Adrian Leal

ITS 380


Chapter 12


Case Study


1.      If you were a small chemical company, what concerns would you have about joining Elemica?

Elemica would be a great solution for a small company that is trying to gather the necessary information of its supply chain. However, letting a provider to take track of it, can mean that some delays and misunderstanding will be more likely to happen since the company does not have direct contact with the other business in this case.


2.      Elemica provides a community for participants where they can transact, coordinate, and cooperate to produce products for less. Yet these firms also compete with one another when they sell chemicals to end-user firms in the automobile, airline, and manufacturing industries. How is this possible?

Chemicals companies have been selling to each other for many years. Apparently they sell their chemicals surpluses or other products to different companies. With Elemica they have found a neutral supplier where they can buy the necessaries raw materials.


3.      Review the concept of private industrial networks and describe how Elenica illustrates many of the features of such a network. In what ways is it different from a private industrial network?

Private industrial networks are web sites networks that manage the interactions between different members and companies, connecting them to each other. In the case of Elenica, some companies that try to coordinate the activities of the industry own it.




1.      Explain the differences between total B2B commerce and B2B e-commerce.

Before the Internet existed, companies had to buy their products without using the Internet. B2B commerce was the different transactions that were made between businesses to obtain these needed materials to produce their businesses. Today, with the modernization and increase of the use of technology, this action takes part on the Internet, where companies connect with each other online. These transactions are called B2B e-commerce


5.      Name and describe two methods of purchasing goods.

Two methods of purchasing products are contract purchases and spot purchases. Contract purchases are long-term agreements in which the company receives the supplies needed during the accorded period with the supplier. Spot purchases are one-time purchases that meet the immediate necessities of the company.


10. Identify and briefly explain the anticompetitive possibilities inherent in Net marketplace.

- The possibility that they may provide some firms with an ideal platform to collude on pricing, market sharing, and market access.

- The sharing of information in order to reach market-sharing agreements in which they divide the market up into segments and agree to produce only enough for their allocated segment.

- The coordination of a reduction in purchases, forcing the suppliers to sell their inputs below market prices.

- The restriction of market access if large industry players exclude smaller rivals, thus forcing them to pay higher prices for their inputs.


15. What are the barriers to the complete implementation of private industrial networks?

One of the barriers is the necessity or the obligation to share confidential data with competitors and members of the private network. Other barriers are the complications of integrating ERP systems and EPI networks to private industrial networks


20. What is a cloud-based B2B platform and what advantages does it offer.

Cloud computing is taking services ("cloud services") and moving them outside an organizations firewall on shared systems. Applications and services are accessed via the Web, instead of your hard drive. Some of the advantages that this offer to a company includes reduce IT costs and simplifying the company’s IT infrastructure



Case Study


2.      Examine the website of one of the e-distributors listed in Figure 12.9, and compare and contrast it to one of the Web sites listed for e-procurement Net marketplaces. If you were a business manager of a medium-sized firm, how would you decide where to purchase your indirect inputs – from an e-distributor or an e-procurement Net marketplace? Write a short report detailing your analysis. (e-distributor) vs. Ariba’s Ariba Supplier Network (e-procurement)

E-distributors are the most common type of electronic marketplace; they sell products on an "as needed" basis. efficiently organizes goods from more than one source for potential buyers. E-distributors such as offer a reasonable compromise between price and service, and provide the convenience of one-stop shopping for a wide range of products from processed materials to finished goods. This is especially valuable to customers in the MRO or office supplies market. Buyers like placing one order, tracking one order, and having only one invoice to pay.

E-procurement companies are typically used for long-term contractual purchasing of indirect goods. They expand on the business model of e-distributors by including the online catalogs of their suppliers and value chain management services. Ariba’s Ariba Supplier Network encourages new levels of communication and collaboration between buyers and suppliers. An e-procurement system automates and streamlines the purchasing process by eliminating managers and multiple orders while reducing the cost of processing an order.  For a medium-sized company, the advantages of an e-procurement system allow the company to control expenses on indirect goods as well as direct goods. This gives companies more control over the bottom line. However, if a company does not want to make an expensive investment into an e-procurement or get locked into one e-procurement system, then e-distributors are another way companies can make their indirect purchases less expensive and more streamlined.