B2c and B2b Supply Chains

B2C and B2B Supply Chains

Electronic Commerce (e-Commerce) is made up of two different types of business models; Business to Consumer (B2C) and Business to Business (B2B). Along with the fact that the ultimate customer is different for each type of e-Commerce, the supply chain for each is very different as well. In general, the goal of any business is to provide a good or service for their customer in exchange for a sum of money. Depending on whom the customer is the supply chain will need to be tailored to meet the needs of the business. The following will examine how the supply chain differs on a B2C site compared to a B2B site.

In a B2C site, the goal is to create an atmosphere that will cause the consumer to want to shop and spend money. The consumer is ultimately looking for convenience while also placing huge demands on a retailer’s fulfillment capabilities. Fulfillment is one of the major challenges of B2C e-Commerce. During Christmas time in 1999, Toys “R” Us ran into a colossal issue with fulfillment when they were unable to deliver some Christmas orders on time. Since then, companies have spent billions to improve their logistical systems in order to guarantee on-time delivery. Although instant customer gratification is not easy, successful B2C sites are finding that these annoyances can be soothed with increased focus and investment in supply chain and logistical technologies. A typical B2C supply chain is comprised of a supplier, manufacturer, wholesaler, retailer, and buyer. This supply chain is applied to many aspects of the site including acquisition of direct supplies, indirect supplies and the abilities of the site to fulfill consumer demands. The B2C e-Commerce supply chain can almost be viewed as negotiation free. That makes it easier for retailers to put a catalog online. Once the product line is determined, the consumer only has the option of choosing from what is available. Successful B2C sites will both transform their supply chains into value chains for the customer, and incorporate significant customer relationship management capabilities into their processes. Other aspects of the supply chain for B2C e-Commerce are very similar to any other retail establishment. There is a need to order direct and indirect supplies to make the business run smoothly. Information technology (IT) is a major part of the supply chain of a B2C site. Along the same line of customer satisfaction, IT systems need to be able to offer the technical options that customers want to enhance their shopping experience. Coming back to the most obvious defining factor between B2C and B2B e-Commerce, the customer is the driving force behind the differences in supply chains.

In a B2B site, the goal of the company is far different from that of a B2C site. Instead of focusing on the consumer, the focus is directed towards establishing effective communication with business partners. Unlike B2C sites, B2B sites use negotiation and system integration as tools in their supply chain. With B2B transactions, buying and selling with other businesses involves haggling over prices, delivery and product specifications. This process does not happen when dealing directly with the consumer.

Computer system integration between business partners is crucial in conducting B2B e-Commerce because of the fact that both sides of the transaction need to be able to translate the information being transmitted. Along with this integration comes an inherent need for greater security. Without the comfort of knowing that the integration is secure, there would not be any businesses that would agree to disclose their information with a business partner.

Currently, there are choices in communication technology to use in conducting B2B e-Commerce securely. Electronic Data Interchange