Saturday 25 October 2014

The Impact of eCommerce on Supply Chains

Authored by  Junaid Khan

eCommerce has already a transformational impact on the way that most companies do business. Change has been rapid and fundamental, partnerships and business governance. As the economic assumptions that formed the basis for success in the old world are being overturned, eCommerce is increasingly affecting the way in which supply chains operate. Interaction and collaboration costs have been slashed. Physical assets are no longer the cornerstone of competitive success and value propositions. 

Despite all this change, the success factors of many traditional business have remained constant. We are entering in a new phase in which large multinationals are reasserting their authority over start-ups. Changes in B2C eCommerce have been fast, furious and unsettling. Changes wrought through B2B eCommerce is more aggressive and more definitive in its conclusions. Same companies are well prepared, other are awakening giants and many risk becoming the victims of the next wave.

Companies have been undergoing progressive stages of development in their eCommerce capabilities. In the earliest stages of broadcast, interact and transact, the emphasis was on creating customer and supplier awareness. Most organizations have integrated these capabilities into how they conduct and collaborate/synchronize, involve using technology to fundamentally change the way business is conducted. These last stages will have most impact on supply chains of major companies, those can achieve liquidity and scale the fastest will be most successful.

An unexpected opportunity facing most companies is that of redesigning their core business process to be smarter, more standardized, internet enabled and linked to traditional technologies can eliminate business processes. The impact of eCommerce can be viewed from an individual area such as eProcurement on the buyer side or web based selling on the seller side as well as from interaction between areas. These interactions can occur such as a design processes shared across R&D, manufacturing and marketing groups, as well as shared planning and forecasting between supplied and customers and eFulfullment interactions between internet customer services, logistics managers and third party logistics providers.