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Online Auto Industry B2B Electronic Commerce. Nadia-Shazrin Asari Christopher Butsko Joseph Carlen Ljubomir Cvetkovic Kevin Daily. Overview of Auto Industry. The traditional supply chain of business-to-business transactions in the auto industry is costly Dealer commissions

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online auto industry b2b electronic commerce

Online Auto IndustryB2B Electronic Commerce

Nadia-Shazrin Asari

Christopher Butsko

Joseph Carlen

Ljubomir Cvetkovic

Kevin Daily

overview of auto industry
Overview of Auto Industry
  • The traditional supply chain of business-to-business transactions in the auto industry is costly
    • Dealer commissions
    • Other intermediary costs
  • By automating supplier order-entry processes, a $71/vehicle supply change can be removed
  • This can result in a $1.0 billion savings opportunity per year! (Source: AutoChain Online)
  • Dealerships
    • Dealers can trade among themselves to get rid of large inventory and increase other items low in inventory
  • OEM’s (Original Equipment Manufacturer)
    • E.g. Ford, GM, Chrysler-Daimler
  • Suppliers
value added suppliers oem s
Value – Added (Suppliers & OEM’s)
  • Auctions
    • Get the best price for both selling and buying
    • Introduction to new partnerships
  • Streamline inventory and transaction process

“there … exists an opportunity to remove $71 of supply chain waste per vehicle by automating supplier order-entry processes…This waste represents over $1.0 Billion savings…”

value added dealerships
Value Added - Dealerships
  • Dealer – to – Dealer Trading
    • Overstocked dealers can trade with under stocked dealers
    • Both parties benefit by having better inventory turn-around
major players
Major Players
  • Auto Exchange –
    • “e-business for the auto business”
    • Besides being an online exchange between auto manufacturers and suppliers, the site facilitates collaboration on supply chain management, product design, and international marketing.
  • General Motors –
    • This automotive giant’s online procurement facility is still under construction. However, analysts expect it to be the largest player
    • Moving towards becoming a portal for online automotive procurement
major players cont d
Major Players (cont’d)
  • Ford –
    • The pioneer of automobiles has already developed an online interface between the company and its suppliers.
    • Proprietary application for Ford
  • BBCN –
    • Although its e-procurement functionality is not restricted to the automotive industry, it has demonstrated significant utility for online automotive procurement:
      • “A dealer can go on-line for supplies and receive bids from suppliers all over the country. It really makes the entire process so much easier!" John Anderson - Owner of the #1 Chevrolet Dealer in California
reasons for current dominance
Reasons for current dominance
  • General Motors and Ford – Due to their tremendous purchasing power, technological prowess, high profile, experience, extensive supplier relationships, speed, and global presence, they have an obvious advantage over newer and less established online initiatives.
  • BBCN – As a large “hub” for e-procurement activity, BBCN is able to leverage the e-commerce expertise of partnered firms such as Cisco with the industry-specific strengths of large automotive manufacturers and suppliers.
business processes
Business Processes
  • General Process (summarized from all 4 websites, since registration required us to take legal responsibility):
    • A buyer must be registered with the website
    • A supplier is usually considered a partner of the website
    • A buyer searches for an auto part or vehicle that he needs
    • Query results will display the information of the product
      • If the site is an auction site, the suppliers will send their bid to the buyer, and the buyer will choose the winner.
      • If the site is a regular trading site, buyer chooses the supplier to purchase from, and an order will be fulfilled.
    • The buyer will be allowed to view his order history at the website
business processes cont d
Business Processes (cont’d)
  • Registration process at
    • User must go through 5 steps before they are allowed to use the website (trade, search, manage account)
  • e-Procurement process in
    • Buyer submits a procurement inquiry (PI)
    • Product available is listed, by Supplier
    • Supplier sends a bid to Buyer
    • Buyer chooses which Supplier to purchase from
    • All other Suppliers are notified that the purchase is complete
business processes cont d11
Business Processes (cont’d)
  • Requisition management at

Search options




Line item count & Total

  • Most sites require the buyers/suppliers to be registered first before
  • allowing them to use the website
from one time to repeat customer
From One-time to Repeat Customer
  • Offer personalized features such Auto-xchange’s “MyExchange”
    • Maintain a to-do list
    • Check order and auction activity
    • Edit personal profile
    • Maintain address book
  • Offer customized purchasing capabilities for each user (TradeXchange)
    • Enforce buyer’s procurement rules and pricing
  • Broadcast email (Autochain Online)
    • Suppliers and customers communicate directly regarding news
      • Is plant closing for holiday?
      • Is supplier hosting a supplier conference?
improving online strategies
Improving Online Strategies
  • Sites such as Autochain must provide more information available before registration
    • How many suppliers?
    • Who are suppliers?
    • What are benefits to suppliers and buyers?
    • Search feature to assure specific item is available
  • Include demo of how auction works
  • Provide online community
    • Chat rooms to discuss products, hot items
    • Online support and feedback sections
improving online strategies cont d
Improving Online Strategies (cont’d)
  • Send email to buyers about upcoming items to be auctioned off
    • Based on buyer’s preferences
    • Buyer no longer goes through time-consuming searches
  • Include industry news, events, and statistics
    • Become one-stop shop for buyers and suppliers
final comparison of sites
Final Comparison of Sites
  • The Good
    • GM’s TradeXchange
      • Has more personalized/customized sections regarding account information, items you have bid on, etc.
    • Ford’s Direct Data Link
      • Nice organization of products, lots of online support
      • Breaks auction down into categories, then into further sub-categories, making products easy to find
  • The Bad
    • Auto-xchange
      • Must be a member to get even background information about what the site offers; user-friendly interface though
  • The Ugly
    • Autochain Online
      • Must be a member to get even background information about what the site offers; user-interface poor