The Internet has had a profound effect on business operations. Many companies now look beyond their own organisational boundaries to form collaborative relations with others to improve operational efficiency, effectiveness and, thereby, competitiveness.
Select an industry and using real life examples:
Analyse the impact of the Internet on supply chain and network processes.
The Internet was not the first technology to provide electronic communications between companies and suppliers and enhance supply chains. The pre-internet systems called Electronic Data Interchanges were first employed as early as in the sixties.
Electronic Data Interchange is "the computer-to-computer interchange of strictly formatted messages that represent documents other than monetary instruments. EDI implies a sequence of messages between two parties, either of whom may serve as originator or recipient. The formatted data representing the documents may be transmitted from originator to recipient via telecommunications or physically transported on electronic storage media."(The National Institute of Standards and Technology, 1996).
In late eighties EDIs were used by the big companies like Tesco to create JIT (Just-In-Time) style supply chains with their suppliers, which, effectively increased the reordering and restocking, therefore, not running out of inventories. These, companies profited well from the technologies, but not all could afford it. The EDIs were expensive to implement and were used in B2B environments, they were not designed for B2C sales and had many limitations. Thus, small and even medium size companies could not easily integrate it, due to the numerous standards and protocols, unless they were a supplier to an already big company and attached to a particular unified network.
However, eventually, the Internet has provided a means for any company, no matter how small or where they are located, to become part of a major supply chain initiative hosted by, for example, a major retailer, manufacturing company, or just a big web host (marketplace). Thus, web-based EDI allows for a company to interact with its suppliers or buyers in different areas without the worrying of implementing a complex EDI infrastructure. This is, because, unlike the original EDI systems, where there was a need for some standards or protocols to be implemented by all the involved companies, web-EDI enables small to medium-sized businesses to receive, turn around, create and manage electronic documents using just a normal web browser. The Internet allows receiving EDI documents, and sending EDI invoices and shipping documents, with no special software to install all that is required is an Internet connection. Also, more importantly the Internet allowed creating a more direct sale right from the web straight to the end user, which changed the classic approach to trading and promoting goods the supply network just got leaner and more competitive and therefore efficient.
The Internet has changed almost all industries including second hand car market, the clear example would be the website called: autotrader.co.uk. It is the biggest car market in the UK, because, it simply allows for anybody or any company to contact/find customers on the web, therefore, allowing to all the interested parties whether buyers or sellers to meet in one place.
AutoTrader itself is not a car trader, however, it sells a different service - it hosts a virtual marketplace, therefore, integrating and collaborating with the companies that sell cars to help them to advertise on a larger scale. Moreover, one can also find and purchase car insurance, parts and accessories for their cars, and finance deals too.
Thus, car-trading firms have moved from just the usual way of selling cars in a particular local area where they were merely displaying their vehicles in the garages, to more relying on the Internet sales, as it proved more efficient and quick. This is because people that want a particular car for particular money would most likely go on-line to find out the current value of a car and choose the closest and best value vehicle. By such sales firms need not invest a lot into advertising and building a fancy showroom, because most of customers already arrive with intention to buy a specific car that they have seen on the website.
The National Institute of Standards and Technology "Electronic Data Interchange (EDI)" Federal Information Processing Standards Publication 161-2 on 29th April 1996 http://www.itl.nist.gov/fipspubs/fip161-2.htm Sited: 20th March 2010.
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