class 12, 13 and 14

Supply Chain Management

Supply Chain Management

• Supply chain management (SCM) is the management of the flow of goods and services.

• It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.

• Interconnected or interlinked networks, channels and node businesses are involved in the provision of products and services required by end customers in a supply chain.

• Supply chain management has been defined as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally."

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Benefits of supply chain management


Realization of benefits


Members of the supply chain: (a) simplified view, (b)

including intermediaries


A typical supply chain for a B2B company


Push and pull approaches to supply chain management


A typical IS infrastructure for supply chain management


Alternative strategies for modification of the e-business

supply chain


E-Procurement


The 5 Rights of E-Procurement

• at the right price

• delivered at the right time

• are of the right quality

• of the right quantity

• from the right source.


Key procurement activities within an organization


Process flow analysis for traditional procurement


Process flow analysis for new procurement


Use of different information systems for different aspects

of the fulfilment cycle


The three main e-procurement model alternatives for

buyers


Integration between e-procurement systems and

catalogue data


E-Marketing


E-Marketing

• Marketing is the management process responsible for identifying,

anticipating and satisfying customer requirements profitability

• Which e-marketing tools can assist?

• Web, e-mail, databases, wireless and digital television


The operational and management processes of e-

marketing


The e-marketing plan in the context of other plans


SOSTAC– a generic framework for e-marketing planning


Inputs to the e-marketing plan from situation analysis


Stages in target marketing strategy development


Channels requiring integration as part of integrated e-

marketing strategy


Channel integration required for e-marketing and mixed-

mode buying


The elements of the marketing mix


E- Customer Relationship

Management


E-CRM – A Definition

• E-CRM is:

• Applying…Internet and other digital technology… (web, e-mail, wireless, iTV, databases)

• to… acquire and retain customers (through a multi-channel buying process and customer lifecycle)

• by…improving customer knowledge, targeting, service delivery and satisfaction


Marketing Applications of CRM

• A CRM system supports the following marketing applications:– Sales force automation (SFA). Sales representatives are supported in their account

management through tools to arrange and record customer visits

– Customer service management. Representatives in contact centres respond to customer requests for information by using an intranet to access databases containing information on the customer, products and previous queries

– Managing the sales process. This can be achieved through e-commerce sites, or in a B2B context by supporting sales representatives by recording the sales process (SFA)

– Campaign management. Managing ad, direct mail, e-mail and other campaigns

– Analysis. Through technologies such as data warehouses and approaches such as data mining, which are explained further later in the chapter, customers characteristics, their purchase behaviour and campaigns can be analyzed in order to optimize the marketing mix.


The four classic marketing activities of customer

relationship management


Reach–Act–Convert–Engage model


A summary of how the Internet can impact on the buying

process for a new purchaser


Different information sources as important when

researching a product or service


Activity segmentation of a site requiring registration


Customer life cycle segmentation


An overview of the components of CRM technologies


E-Payment system


Tools used to establish secure Internet communications

channels

• Secure Sockets Layer (SSL)/Transport Layer Security (TLS)—This is the most common form of securing channels. The SSL protocol provides data encryption, server authentication, client authentication, and message integrity for TCP/IP connections.

• Virtual private networks (VPNs)—These allow remote users to securely access internal networks via the Internet, using PPTP, an encoding mechanism that allows one local network to connect to another using the Internet as the conduit.

• WPA2—the most current wireless security standard uses the AES algorithm for encryption and CCMP, a more advanced authentication code protocol


Tools to protect networks, the servers, and clients

• Firewalls—software applications that act as filters between a company’s

private network and the Internet itself, preventing unauthorized remote client

computers from attaching to your internal network.

• Proxies—software servers that act primarily to limit access of internal clients

to external Internet servers and are frequently referred to as the gateway.

• Intrusion detection and prevention systems (IDS/IDP)—an IDS examines

network traffic, watching to see if it matches certain patterns or preconfigured

rules indicative of an attack, while an IPS has all of the funcationality of an

IDS with the additional ability to take steps to prevent and block suspicious

activities.


Tools to protect networks, the servers, and clients

• Operating system controls—built-in username and password

requirements that provide a level of authentication. Some operating

systems also have an access control function that controls user access

to various areas of a network.

• Anti-virus software—a cheap and easy way to identify and eradicate

the most common types of viruses as they enter a computer, as well as

to destroy those already lurking on a hard drive.


Types of Payment Systems

• Cash

• Checking Transfer

• Credit Card

• Stored Value

• Accumulating Balance


Cash

• Legal tender defined by a national authority to represent value

• Most common form of payment in terms of number of transactions

• Instantly convertible into other forms of value without intermediation of

any kind

• Portable, requires no authentication, and provides instant purchasing

power

• “Free” (no transaction fee), anonymous, low cognitive demands

• Limitations: easily stolen, limited to smaller transaction, does not

provide any float


Checking Transfer

• Funds transferred directly via a signed draft or check from a

consumer’s checking account to a merchant or other individual

• Most common form of payment in terms of amount spent

• Can be used for both small and large transactions

• Some float

• Not anonymous, require third-party intervention (banks)

• Introduce security risks for merchants (forgeries, stopped payments),

so authentication typically required


Credit Card

• Represents an account that extends credit to consumers, permitting

consumers to purchase items while deferring payment, and allows

consumers to make payments to multiple vendors at one time

• Credit card associations: Nonprofit associations (Visa, MasterCard) that

set standards for issuing banks

• Issuing banks: Issue cards and process transactions

• Processing centers (clearinghouses): Handle verification of accounts

and balances


Stored Value

• Accounts created by depositing funds into an account and from which

funds are paid out or withdrawn as needed

– Examples: Debit cards, gift certificates, prepaid cards, smart cards

– Debit cards: Immediately debit a checking or other demand-deposit account

– Peer-to-peer payment systems such as PayPal a variation


Accumulating Balance

• Accounts that accumulate expenditures and to which consumers make

period payments

– Examples: utility, phone, American Express accounts


Current Online Payment Systems

• Credit cards are dominant form of online payment, accounting for

around 80% of online payments in 2005

• New forms of electronic payment include:

– Digital cash

– Online stored value systems

– Digital accumulating balance payment systems

– Digital credit accounts

– Digital checking


Digital Cash

• One of the first forms of alternative payment systems

• Not really “cash”: rather, are forms of value storage and value

exchange that have limited convertibility into other forms of value, and

require intermediaries to convert

• Many of early examples have disappeared; concepts survive as part of

P2P payment systems


Online Stored Value Systems

• Permit consumers to make instant, online payments to merchants and

other individuals based on value stored in an online account

• Rely on value stored in a consumer’s bank, checking, or credit card

account


Digital Accumulating Balance Payment Systems

• Allows users to make micropayments and purchases on the Web,

accumulating a debit balance for which they are billed at the end of the

month

• Examples: Qpass, Valista, Clickshare, Click & Buy, Peppercoin


Digital Credit Card Payment Systems

• Extend the functionality of existing credit cards for use as online

shopping payment tools

• Focus specifically on making use of credit cards safer and more

convenient for online merchants and consumers

• Example: eCharge


Digital Checking Payment Systems

• Extend the functionality of existing checking accounts for use as online

shopping payment tools

• Examples: PayByCheck, Western Union MoneyZap


Online Credit Card Transactions


The key participants in processing card payments online

include

• Acquiring bank

• Credit card association

• Customer

• Issuing bank

• Merchant

• Payment processing service

• Processor


The SET (Secure Electronic Transaction) Protocol

• Authenticates cardholder and merchant identity through use of digital

certificates

• An open standard developed by MasterCard and Visa

• Transaction process similar to standard online credit card transaction,

with more identity verification

• Thus far, has not caught on much, due to costs involved in integrating

SET into existing systems, and lack of interest among consumers


How SET Transactions Work


Digicash: How First Generation Digital Cash Worked


Most Common Payment Systems, Based on Number Of

Transactions


Most Common Payment Systems, Based on Amount


Various Payment Methods Offered Online Merchants


Electronic Billing Presentment and Payment (EBPP)

• Online payment systems for monthly bills

• EBPP expected to grow rapidly, to an estimated 40% of all households

by 2007

• Main business models in EBPP market include:

– Biller-direct

– Consolidator

• Above are supported by EBPP infrastructure providers


Major Players in the EBPP Marketspace


B2B Payment Systems

• More complex than B2C

• Major types:

– Systems that replace traditional banks (example: TradeCard, Orbian)

– Financial institutions hoping to extend to the B2B marketplace

– Credit card companies


class 12, 13 and 14

Business