COLLABORATIVE COMMERCE

14.7 COLLABORATIVE COMMERCE

Collaborative commerce (c-commerce) refers to non-selling/buying Ee transactions between and

among organizations, such as joint product design, joint forecasted demand, and other joint

PART V IMPLEMENTING MSS IN THE E-BuSINESS ERA

that collaborates electronically with a vendor that is designing a product or part for it. C-commerce implies communication, information sharing, joint decision-making, and collaboration, supported electronically by tools such as groupware and specially designed EC collaboration tools. DSS models may also be involved. Let us look at some areas of collaboration.

 Retailer-suppliers. Large retailers, such as Wal-Mart, collaborate with their major suppliers to conduct production and inventory planning and forecasting of demand. Such collaboration enables the suppliers to improve their production planning as well.

 Vendor-managed inventory. This is a service provided by large suppliers, such as Procter & Gamble, to large retailers, such as Wal-Mart, in which the vendor monitors and replenishes the inventory for the retailer. In some cases, vendor-managed inventory programs are now available to small retailers as well. DSS models are used to determine under quantity.

 Product design. All the parties involved in a specific product design share data and use special tools. One such tool is screen sharing, in which several people can work on the same screen while in different locations. This enables suppliers to provide quick feedback when they see the drawings of a product the customer wants. Changes made in one place are visible to others instantly. Documents that can be processed through collaborative product design include blueprints, bills of material, accounting and billing documents, and joint reports and statements (for details, see Ragusa et aI., 2001).

 Collaborative manufacturing. Manufacturers can create dynamic collaborative networks. For example, Original Equipment Manufacturers (OEM) outsource components and subassemblies to suppliers, which in the past often created problems in coordination, work flows, and communication. Collaborative tools have improved the outsourcing process, and are especially useful during changes, which may be initiated by any partner of the supply chain.

Many business activities and functions lend themselves to collaborative processes: (1) planning and scheduling: material positioning, visibility forecasts, advanced planning, forecasting, and capacity management; (2) design: mechanical, electrical, test, and others, as. well as component selection and design of and for the supply chain; (3) new product information: design validation, bill-of-material management, prototyping, production validation, and testing; (4) product-content management: generating changes, change-impact assessment, phase-in of changes; (5) order management: order capture and configuration, order tracking, and delivery arrangements; (6) sourcing and procurement: approving vendors, reverse auctions (tendering), supplier selection, strategic sourcing, component selection. A major tool for such collaboration is collaborative workflow management for production.

The major benefits of c-commerce are smoothing the flow in the supply chain, reducing inventories along the supply chain, reducing operating costs, increasing customer satisfaction, and increasing a company's competitive edge. The challenges faced by the collaborators are software-integration issues, technology selection, trust and security, and resistance to change and collaboration. Specialized tools for c-commerce applications are provided by vendors such as glyphica.com, allegis.com, lotus.corn, and ca. com. According to Maybury (2001), creating a collaborative environment requires a delicate balance of technology, knowledge, and trust. For details, see Turban et al. (2004) and the discussion of people-to-people EC in the next section.

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CHAPTER 14

ELECTRONIC

COMMERCE