Supply Chain Management

Supply Chain Management: B2B vs. B2C

With the advent of the Internet, doing business online seemed to be the logical step towards progression in the business world. Walmart.com is a perfect example of a business-to-consumer (B2C) site that sells merchandise to consumers through its website. This is also a good example of a brick and click store where its online component compliments the brick and mortar side. However, Wal-Mart needs to procure its products from numerous manufacturers. In this sense, when Walmart.com is procuring supplies from manufacturers, it deals with business-to-business transactions to stock inventory for sale online.

Electronic data interchange (EDI) is an important part of business-to-business transactions as EDI is a computer-to-computer transfer of business information between two businesses that share a standard format, such as bills of lading, or purchase order forms (Schneider, 2004, p. 216, ¶ 3). These bills of ladings, purchase order forms, receiving reports, paper invoices, and quote requests account for 75 percent of all exchanged information by businesses that exchange information with one another (trading partners). In this sense, EDI is the earliest form of electronic commerce, some 20 years prior to the introduction of the Internet as a sales medium (Schneider, 2004, p.216 ¶ 4).

In a B2B site, it is common to find that other companies other than the B2B site perform various support activities for the B2B, which lends credence to firms moving towards a network model of economic organization. For example, a company like Ceridian specializes in payroll, and large corporations often outsource to Ceridian to ensure accuracy and security, as well as provide an economic alternative to hiring and training payroll specialists within the company. Ceridian may use a document storage company to hold all the payroll documents, and an online storage company can provide storage for the payroll and document storage company. These...