Big, You Can Be Your Own B2B Case Study

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Big, You Can Be Your Own B2B E-Marketplace

Advantages of developing own e-market place

Disadvantages of developing own e-market place

Vertical e-marketplaces

Horizontal e-market places

Drawbacks for crating two different marketplaces

Business intelligence in e-marketplaces

Business intelligence provided by iPad

Further business intelligence through iPad

Workflow management by iPad

Volkswagen operates its own proprietary B2B e-marketplaces in which its suppliers participate. What are the disadvantages to Volkswagen of not using a generic B2B e-marketplace with even more suppliers? What are the advantages to Volkswagen of developing and using its own proprietary B2B e-marketplace?

The companies with diverse requirements and large sizes often adopted innovative means to facilitate their supply chains. The supply chain management of large and small companies is managed differently according to the operational requirements. The businesses are also focused to seek competitive advantage through various means including the supply chain development. Procurement is also denoted as a significant operation to control cost of raw materials and supplies that are critical for business (Saprikis, 2013). The adoption of techniques e.g. reverse auction and e-procurement is also has significant benefits. However in certain cases like Volkswagen it is important to develop a unique technique to reduce time invested in procurement operations. The development of own B2B e-marketplace is also an example of these technology oriented developments. The advantages and disadvantages that are related to Volkswagen are discussed as following.

Advantages of developing own e-market place:

The advantages of developing an e-marketplace of own company can be identified in terms of time management and integration of processes that are involved in managing supply chain operations (Argoneto, & Renna, 2011). Similarly Volkswagen has achieved a significant reduction in time for managing its suppliers. The focused approach for suppliers has also facilities the suppliers to offer competitive prices and seek upcoming orders through a customizable dashboard. The business had to follow a seven stages process for placing orders as well as bargaining and delivery of the required components. The time consumed and additional cost of operating processes has also been reduced since the adoption of the own B2B e-marketplace. The company has also provided the facility to its suppliers and as result the less time consuming process also allows them to offer lower prices with improved delivery to Volkswagen facilities around the globe. The increase in business performance through cost reduction and better lead time to market products is also an advantage. Furthermore the business can also collaborate on upcoming models of Volkswagen with its suppliers is also an important advantage.

Disadvantages of developing own e-market place:

The disadvantages of own e-marketplaces includes a limited availability of suppliers and as a result the suppliers have to face lower competition as compared to the open for all B2B e-marketplaces. The suppliers are also confined to the company related ideas and as a result their ability to diversify their ideas and product development is also affected. The companies limit the number of users of these B2B e-marketplaces and as a result confined numbers of suppliers are attracted (Argoneto, et al., 2011). The cost of managing the whole e-marketplace is also a factor among all disadvantages. The business has to bear total cost of operating the integrated it enabled system and it cannot be divided over a large number of companies taking advantage of the infrastructure. Moreover the own B2B e-marketplace also has chances to operate in a limited scope only for Volkswagen therefore the innovation and diversification is also minimal.

Question 2:

When Volkswagen needs a new part design, it uses VWsupplygroup.com to get its suppliers involved in the design process early. This creates a tremendous amount of inter-organizational collaboration. What are the advantages to the suppliers and to Volkswagen in doing so?

Volkswagen is a geographically diverse organization and similarly it also caters a large target market in terms of its product categories. The innovations and further development of vehicle modes as well as the improvement activities in existing models is also taking place simultaneously. Since all the procurement and product development is also linked together the suppliers can take advantage of the advancements and developments taking place within the organization in real time. The advantages that are available for suppliers also include capability development and knowledge transfer through the research and development of Volkswagen's engineers.

There could be different scenarios including the requirements for parts improvement encouraging the suppliers to invest in development of parts that can facilitate quality improvement. Similarly in some cases the company engineers also provide their improved designs and suppliers are required to develop these parts using their manufacturing expertise.

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The continuous improvement in parts design and quality also helps the suppliers to enhance their knowledge and expertise. The sharing of information and knowledge through integrated supplier management system is beneficial for all the members.

The development process for new models and their research and development process are initiated well in advance. Therefore the suppliers can facilitate Volkswagen through developing significant changes in the parts required in order to gain a competitive advantage over other players in the market and it can help in opening a new avenue for their growth. Moreover they are aware of the changes taking place in the vehicle industry allowing them to align their production and manufacturing capabilities according to the market requirements. These changes are not limited to Volkswagen, they can also be offered to other vehicle manufacturers.

Volkswagen can also take advantage of supplier proposed changes and help in quality improvement as a result the amount of investment required for research and development is also an advantage for the company. The business is also likely to seek design changes through providing their requirements and requiring the suppliers to share their expertise in an inter-organizational network to help the manufacturer develop new components and increase quality of the existing parts. Volkswagen also takes advantage of cost reduction in terms of suppliers providing a viable part through their own knowledge and experience. The capacity of both suppliers and Volkswagen is increased at the same time.

Question 3:

How is Volkswagen's VWgroupsupply.com B2B e-marketplace an example of a vertical e-marketplace implementation? How is it an example of a horizontal e-marketplace implementation? Why is it necessary that Volkswagen combine both of these e-marketplaces into one e-marketplace? What would be the drawbacks to creating two different e-marketplaces one for suppliers of direct materials and one for suppliers of MRO material?

Vertical e-marketplaces:

The vertical e-marketplace is denoted as an internet enables automated platform that helps in integrating a transactional model for made-to-order products. The vertical e-marketplaces help the business in management of its supply chain elements. The strategic goals of supply chain are achieved through online sourcing solution. The cost reduction is also an advantage of the vertical e-marketplaces. Moreover the vertical e-marketplaces also help in developing a strategic relationship between suppliers and the buyers. The inventory management processes including the raw materials and finished goods is also improved through these initiatives (Bidgoli, 2004).

Horizontal e-market places:

The horizontal e-market places are significant in playing their role for customer related internet-based platforms. These marketplaces are also depicted as confinement to the pan-industry products. The value addition in services is also achieved through these supply chain models. The products and components that are critical for production within the industry are provided through horizontal e-marketplaces. The logistical services, payment services, and stationery products for the industry are provided through horizontal e-marketplaces. Most of the MRO products are offered through services of horizontal e-marketplaces. However in case of Volkswagen the combination of both is not required since the distribution of their products to final consumers is through dedicated display and distribution channels and their vehicles have a distinct consumer market. The nature of business and its products also has a great deal of relevance for integration of horizontal and vertical e-marketplaces (Bidgoli, 2004)..

Drawbacks for crating two different marketplaces:

The private e-marketplaces are also becoming popular among the large sized enterprises. They are developed through a combination of e-procurement and e-distribution supply chain management models. The private e-marketplaces are involved in delivery of products in accurate quantities at exact times to the right place. The companies having a large supplier and customer base develop these marketplaces to integrate their business process. They are helpful in reducing time and total cost of supplies procurement. The drawbacks of segregating two e-marketplaces including vertical and horizontal can be presented in terms of increasing cost and limited scope for providing and procuring the MRO supplies as well as specific products required for the business. The business objective of reducing cost through efficient supplier base management is also affected through segregation of the two e-marketplaces (Bidgoli, 2004).

Question 4:

To make effective purchasing decisions, Volkswagen's purchasing agents need business intelligence. What kind of business intelligence does iPad provide to purchasing agents for carrying out their tasks? What additional kinds of business intelligence not discussed in this case could Volkswagen's purchasing agents take advantage of to make more effective decisions?

Business intelligence in….....

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