Foundations of B2B eCommerce Supply Chain Management

Reevaluating your eCommerce supply chain solution for agility, scalability, and faster time to market efficiencies
The Importance of Planning, Sourcing, Inventory, and Transportation for SCM

The Base of Successful B2B eCommerce

Supply chain management refers to the total production and distribution of products to customers, from raw materials to delivery and returns. Whereas several years ago, these activities were taking place without too much thought into the actual deed. With the development of eCommerce and competition, these activities had to be refined to help businesses make a difference in the way they operate and promote growth. This article looks into the development of eCommerce supply chain management to what it stands for today, focusing on the business-to-business eCommerce model (B2B eCommerce).

A word that is inseparably connected to supply chain management is efficiency. Since time is a valuable resource in the business world, supply chain management is trying to save as much time as possible from the activities related to the supply chain of products, from start to finish, saving (or making) money along the process. When it comes to B2B eCommerce supply chains, where businesses are supplying products to other companies, competition can be high, especially in sectors such as manufacturing and distribution or marketplaces. On such occasions, the supply chain can include all activities, from planning and designing products, enterprise procurement of raw materials, creating the product, storing, monetary transaction realization, distribution to the correct customer, handling of returns and complaints, and even aftersales policy. With the rapid development of eCommerce, hence the competition, supply chain management became "a thing" and gained extreme importance regarding the efficiency of transaction realization and product delivery that led to business success.

Foundations of B2B eCommerce Supply Chain Management

Back in the day, the supply chain was based on local contacts—national at most—as businesses engaged in local activities with known business partners. Especially for big companies with no high competition, the supply chain was not critical, as they did not have much to lose. With globalization and the rapid development of eCommerce, local business monopolies lost their market power to competitors who could deliver the same –or better– product faster and cheaper. This led to a switch in operations, focusing on identifying areas of improvement and streamlining the procedure followed from order to delivery. In other words, SCM, in short, B2B supply chain management, became a very well-used term in business vocabulary and a game-changer for those who invested in it as a means to take their business to the next level.

Globalization and eCommerce development did not only lead to the realization of SCM importance for business success, but also to the realization that SCM might not be a "personal" issue for a company, with every stage being realized in-house but a collection of several companies, each responsible for a different stage of the supply chain, working together towards a common goal. For that B2B supply chain to be successful, all parties involved must be in sync, which can happen using online tools of communication and better digital processes.

Foundations of B2B eCommerce Supply Chain Management

The majority of companies today outsource parts of SCM for B2B procurement, either because they do not have the facilities or capacity for certain activities or because it is more efficient to outsource on certain occasions. That leads to a cohort of suppliers, manufacturers, distributors, marketing and advertising experts, and finance experts handling certain parts of the supply chain for a specific product or project on behalf of the "main" business contractor. A successful supply chain always starts with adequate planning. Identifying all the necessary stages and where external support is needed, conducting thorough market research for specific activities and products, trying to foresee demand, exploring "what if" scenarios, and creating a bulletproof strategy is always a good plan. The second essential step is sourcing. Collating a list of potential suppliers or service providers for specific actions, liaising with them, and creating relationships based on mutual trust is one way to go.

Another is the use of suppliers ad-hoc, based on availability and pricing. In both cases, communication is critical, as it can make or break the relationship and potentially result in huge losses due to missed deadlines or inadequate product quality. Equally crucial to planning and sourcing is inventory check, as either too low or too high an inventory can create problems in a business. Inventory should be monitored and checked against projected demands and factors that could affect supply chain management, such as national or international disasters or emergencies (COVID-19 serves as a great example here). Last but not least, transportation is a common bottleneck in B2B eCommerce SCM, as it is a key "middle" process between suppliers, distributors, retailers, or even end-users, so miscommunication with regards to transportation activities can be devastating, leading to easily avoidable delays, hence added cost. These four areas are significant under the umbrella of SCM logistics and require close monitoring and adequate communication and flow of relevant available information.


The Biggest Advantages of Integrated B2B eCommerce SCM

As briefly touched earlier, communication is vital among different stages and stakeholders of SCM logistics. Although each stage or stakeholder can be a separate entity with separate issues to take care of, collectively, they form a coherent B2B eCommerce SCM system, which should behave as a fine-tuned instrument under the touch of an expert instrument player, if we are looking for the sound of music and not the sound of disaster. To achieve this goal and create an SCM system that leads to efficient project deliveries, enterprise resource planning, or ERP integration with B2B sourcing is an advisable strategy. ERP SCM integration refers to automation and synchronization of information availability and processing, overcoming bureaucratic barriers that can cause delays or mistakes. This can lead to streamlined operation, visibility of relevant resources and information from different integrated SCM partners, and reassurance that every associated party is on the same page, literally and metaphorically speaking. ERP SCM integration can massively improve SCM's efficiency by reducing time and resources needed for communication across different parties, minimizing the possibility of misunderstandings or wrong information being shared, and providing space for transparency. Operating costs and response time can be reduced, leading to more space for growth, both for individual stakeholders of a supply chain and for the cohort of collaborators.

Are There Any Issues to Be Aware of When It Comes to B2B eCommerce SCM Integration?

Yes, there are! An essential issue is a miscommunication. When it comes to integration, miscommunication refers to problems with the software used by different parties and how different software can "talk" to each other and make sure each party has accurate information at every moment. ERP SCM integration can be straightforward or tricky, depending on each party's pre-existing software and data logging system. For example, moving data to an online platform from an offline state can take a long time and require many resources. Another issue usually faced in supply chains that could also be faced if integration is not done correctly is the lack of 100% data visibility from one stage to another or even within the same part of the chain. This could lead to delays, mistakes, and subsequently increased cost and operational time. If management software used by different stakeholders is not compatible with one another, using a "helper" software could facilitate data visibility and result in better communication.

Raising B2B eCommerce SCM to the Next Level

An optimized B2B eCommerce supply chain can lead to reduced operating time and costs. Still, it can also increase sales and profitability, goals always pursued by any business. An optimized SCM and properly integrated with ERP can increase the transparency of operations. Besides the obvious advantages of reduced response time and resource usage, it can offer a much better eCommerce experience, both from the front and back end. Building and maintaining an eCommerce platform under a successful ERO SCM integration can be much easier. Still, it also means that clients can have a better idea of the real-time availability of products offered, their shipping times and associated cost, or the ability for order customization. Improving business logic and workflow within the supply chain can move a company's B2B eCommerce to the next level and help achieve targets and goals that could have been perceived as unattainable.