Supply Chain Management and E-Commerce System

The main agenda of the essay is to determine what web services and how they helping organizations in doing e-business which is nothing but conducting business operations online. According to the research, web services are information services that are conducted over the Internet so that organizations that share information within and outside the organization regardless of difference in databases, software and hardware since all the information is on the Internet.

Web services are different from the traditional data interchange systems in certain ways however both help to exchange information across organizations to streamline the supply chain. There are many technologies that help to integrated applications in an e-business setup and some of them include the Oracle’s suite and Glue Technology’s suite. Such systems help to benefit the whole supply chain rather than just one member of the chain.

However, integration does not come without problems. There are certain issues with integration of e-business using Web Service such as security problems, high bandwidth utilization, and scalability and performance optimization. Introduction to Web Services: Due to competition, increasing costs and globalization, more and more companies are trying to use technology to make their businesses more efficient.

The Internet is being used to change the way back-end operations are done including product design, product development, procurement of raw materials, production of products, inventory of both raw materials and finished goods, distribution of finished goods and services, after-sales service support, and marketing and helps to develop new supply networks and business models. Web services are automated information services which are conducted over the Internet, using standard technologies and protocols that simplify the way large amount of information is exchanged over the Internet.

They simplify how work is conducted across organizations regardless of the types of operating systems, hardware and software, programming languages, and databases that are used by different organizations. (United States Environmental Protection Agency) Common example of web services is the Google Web Service and Amazon Web Service Web services allow companies to link itself to its partners, customers and suppliers. Web services allow companies to share information outside organization and also within the organization.

For example, a company can use web services to use information of its suppliers as if it is its own. Moreover, the company can also use web services to share information within organization so that change in information in one part of the organization is reflected in the entire organization. The traditional data interchange approach such as the Electronic Data Interchange is used to exchange documents between two trading partners.

For example, if a firm has to buy ten laptops, it generates purchase order which are then sent electronically to the supplier and that is what EDI does. On the other hand, if a firm uses web services and it wants to buy ten laptops, it can generate electronic purchase order and also update the company’s expense and accounts payable account which the EDI cannot do. Difference between EDI and Web Services: Traditional data interchange systems such as EDI are very expensive to set up but web services are cheaper compared to the traditional data interchange systems.

The other difference between the traditional electronic data interchange and web services it that data interchange is mainly on private networks whereas the web services is on the Internet. Moreover, the traditional systems have their own formats whereas the information on web services is based on XML. (Brunner, 2002) Furthermore, EDI required that the two business partners that will share information must have an agreement to do so however, web services does not require both partners to come into an agreement.

(developer. com) Today, almost everyone has access to the Internet and therefore, this network can be used to improve business transactions and for that to happen, major vendors have come together and accepted one standard and that is Web Services which is based on open standards that acts as a platform to provide a uniform and widely accessible dynamic interface to conduct business operations.

Web services allow companies to link in real-time with their trading partners or suppliers and help in automating the internal purchasing process starting from product requisition till the payment to the supplier which helps to reduce the operational costs and increase efficiency. The web services also allow companies to practice mass customization which without the Internet will be extremely costly. For example, Dell sells laptops over the Internet to businesses and individuals.

If a business customer wants to order 100 laptops, it can customize the specification of the laptop according to its needs and requirements and this practice reduces cost for Dell and also keeps the customer satisfied. E-business Applications using Web Services: An organization needs sales data from its sales management system which is used for demand forecasting and this forecast is used by manufacturing department to determine how much needs to be produced and what quantity of raw materials is needed.

All this information resides in different systems which are built on different platforms so web services enables this data to be displayed on a platform independent application. This is very useful all the more as organizations are becoming global. Organizations that have operations in more than one country will need information from all parts of the organization regardless of the geography and web services will allow people in the company to access information on the Internet regardless of the platform used by other sites of the organization located in different parts of the world.

The use of web services does not just end inside the organization; it extends to other members in the supply chain. The sales data and demand forecast of retailer is needed by distributor to determine the optimum inventory level for itself. The distributor’s demand forecast and sales data is required by manufacturing to determine how much to produce and web services enables companies to do this in real-time and with accuracy.

When companies start sharing their data with other members in the supply chain, it helps to create accurate demand forecast for the entire chain so that buffer stock at each level of the supply chain can be reduced and the overall cost of the value chain can decrease. One of the e-business application using web services is an access of an e-commerce website to a buyer’s credit card information, shipping information so that a date can be determined for shipping the goods.

The seller can use a web service that processes insurance claims for the goods that are sold to the buyer. Moreover, the purchasing of raw materials or components from suppliers can also be done using Web Services whereby the manufacturer can order and then the supplier can deliver it on time so that the whole supply chain can be improved. Example of e-business application utilizing Web services can also include getting quotes from suppliers.

For example, a manufacturer requires some raw material for the very first time so it can put it on its web site and suppliers can access its web site and then submit their quotes and then the manufacturer can choose a supplier depending on the criteria it has set and then supplier can be contacted using web services and an order can be placed with the supplier using the web services and the whole order can be monitored until the delivery of raw materials has been done and payment has been made to the supplier.

This not only automates the process and reduce cost but also allows the company to reach larger number of suppliers than it could have done using the traditional method of contacting a supplier.