Tools And Techniques

Running head: B2B VS. B2C SUPPLY CHAIN

Supply Chains Comparison

David Miranda

BUS/400

Thomas Jerdon

August 28, 2006

Supply Chains

Introduction

In previous decades brick and mortar companies were the rulers of business everywhere in the world. Companies all around the world conducted business with each other and consumers with what we now would consider "the long way." Shopping for something would mean that a consumer would have to physically go into a retail store and shop. For businesses, to make purchases it would mean having to use a snail mail catalogue or to place an order over the phone. The internet has now made it possible for companies and consumers alike to shop for materials and goods from a computer anywhere in the world. The internet has allowed for eBusiness or eCommerce to rise have become a preferred method of business for many companies and consumers. Business to Consumer (B2C) and Business to Business (B2B) commerce serve different customers and both have a different supply chain.

Supply Chain

According to Schnider, G.P. (2004), the part of an industry value chain that precedes a particular strategic business unit is often called a supply chain. A company's supply chain for a specific product begins with the suppliers of the raw materials and includes every single component necessary to make the final product. An example of a supply chain for Sanyo, which is the manufacturer of the Sanyo Katana, a cellular phone used by Sprint Nextel would be that Sanyo receives electronic parts from Qualcomm to work on Code Division Multiple Access (CDMA) technology. Qualcomm also has suppliers that provide electronic pieces to complete the cellular phone's electronic components. Plastics for the phone cases are purchased from other suppliers. Finally, the finished product is shipped to Sanyo Distribution Warehouse in Japan. From Japan, the products are shipped to the Sprint Nextel warehouse in Reston, Virginia. From there, direct retailers of Sprint receive their shipment to their doors and indirect retailers such as RadioShack receive them at the RadioShack warehouse. The RadioShack warehouse will be in charge of distributing them to its doors for selling.

Business to Business

B2B commerce takes place with two or more organizations or trading partners. The amounts traded are usually higher in volume as opposed to B2C. An example of a B2B transaction in my organization (Sprint Nextel) would be where Sprint sells PCS and or mobile broadband service to Midas Brakes. In my organization, in order for a transaction to be considered B2B there has to be at least five lines of service. The supply chain for B2B would also be different than a business to consumer. One of the differences would be that the company making the purchase would not have to go to a retailer to make the final purchase. The seller would ship the large quantity to the buyer directly. The packaging would be more than likely delivered in boxes as opposed to individual packages in B2C.

Business to Consumer

B2C commerce takes place between a company or "business" that sells and markets products directly to consumers. The quantities for business to consumer sales are substantially less than those involved in B2B. B2C commerce initially took place with brick and mortar companies and now, thanks to the internet, consumers can shop for products from online stores as well. Some consumers that do not make their purchases online use companies' websites to establish research on their desired product before heading into the retail store. There are specific segments of a B2C supply chain for example a customer wants the latest Britney Spears CD. The customer buys the CD at Best Buy, the local Best Buy retailer received the CD in their shipment that arrived from its warehouse, the warehouse received the CD from a music distributor such as BMG, BMG receives the finished CD in bulk from the record label, and the record label got the CD printed from a professional music disc printer which in turn also has many other segments for supplies necessary to arrive at a final product.

B2C vs. B2B supply chain

When operating a supply chain for either B2C or B2B it is necessary to always implement good management (http://logistics.about.com/od/supplychainmgmt/). Schnider, G.P. (2004) found that clear communications and quick responses to those communications are key to the success of any supply chain. According