EcommerceIntegrated Systems [Archives:2003/678/Education]

October 20 2003

Najeeb Yahya
NCC Education – Yemen

With increased interoperability of systems and greater information sharing within organizations, various ways of integrating systems have emerged to enable the sharing and management of resources:
• intranets;
• database publishing;
• workflow.

An intranet is the use of Internet technology and standards on internal corporate networks. Instead of information sitting on various machines around the organization, a central resource of information can be stored, maintained and updated on a single server. Everyone within the organization can then be given access to some, or all, of this information (according to their position). Where information is too sensitive to be published on the Internet, companies may choose to extend the use of a controlled part of their intranet (such as a database of products and prices) to trading partners. This is known as an extranet. Because the intranet/extranet uses Internet protocols, direct ordering can be facilitated in just the same way as on the World Wide Web.

Database Publishing
Database publishing is using information within a company (perhaps on an intranet) in the most efficient way for all the company’s publishing requirements. In many instances this will involve taking the same core information and presenting it in a number of different ways. So, for example, a company’s full list of products might be held on a central catalogue on its Web site; the same information might then be customized to present a specific view of it for individual customers depending on their buying patterns. Equally, a CD-ROM might be produced, perhaps with a subset of the catalogue, and mailed to those customers who do not have access to the Internet. The important thing is that when any core information changes anywhere in the company, the changes are reflected in any published version of the data.

Workflow is a methodology that organizes the tasks, procedural steps, people, information, and tools for a particular business process. There are now many workflow automation software packages that enable a company to manage the completion of a project or process. A bank, for example, may use a workflow application to make sure that an application form for a mortgage is handled in a structured way, passing through a number of clearly identified stages from the initial enquiry through to final agreement of the loan. Each person involved in processing the application would be monitored by the workflow software to ensure that their part of the operation had been properly carried out before the process was allowed to proceed to the next employee and their task.
As workflow is about using information technology to manage business processes, it is also about improving business processes and, like EDI, it calls for the reorganization of the business using business process redesign

Supply Chain E-commerce
Good supply chain management is essential for a successful company. Effective management of the supply chain keeps costs down. This is primarily achieved by ensuring that communication can flow freely along the chain. This is where the use of the Internet and E-commerce comes in.
The importance of managing the physical supply chain effectively is highlighted by a report by Forrester Research. This report concludes that distribution is likely to become a major problem for companies selling online. Those companies who cannot deliver quickly are going to suffer customer defections and declining revenues. Issues such as returns and transport charges will need to be addressed, while the expectations of the customer in terms of quicker delivery times will have to be matched by a more efficient and flexible supply chain. Supply chain E-commerce uses various techniques to improve the delivery of goods between suppliers and their customers. Typical supply chain applications include:
• stock control;
• just-in-time delivery;
• transportation;
• Warehouse management.
An underlying technology of all of these is automatic identification, which is achieved primarily through the use of bar-coding.
Stock Control
Retail outlets, such as supermarkets, are big users of E-commerce, using it to manage stock levels and re-order goods from their suppliers. Every time the barcode on any one of the wide range of stock items held is swiped, this is logged by the stock management system which, when the critical number is reached, will automatically order new goods. The order will generally be batched and sent electronically to be automatically processed by the ordering system of the supplier. Not only does this mean that all goods are kept as fresh as possible, but it means that stock levels are minimized and warehousing space is optimized. It is also now possible for suppliers and the retail outlets to share forecasting information about seasonal variations in the popularity of certain items. This helps them to predict when an extra large order of, say, ice cream would be needed. Forecasting information is an example of how specialist information drawn from sales records can be exchanged using EDI.
Just-In-Time (JIT)
Just-In-Time (JIT) ordering is now common in a range of business sectors, such as the automotive industry. Just as a retail outlet only wants to stock up with new goods as it needs them, so too a manufacturing concern will only want to have parts delivered as they are required. Ecommerce enables companies to:
• keep their stock levels down thereby minimizing the amount of capital tied up on the shelves;
• minimize the amount of (often very expensive) warehousing needed;
• work to shorter lead times;
• as a result of the above, lower the costs of the manufactured goods;
• Improve the relationship between the supplier and the customer.
When customers (such as retail outlets) order goods from suppliers there is obviously a requirement to arrange delivery of the goods between the two points in the supply chain. This can also be organized via Ecommerce. EDI messages have been designed specifically for this purpose but, increasingly, the Internet is also being used in this context. In particular, companies such as Fedex can allow customers to view the delivery status of their order via a password-protected area of their Web site. Remember, though, that E-commerce is not just about ordering and supplying goods – it is about improving business processes. In the case of transportation knowing what goods are arriving in what order can mean that warehousing, subsequent transportation, transfer between different transportation systems (such as sea-to-road-to-rail) and eventual delivery and stacking can be made more efficient. It may also be important to know about specific aspects of goods that are to be transported, for example are there frozen goods or hazardous cargoes to be handled? Knowing this information in advance can enable the freight company to make the appropriate transport plans. All of the information required to plan the necessary transport facilities can be transmitted electronically.

Warehouse Management
The same types of benefit are equally applicable to warehouse management. The aim is to minimize the amount of warehousing needed and to make delivery into and out of the warehouse as efficient as is possible. Having electronically updated database records of the stock in a warehouse enables a company to share information on availability of goods.

Automatic Identification
A common underlying technology for all supply chain E-commerce is Automatic Identification (AI).

Barcodes contain a unique identifying number that can be read by a machine scanning a series of printed bars of differing thickness. They are not just used on retail goods, but also on packing cartons and crates – each enabling transportation companies to report where goods are in the system, and warehouses and retailers to manage stock levels. The unique number is used to call up information on the product/shipment from a database, and can be used for ordering goods as well as monitoring stock levels. It is no coincidence that the UK body responsible for administering barcodes (the Article Number Association) was also responsible for the UK’s EDI standard, TRADACOMS.

Although AI is commonly associated with the barcode there are other useful tools in this category. One is the transponder, which is a very small signal transmitter that has been used widely to monitor transportation of goods in the United States. Like the barcode, each has a unique identifying number. Although to be ‘read’ the transponder must pass a receiver that will pick up its electronic signal. US railway companies use transponders to identify containers and rolling stock, monitoring their whereabouts via a network of strategically place receivers along railway lines.
Next week: Ecommerce terminology