B2B
Supply Chain Differences in B2B and B2C Commerce
According to Bamboo web, a popular Internet source of business management information, a supply chain of a company has three main parts. The first is the business' original supply, namely where its raw materials or raw products come from and how these items are procured and supplied to manufactures. The manufacturing component of the supply chain converts these raw materials into finished products through manufacturing in the traditional sense, or packaging according to company standards. Proper distribution ensures that these finished products reach the final customers in an optimal fashion through a coordinated network of distributors, managers, and retailers. (Bamboo web, "Supply Chain," 2004)
Supply chain management involves forecasting demand of either businesses or consumers and making collective market forecasts with manufactures and according to consumer data. It involves predicting and promising order to distributors and customers, as well as determining the optimum plants and markets for products. (Bamboo web, "Supply Chain," 2004) In B2B, or business-to-business commerce, the raw materials of the supply chain are often just that -- raw materials. The buyers are other businesses. For example, a coffee bean company might sell its beans to a variety of supermarkets and specialty...
Or the raw material could be shoes. One leather company might sell its leather B2B to a shoe making company, which then sells the shoes B2B to retailers. Unlike the B2Bs, the B2C businesses sell products to consumers. The B2Cs must forecast the consumer demand as well as business demands on a monthly and yearly schedule.
Like B2B, but on a smaller scale, the B2Cs engage in production and distribution planning, involving coordinating the actual production and distribution plans for a whole enterprise and production scheduling, but on a less onerous fashion, as B2C companies have less to produce on a manufacturing side, typically. However, they may have more complex inventories and thus may have to more carefully plan later in the supply chain a schedule of reduction of costs (Bamboo web, "Supply Chain Management," 2004)
B2B commerce or business-to-business firms typically deploy two different types of market strategies that affect the supply chain. Vertical companies work within an industry. These firms may have less potential for expansion but can exercise narrow market dominance. Two of the largest vertically oriented B2B companies are Internet Capital Group and Vertical Net, each of which owns numerous subsidiaries operating in hundreds of different verticals. Horizontal B2B companies operate across numerous different verticals or…
