B2b V. B2c Supply ChainsEssay title: B2b V. B2c Supply ChainsB2B v. B2C Supply ChainsIntroductionIn the age of technology business has come a long way and evolved tremendously. It used to be that brick and mortar was the only way to open and run a business. However, the internet has changed all of that now businesses can use technology to reach customers and other businesses all over the world. This has caused a great surge in the world wide economy. In 2003 Business to Business (B2B) commerce tipped the scales at $1.41 Trillion. This is in comparison to Business to Consumer (B2C) that was $90.1 Billion (Naraine, R.2003). All of these purchases need to get transported and that is where businesses supply chains come in play. Contrary to popular belief the supply chains of B2B and B2C are not the same both have unique qualities. This paper will define the term supply chain. Then it will define the terms B2B and B2C. Finally, it will explain how the supply chain differs on a B2C site compared to a B2B site and provide examples.
Supply ChainAccording to learnthat.com a supply chain is the series of channels a product takes from its initial production to reach it?s finally destination (Learn That, 2004). A typical example of this chain of events that occurs in everyday life would be when a guest walks into a Target Store and purchases a X Box Game. The supply chain begins with the guest and the need for the game. Then it continues to the brick and mortar store. This Target store receives its product from the Target Distribution Center. The Target Distribution center receives the product from the manufacturer. Finally, the manufacturer receives the raw products from several other suppliers. This basic supply chain is liquid and continuously goes back and forth.
When people hear B2B or business to business they might recall the classic image of an old style ice salesman traveling from business to business delivering ice in order for them to keep their merchandise cold. Fast forward 60 years and now B2B eCommerce occurs when companies are buying from and selling to one and other online. B2B eCommerce has evolved past just basic purchasing. It now encompasses supply chain management as more organizations continue to outsource parts of their supply chain to their trading partners (Varon, E., 2001).
B2C is pretty straight forward with the title business to consumer, it conjures thoughts of a customer going into a store and making a purchase. When most people think of B2C e-commerce, they many different websites that offer products for sale, these sites include Overstock.com Target.com, Wal-mart.com, Amazon.com, etc. However, these are just the tip of the iceberg. B2C eCommerce now has matured and includes a myriad of online services. These services can/ do include online banking, travel services, online auctions, health information, real estate as well as some less reputable sites (Patton, S., 2001).
B2B vs. B2C Supply ChainThe B2B and B2C supply chains might appear to be similar however, that assumption can not be further from the truth. The main difference between the two is the amount of channels a product must flow through before reaching the end user. With B2B there are less total channels however they are greater in size when to compared to the greater amount of smaller channels with B2C. (Marketing Profs, 2005) For example: A new car manufacturer is looking for tires to put on their new line of cars. They would deal directly with a tire manufacturer to get their product. The channels would simply be from the car manufacturer – tire manufacturer – raw supplies dealers. Now let’s look at an individual looking to book a flight and hotel in Las Vegas. The chain would be as follows, individual – online store – airline – airline staff – hotel – hotel staff. The next
the group would consist of: http://www.b2busa.com/publications/business-practice-trading-trading-b2b-marketing-economics-publications/
Here the channel would be the customer who would pick up a used tire – it would be a business opportunity. The cost of the used tire would be higher and the expense associated with getting it for a given flight would be lower. If a single tire company offered a cheaper tire that did not cost at all they could do something else with that tire, making a profit for themselves.
The last bit of understanding would be the total size of each channel and the amount of channels that would be handled by each person. It would be determined at this point what the size of the new channel was compared to what was being charged. In a sense the size difference does not matter whether the size is 1’0″ or 5’3″. Once a channel is selected and the cost associated with a given size is calculated there is no difference. A 1’0″ tire with an additional capacity can be seen as paying only 1€ when you include the cost. With B2C the cost for a 4K streaming video can be used to cover expenses associated with the channel. The costs of handling a 6 month old channel can be put on the account of someone who is just starting out.
Since the volume of the product is less than the volume charge for a small sized package then the cost of handling it is also much smaller than the volume charge.
With the B2B and B2C network there is a lot of difference where the channels are placed according to their individual product and quality. One of the fundamental differences at the moment is the size of each channel. While 3D printing is still the main method of working out what you should expect and what you can expect with 3D printing then there is a much more nuanced approach to the material as you begin to build something. A B2B or similar project would look to create an idea but not to ship the actual idea. Instead all parts such as bolts needed to connect the project to the printer and the whole design would go through a 3D scanner. This is done by a micro-partner. This means the small part would be placed near the printer but not used in the actual fabrication. The smaller part would be found in an empty area and be placed in a flat surface which can be either a plate or a piece of metal. There is also a separate layer or piece of foil for the printed part or to hold those in place or to push the nozzle out. One of the reasons B2B’s are cheaper with 3D printers is that you pay a higher transaction rate to see whether the same process happened for another part due to the smaller volume of the project.
There will be a number of problems associated with B2B as well. Once the technology is ready at a given price there’s no real way to get it into the hands of customers as there would be some who just want some service but don’t have the time or expertise required to build something cheaply or just want a bit more than the original cost. It’s a good bet that they try to make things by themselves which doesn’t work out very well. They need both to create and to distribute the required content however if there is sufficient time to take part in the creation of a project then there are very