indian Institute of Science E-MARKETS: DESIGN ISSUES • INTEGRATION • with existing best practices • with existing business processes • with existing catalogs • with ERP software • with the backend • with other E-markets

  18. Y Narahari, Computer Science and Automation, Indian Institute of Science E-MARKETS: SOFTWARE ARCHITECTURE

  19. Y Narahari, Computer Science and Automation, Indian Institute of Science E-PROCUREMENT • All activities involved in obtaining materials and services and managing their inflow into an organization toward the enduser • Basic steps: • Information • Negotiation • Settlement

  20. Y Narahari, Computer Science and Automation, Indian Institute of Science EMERGENCE OF E-PROCUREMENT • Electronic catalogs • Internet search engines • Web-EDI • On-line auctions and bidding • Advances in E-commerce

  21. Y Narahari, Computer Science and Automation, Indian Institute of Science E-PROCUREMENT PROCESS

  22. Y Narahari, Computer Science and Automation, Indian Institute of Science BEST PRACTICE E-PROCUREMENT SYSTEMS • Dell online (Ariba Buyer) • Cisco • Enron corporation (mySAP and Commerce One) • Lockheed Martin (mySAP) • GE capital (i2 Buyside solution) • Defense Logistics Agency • Lawrence Livermore Laboratories

  23. Y Narahari, Computer Science and Automation, Indian Institute of Science E-PROCUREMENT: VALUE ADDITIONS • Demand aggregation • Bundling and supplier aggregation • Optimal vendor selection • Innovative dynamic auctions • Multi-attribute decision support

  24. Y Narahari, Computer Science and Automation, Indian Institute of Science CONCLUSIONS • E-markets are key to faster and more efficient trade • E-markets have a positive influence all through the supply chain • There are challenging technical and technological issues in setting up and operating E-markets • E-procurement has emerged in a big way

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