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Systems, and aligning the engineering processes
towards a Virtual Environment. Professor Segall
has designed and conducted training on a wide
variety of process improvement topics as well as
lecturing at local universities. In the MMM
program, Professor Segall teaches the course on
Product Design and the Concurrent Engineering
Environment.
MMM, McGill University 6 Newsletter, September – October 2000
SCM CONFERENCE: E-COMMERCE
On Friday, September 29, 2000, the MMM program
and the Management Sciences Research Centre
(MSRC) hosted their annual SCM Conference. This
year the topic was the Impact of E-Commerce.
The first speaker was Scott Dorion, President of SD
Consulting, who provided an interesting overview
of B2B e-marketplaces/portals, a new crop of.
Intermediaries. B2B portals are e-market makers. An
e-market maker develops a B2B, Internet-based emarketplace
of buyers and sellers within a particular
industry, geographic region, or affinity groups. They
offer a combination of mechanisms to facilitate
transactions. They can be either horizontal or vertical.
Some statistics provide an idea of their magnitude: a
10% adoption rate by 2003 implies $1.8 trillion USD
in B2B commerce value; 30-40% of B2B commerce
transactions will be facilitated by Internet
marketplaces. The primary challenge will be one of
creating revenue. He predicted the continued
evolution of networked B2B portals and he
maintained that e-commerce will follow the pattern
of traditional commerce where B2B transactions
outweigh business to customer transactions by a
factor of eight to ten.
Claude Gobeil of JD Edwards took the audience
through E-business step by step. He stated that
manual transactions average $150 each whereas in a
virtual company, with complete order-to-fulfillment
integration, the cost is only $10. With E-business a
company should realize lower purchasing costs,
reductions in inventory, reduced cycle times, more
efficient and effective customer service, reduced
sales and marketing costs, and a “new” sales channel.
Revenue increases will not be a result of getting new
customers but by collaborating with suppliers and the
supply chain. B2B is four times more than businessto-
consumer (B2C). There are five steps to
establishing E-business for a company: the initial
informational Web presence; business-to-employees
(B2E) on the Intranet; B2C with mini-storefronts on
the Internet; B2B and the Extranet; finally, the
Virtual Enterprise. Claude Gobeil’s final instructions
were not difficult: think virtual, integrated, seamless
and simple.
John Turtle of Oracle and David Poirier of the
Hudson’s Bay Company (HBC) made a
presentation on Transitioning to an E-Business. John
described some of the new business practices thanks
to the Internet: companies can go from local to global
markets; they can include customers and suppliers in
their internal focus; certain administrative tasks may
be reduced by implementing self-service user
interfaces; companies can make use of business
intelligence applications to manage transactions.
David Poirier, Executive VP and CIO of HBC,
provided a concrete example of the retail giant’s
current transformation. In the past, the Bay
continually went after sales without any
connectedness to the rest of the organization. The
Bay was product focused. Now there has been a
major shift towards a customer focus and managing
customer relationships. In order to launch HBC
Online and to become a retail showcase for North
America in the next 2 ½ years, the Bay formed an
alliance with Oracle, Microsoft and IBM. It intends
to build a lifetime value base by focusing on its
customers. Its guiding values are Serving,
Excellence, Integrity and Learning.
Matt Holland and Marc Gilbert of The Boston
Consulting Group spoke about Revolutionizing
the Supply Chain as it pertained to launching
COVISINT, the automotive exchange which includes
General Motors, Ford and DaimlerChrysler and
which is the largest B2B e-business ever. The focus
of their presentation centered on B2B requiring
commitment and collaboration. B2B online ordering
is growing rapidly: from 7% in 1998 to a projected
40% in 2003. Approximately 2/3 of buyers and
sellers are pursuing online collaboration. However,
online price negotiation lags online ordering. 80% of
online ordering requires offline negotiations. Despite
the fact that E-commerce is causing revolutionary
changes in the way business is conducted, Matt and
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