B2b and B2c Supply Chains

B2B and B2C Supply Chains

With the popularity of the Internet has come a metamorphosis for brick-and-mortar businesses. They have seen the necessity to move business opportunities to the Web. Customer purchases of products and services over the internet have greatly increased. Also, businesses have seen a benefit in handling “paperwork” electronically and are shifting to an electronic based supply chain. This paper will explain what Business to Business and Business to Customer means, as well as show the supply chains differ.

Supply Chain

A supply chain is, essentially, all parts of the process that bring a product or service from the business (or seller) to its intended end-destination point. In this technology age, the supply chain management had moved towards IT-based managing and many of the steps in the supply chain can now be done electronically. This saves the company time, money, and reduces human error and oversight.

Business to Business

Business to Business (B2B) means that a “business sells products or services to other businesses” (Schneider, 2004). The article in Network World “The Art of Balancing E-Commerce Processes”, by Ann Bednarz gives an example of B2B eCommerce. The article explains how Wal-Mart is forcing its suppliers to upgrade their eCommerce infrastructures. The company spotlighted, Murray, Inc, was already using Electronic Data Interchange (EDI) to do electronic exchanges of purchase orders, invoices, etc (Bednarz, Feb. 7, 2005). Wal-Mart is now demanding of its business partners the transfer to AS2, which operates over a higher internet protocol-usually HTTPS or S-MIME. The article continues on to explain how the IT is evolving and adapting to become more secure and streamlined for all involved.

Working on a B2B site, the businesses have access to the “back door” of each other. This is where all of the paperwork occurs: invoicing, purchase orders, file swaps, shipping requests and notifications, routing instructions, etc. For Wal-Mart and Murray, the electronic supply chain drives the physical shipment and delivery. The site logistics is geared more towards purchasing, shipping, receiving and warehousing.

Business to Customer

Business to Customer (B2C) means that a business sells products or services to a customer. In this context, it would mean a business selling products or services to a customer on the Web. The first thought of B2C would be a customer walking into a store. Now, it can be a customer buying any number of products from the very popular Overstock.com or buying discounted books from Borders.com. B2C also includes online banking and investing.

The Differences

All of the above examples are of online usage. To help online users, most websites are laid out in the same general fashion. There is a section for FAQs, a place to search, a place to contact the business, a type of online catalog, and an ordering section. In regards to eCommerce, this is where the similarities end for B2B and B2C.

The B2B supply chain has fewer channels to flow through to get the product to the other business, versus the B2C supply chain, but the channels are much broader. In the Wal-Mart/Murray example, Wal-Mart sends an order for a product, the order is received and cataloged, and the product is shipped. Also, with