Private Exchange Technology, and Specifically the Internet

Private Exchange Technology, and specifically the internet and the vast amount of connect ability it provides, has stirred things up in the business world as well. This essay will discuss the effect of business to business (B2B) private exchange systems that certainly take advantage of the automation and computer technology that is available today to improve business and create more of a competitive advantage. Automation is the key to lightening the labor loads and producing fast and efficient products or services.

The mechanization of today's industries, and specifically the B2B industry, has demonstrated that new markets and exchange techniques have a valid place within this new type of operation. B2B type companies that employ logistics, procurement and inventory control can stand to benefit greatly from automation. There are several ways to begin this process and infuse automation into a private exchange. One method attempts to integrate the B2B exchange to automate the simple business processes like buying, selling etc.

The other method can simply create a private exchange and fuse two business into one and eliminate the human aspect to the transaction. Kenjale & Phatak (2002) agreed with this idea when they wrote "Business-to-business (B2B) exchanges or marketplaces provide dramatic opportunities to automate collaborative business processes with customers and suppliers, generate internal efficiencies, and reach new markets at minimal cost." In this type of environment, information and data flows much quicker and with greater precision.

A private exchange where businesses can automate their own exchanges has great potential to help make effectiveness a new priority within the business world. A specific example of this type of exchange would be when a car repair company needs to purchase a certain part such as a driving wheel. This company's information technology would be able to search and find this part, digitally and online, and make a purchase.

Additionally, new inventory recordings can be taken during this process making forecasting and other tricky procurement tasks that much simpler to perform. The one downside to this ability is the decreased demand for human labor.