Y Narahari, Computer Science and Automation, Indian Institute of Science
B2B MARKETPLACES AND E-PROCUREMENT
Y. NARAHARIComputer Science and Automation
Indian Institute of ScienceBangalore - 560 [email protected]
http://www.csa.iisc.ernet.in
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
Y Narahari, Computer Science and Automation, Indian Institute of Science
OUTLINE OF THE TALK
Introduction How do they add value? Design Issues E-Procurement
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
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
Y Narahari, Computer Science and Automation, Indian Institute of Science
E-MARKETPLACES: CATEGORIES
Horizontal Vertical Private (sell side, buy side) Public
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
Y Narahari, Computer Science and Automation, Indian Institute of Science
E-MARKETPLACES: A TAXONOMY
Operating Manufg
Systematic sourcing
MRO HUBS CATALOG HUBS
Spot sourcing YIELD MANAGERS
EXCHANGES
What is Bought
Ho
w i
t is
bo
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ht
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
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
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
Y Narahari, Computer Science and Automation, Indian Institute of Science
E-MARKETS: DESIGN ISSUES
NEGOTIATIONS Distributed Negotiations Integrative Negotiations Auctions
DESIGN OF USER INTERFACES
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
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
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.
Y Narahari, Computer Science and Automation, Indian Institute of Science
E-MARKETS: DESIGN ISSUES
TECHNOLOGYAuthentication and securityElectronic paymentSoftware architectureDistributed objectsAgents and mobilityScalability Interoperability
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
Y Narahari, Computer Science and Automation, Indian Institute of Science
E-MARKETS: SOFTWARE ARCHITECTURE
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
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
Y Narahari, Computer Science and Automation, Indian Institute of Science
E-PROCUREMENT PROCESS
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
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
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