© 2011 Sixhills Consulting Ltd1. Key Drivers Enabling Move On-line2. Category ExamplesFirst moversComplexSimpleRaw materialsBuyer approval process complexityLowHighTransaction inefficiencyExpress mailRetail utilitiesNatural gasBasic chemicalsPulp and paperOffice suppliesPCsSoftwareMROStandard semiconductorsAssembly componentsLow-end networking productsFreightAirplanes/locomotivesMainframesSatellitesTraining servicesFinancial servicesTemporariesAdvertisingHeavy machineryASICsSecond-wave moversLess likely/longer termVertical industry (i.e. direct purchases)Horizontal (i.e. generic commodity, indirect purchases)Travel servicesTelecomsGlass Prod'sLight ChemMed. EquipAg. ProductsConsultingFleetTiming of move on-line Category typeIllustrativeIllustrativeIn general terms categories will move online depending on the complexity of the approval process and the relative inefficiency of transactionPropensity to Move On-lineBuyer Approval Process ComplexityCan Go On-Line if . . . • Product Specification Complexity• Clear standards exist or can be defined• Vendor Quality/ Service /Differences• Vendor service level criteria are definable• Purchasing Frequency• Orders frequency is high• Perceived Corporate Value• Relatively unimportant• Authorisation Process in Place• Systems are bypassed regularlyTransaction InefficiencyCan Go On-Line if . . . • Information Flow/ Price Transparency• Pricing is bundled and info unclear• Number of Supply Points• Competitors are numerous• Number of Purchasers• (In)direct buyers are numerous• Distribution Channel Complexity• Supply chain fragmented with numerous middlemen• Contract Complexity• Terms are clear/standardB2B PerspectivesP6
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