What business really wants from SCM/e-marketplace.

Nowadays thousands of IT- professionals are aware of the fact that SCM/e-marketplace is getting more and more popular. Business is a community where everybody is interdependent. Success of one party in business correlation brings benefits to the other one. Failures of others are turning into your own. Our everyday life demands are constantly changing. No wonder that being the best in your domain requires excellence in everything especially if it is an IT industry which serves as a helping hand for the overwhelming majority of other ones.

Business is a community where everybody is interdependent. Success of one party in business correlation brings benefits to the other one. Failures of others are turning into your own. Our everyday life demands speed in every single step and action. No wonder that being the best in your domain requires excellence in everything whether it is gardening or IT industry. So what is SCM/e-marketplace and what business really want from it?

E-marketplace is known as Internet-based environment that brings together business-to-business buyers and sellers so that they can trade more efficiently online. Today we are living in a high-tech era that offers lots of benefits to people. Among such benefits e-marketplace can be mentioned. It has taken corporate world with a swift trust. What can be noticeable in a further growth on that road is a common feature in the behavior of many companies. None of them paid attention to a new emerged system because most of them were concerned about reliability of a new system. But time brought changes and e-marketplace has made it easier for companies to interact with customers and suppliers online and proved its safety. Moreover, customizing conventional online services have proven to be a boon for many people.

Electronic marketplace (e-marketplaces) has a profound influence on the way in which organizations manage their supply chains. Followers of e-marketplace concept suggest that web-based trading systems would enable companies to more efficiently buy, sell, and manage their supply chain processes on a global scale. Besides every single company that has decided to apply to that system states the extension of their e-business tools of e-marketplace which are useful in channeling members in the retail sector for business-to-business Supply Chain Management flow.

Most of the companies are turning to e-marketplaces to scale up efficiencies, lower costs and broaden market reach in their domain.

The key benefits for users of such system are reduced purchasing costs, greater flexibility, saved time, better information, and better collaboration. However, the drawbacks include costs in changing procurement processes, cost of applications, set-up, and integration with internal systems, and transaction/subscription fees. With electronic marketplace you do more business.

There are three distinct types of e-marketplace: independent, in which public environments seek simply to attract buyers and sellers to trade together; consortium-based, in which sites are established on an industry-wide basis, typically when a number of key buyers in a particular industry get together; and private, in which e-marketplaces are established by a particular organization to manage its purchasing alone.

Supply chain management (SCM) is the integrated management of materials and information from raw material suppliers to the delivery of the finished product to the customer. The integrated management includes product design, production, distribution, and transportation functions. Different links in the supply chain – such as manufacturers, materials, vendors, and retailers - are collaborating using web-based technologies.

To succeed in an e-marketplace, you need SCM applications that deliver real-time communication solutions and have the flexibility to manage rapid change. Moreover, your SCM solution must add value as part of an integrated enterprise. It should communicate evenly with enterprise resource planning (ERP), customer relationship management (CRM), and e-business system solutions.

In Enterprise Resource Planning (ERP) you should remember not about resource or planning itself but mostly about the enterprise part. This is ERP’s core set. The system attempts to integrate all departments and functions across a company into a single computer system that can help to serve all those particular needs of different departments. People in the departments all see the same information and can update it. Each of those departments has its own computer system optimized for the particular ways that the department does its work. ERP combines them all together into single integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other.

You also know that CRM (Customer Relationship Management) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For instance, a company might build a database about its customers that described relationships in sufficient detail so that management, salespeople, people providing service, and the customer directly could access information, remind customers of service requirements, and know what other products a customer had purchased, and so on.

Supply Chain Management (SCM) deals with the planning & coordination of resource procuring, product marketing, production scheduling, and end-product delivering across multiple organizations. With the emergence of e-Marketplaces, it is natural to seek automated solutions that are capable with coping with dynamic market conditions and evaluating a large number of procurement options in real time while taking into account strategies employed by market competitors. It is therefore necessary to use automated programs or software trading agents to support and perform Supply Chain Management.

Nowadays modern eMarketplaces deliver a much higher return for less investment. It helps to arrange many-to-many connectivity instead of one-to-one, higher efficiency due to lower connection and network costs that saves time.

Advantages from applying such system vary between industries. But there can be some common features that can easily gather all businesses under one SCM/e-marketplace roof.

General business benefits can be gained from new partnerships and collaboration between businesses of one organization or from several interdependent businesses of one company of enterprise. In that case supply chain management is more active and effective.
Established & operating in a hi-tech way e-marketplace system can provide a level of confidence and faith for all engaged in working with that.

Also e-marketplaces offer declining of promotion, marketing and advertising costs. That is why other information systems and channels can be hardly compared to SCM/e-marketplace.

But before breaking your neck in using e-marketplace it is always better to decide properly whether it fits to your business or not. There are some issues that need to be considered.

-You should take into account your domain (whether it is a chewing gun manufacturing or heavy industry).

-You need to know who share the profits & the risks in order to reduce costs

-You need to make sure that your company has a strong image or brand to think about marketing and promotion without fear of being mistaken.

-You should definitely take into account technical issues and your facilities to cope with tough situations which might occur.

Good SCM/e-marketplace solutions require a synthesis of several fields: information technology, economics, industrial operations research, organization management, artificial intelligence, multi-agent systems and statistics.

These facts prove that eMarketplace, or electronic marketplace creates a single standard process for transacting business with lots of pluses & bonuses. It is more than just the next wave of computer-aided marketing; it's a way of doing business. This is exactly what business needs.

Vera Leonik , eMarketing Specialist at Qulix Systems – Custom Software Development Company, located in Minsk, Belarus, Eastern Europe. Our client-oriented approach and effective offshore software development services are the things that will help you to achieve your business goals. For more detailed information on SCM/e-marketplace, please feel free to contact us. Copyright 2007© Vera Leonik. All rights reserved.

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