Among all operations, web operations are taking on an important role in the global trend of the purchasing process. During recent years, more and more people have begun to use the Internet and to buy a wide range of goods online. The World Wide Web (WWW) allows people to communicate simultaneously or asynchronously easily and effectively, shortening distance and time between individuals1.
E-commerce is a new sales tool, in which consumers are able to participate in all the stages of a purchasing decision, while going through processes electronically rather than in a real shop. E-commerce is the process of trading goods, information, or services via computer networks including the Internet2; 3. There is an increasing consensus that e-commerce will represent a large share of retail markets in the future 4.
E-commerce channels in traditional companies have changed their operations and business strategy. That impact has been described by three main issues: integration, customization, and internationalization. First, e-commerce networks improve value chain integration by reducing transaction costs, facilitating JIT delivery, and improving information collection and processing5; 6. Secondly, e-commerce databases and direct links between producers and customers support high levels of product and service customization7. Finally, the Internet’s international scope allows small companies to reach customers worldwide8; 9.
As the Internet becomes more popular, e-commerce promises to become a mainstay of modern business10. There are dozens of e-commerce applications such as home banking, shopping in online stores and malls, buying stocks, finding a job, conducting an auction and collaborating electronically on research and development projects11.
According to Gunasekaran et al.12, e-commerce supports functional activities in organization: marketing, purchasing, design production, sales and distribution, human resource management, warehousing and supplier development. For example, the advent of e-commerce has changed marketing practice 13. E-commerce systems should provide sure access to use, overcoming differences in time to business, location, and language between suppliers and customers and at the same time support the entire trading process in Business to Business (B2B) e-commerce14. Communication and data collection constraints are reduced with web-based production of goods and services. Using database management, data warehouse, and data mining technologies, the web can facilitate interaction with customers and suppliers, data collection, and data analysis processes15.
Table 8.5 16 summarises e-commerce applications and e-commerce tools and systems to suggest how e-commerce might support functional activities.
|
Functional areas |
E-commerce applications |
E-commerce tools and systems |
|
Marketing |
Product promotion, new sales channels, direct savings, reduced cycle time, customer services. |
B2B e-commerce, Internet ordering, website for the company. |
|
Purchasing |
Ordering, fund transfer, supplier selection. |
EDI, Internet-purchasing. |
|
Design |
Customer feedback, research on customer requirements, product design, quality function deployment, data mining and warehousing. |
WWW integrated CAD, Hyperlinks, 3D navigation, Internet for data and information exchange. |
|
Production |
Production planning and control, scheduling, inventory management, quality control. |
B2B e-commerce, MRP, ERP, SAP. |
|
Sales and distribution |
Internet sales, selection of distribution channels, transportation, scheduling, third party logistics. |
Electronic funds transfer, bar-coding system, ERP, WWW integrated inventory management, Internet delivery of products and services. |
|
Human resource management |
E-recruitment, benefit selection and management, training and education using WWW. |
E-mails, interactive web sites, WWW based multimedia applications. |
|
Warehousing |
Inventory management, forecasting, scheduling of work force. |
EDI, WWW integrated inventory management. |
|
Supplier development |
Partnership, supplier development. |
WWW assisted supplier selection, e-mails, research on suppliers and products with WWW and intelligent agents. |
The open standard of the Internet ensures that large organizations can easily extend their trading communities, by increasing the efficiency of their business operations. According to Gunasekaran et al.17, Internet-based e-commerce enables companies to:
- Shorten procurement cycles through the use of online catalogues, ordering, and payment;
- Reduce development cycles and accelerate time-to-market through collaborative engineering, product, and process design;
- Gain access to worldwide markets at a fraction of traditional costs;
- Significantly increase the speed of communication, especially international communication;
- Drastically reduce purchasing and production cycles;
- Reduce the cost of communication that in turn can reduce inventory and purchasing costs;
- Promote a closer relationship with customers and suppliers;
- Provide a quick and easy way of exchanging information about a company and its products, both internally and outside the organization.
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