Business-to-business electronic commerce and convergent assembly supply chain management

Abstract

Electronic commerce (e-commerce) can occur between a business and its customers, as well as between a business and its suppliers. To facilitate interorganizational e-commerce it is often necessary to share supply and demand information between supply chain partners. Based on our analysis of supply chains in several industries we identify the mechanisms (business processes) required for effective supply chain management. We also identify the information system components needed to support these mechanisms, show how the individual components can be integrated into an information infrastructure framework and identify some technologies currently available that can fit within our proposed infrastructure. We illustrate the usefulness of our framework by simulating convergent assembly (commonly associated with motor vehicle and aerospace production) supply chain performance under various information-sharing strategies supported by our proposed infrastructure. We find that inventory costs can be reduced while maintaining acceptable order fulfilment cycle times. This is true because information, which provides the basis for enhanced coordination and reduced uncertainty, can substitute for inventory.