Electronicmarket presentation

objectives
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

outlines

Introduction How do they add value? Design Issues E-Procurement

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

E-MARKETPLACES : VALUE CREATION

efficient transactional processes new business relationships new business models new businesses

E-MARKETPLACES: CATEGORIES

Horizontal Vertical Private (sell side, buy side) Public

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

E-MARKETPLACES: A TAXONOMY
What is Bought

Operating Systematic sourcing Spot sourcing MRO HUBS

Manufg CATALOG HUBS

How it is bought

YIELD EXCHANGES MANAGERS 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

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

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

E-MARKETS: DESIGN ISSUES

NEGOTIATIONS
Distributed Negotiations Integrative Negotiations Auctions

DESIGN OF USER INTERFACES

E-MARKETS: DESIGN ISSUES

ALGORITHMS Buyer Aggregation Supplier Aggregation Demand Aggregation Buyer-Seller Matching Dynamic Pricing Multi-Attribute Auctions Combinatorial Auctions

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) Bundle 1: (90 A) Bundle 2: (30 B, 50 C) Bundle 3: (10 D)

BUNDLING

Negotiated contract Sealed bid auction Dynamic auction

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.

E-MARKETS: DESIGN ISSUES

TECHNOLOGY
Authentication and security Electronic payment Software architecture Distributed objects Agents and mobility Scalability Interoperability

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

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

EMERGENCE OF E-PROCUREMENT

Electronic catalogs Internet search engines Web-EDI On-line auctions and bidding Advances in E-commerce

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

E-PROCUREMENT: VALUE ADDITIONS

Demand aggregation Bundling and supplier aggregation Optimal vendor selection Innovative dynamic auctions Multi-attribute decision support

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