B2B Versus B2C Supply Chains


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` Have you ever wondered how all those products that you buy everyday get to those stores or how that website is able to ship you what you want? Have you ever wondered how all those companies have those products ready and waiting for you? Well I can tell you that they just don't appear out of nowhere! Businesses use what is called a supply chain to make it possible for them to provide the consumers with the products they desire and need. What exactly is a supply chain and how does it ensure that everyone gets what they need? In this paper we will define a supply chain and also take a look at business to business supply chains and business to consumer supply chains and see how they differ and how they are alike.
Investopedia.com defines a supply chain as follows: "Supply chains include every company that comes into contact with a particular product. For example, the supply chain for most products will encompass all the companies manufacturing parts for the product, assembling it, delivering it and selling it." (www.investopedia.com)
There are many different kinds of products and services out there that supply consumers with the things they need or want but they all have one thing in common and that is that they use a supply chain to make this possible. There are two main kinds of supply chains today and they are called business to business supply chains and business to consumer supply chains. Business to Business supply chains will be referred to as B2B, and Business to Consumer as B2C in this paper. The major difference between B2B and B2C supply chains is the amount of channels that a product travels through before reaching the end user. B2B supply chains have less channels overall and are larger in size whereas B2C supply chains have a larger amount of smaller channels overall.
In order to understand how the two work it is important to understand the process a business will go through to reach a specific outcome. For example, if you look at a bicycle manufacturer who needs to purchase wheels for their product, there are only a few channels involved. They would go directly to a tire manufacturer and obtain the needed parts. (www.toolsgroup.com) A simple example of a B2B supply chain would be: The bicycle manufacturer -> the tire manufacturer -> the raw supplies dealers.

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In the B2B example, the bicycle manufacturer must coordinate with the tire manufacturer to ensure proper communication takes place concerning how many orders will be placed in a specific time frame. Furthermore they must keep record of the tires received and any amounts billed. All these details can be taken care of with integration. (www.toolsgroup.com)
In a B2C supply chain you may have a consumer who wishes to purchase a bicycle from a retail supplier. In this scenario there would be a lot more channels involved than in the B2B example. Not only would all the components involved in the B2B supply chain exist, but there would be additional components including the human factor. An example of the B2C supply chain may be: Customer –>store employees –> cashier –> local store –> bicycle manufacturer –> bicycle parts manufacturers -> raw supplies dealers. This example of a B2C supply chain is a little more involved than the B2B example above because there are more channels involved in getting the final product to the consumer.
Technology and integration is another difference that we should take into consideration when comparing B2B supply chains and B2C supply chains. In B2B supply chains companies must be careful to include their business partners into the software so that ensure that there is a smooth transition when it comes to billing, reordering, etc. In the B2B example, the bicycle manufacturer must coordinate with the tire manufacturer to ensure proper communication takes place concerning how many orders will be placed in a specific time frame. Furthermore they must keep record of the tires received and any amounts billed. All these details can be taken care of with integration. (www.toolsgroup.com)
Integration is not as important in B2C supply chains because this is probably the only transaction involving the consumer and the bike. B2C supply chains can be looked at as a one way supply chain with money flowing to the business that provides the service to the consumer. The B2B supply chain is more of a two way supply chain that consists of feedback, interchanging of products, information, data, money, etc.
Organizations everywhere are striving to flourish in the best way possible. Having an efficiently managed supply chain can provide amazing benefits for your company. By improving the supply chain, companies will have a better understanding of the processes that take place prior to completing the final product. Also companies will be better able to run the other aspects of their business more smoothly, because an improved supply chain will simplify many other areas of the business.

Reference
www.toolsgroup.com
www.investopedia.com


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