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History of the Internet

In spite of what one presidential candidate says, he is not responsible for the Internet. The history of the Internet can be traced to the ARPANET (Advanced Research Agency Network). Pure research surrounded the entire history of the ARPANET. It got its start from the Advanced Re­search Projects Agency (ARPA). ARPA was formed in response to the Soviet Union's launch of Sputnik in 1957. It was not until the spring of 1967 at the University of Michigan, at an ARPA yearly meeting, that the topic of networking was brought up. The first use of the ARPANET took place in January 1970 when the four-node configuration was completed. The initial configuration included UCLA, University of Santa Barbara, Stanford Research Institute, and the University of Utah.1

It became a way for the academic community to communicate. It has been used for serious study and activities that might be considered frivo­lous. For example, it has been used at one university to check the inven­tory balance and temperature of cans of soda in a machine on another floor. As a result, you can now check on that soda from anywhere in the world This may have been the first use of the Internet to monitor point-of-sale transactions. If we can do that, we can do just about anything.

Pros

     Available: everyone who has a computer, a modem, and a phone
line can access the Internet and place an order.

     Flexible: there is no need for transaction sets. The functionality of
Internet transactions will be limited only by the ingenuity of the
user.

     Open: there is no need for trading partner relationships. Anyone can sign on the Internet and place an order.

     Order winner: today the Internet will become an order winner. If I
can check several suppliers online for price and availability, I will.
It is easier to do that than to call several vendors. I do not need a
salesman to tell us if they have it in stock. We have all been told at
one time or another, "Yes, we have it in stock and will ship it in 48
hours." Yet they did not have the material. Now, we can see the on-
hand balances for ourselves. Hopefully their inventory record ac­
curacy is better than 60 percent.

Cons

     Limited: users need to have easy access to the Internet. Many companies have no access or limited access to the Internet.

     Training will be required: each system may have its own protocols. Users will have to learn a new system for each vendor.

     Security: protection of data is still an issue. The vendor will need a firewall to protect their system from unauthorized access of data.
The customer must be limited to very narrow access. When credit
card purchases are made, the customer's credit information must
be protected.

CONDITION OF THE MARKET, OR WHERE ARE WE TODAY

Last Year

All right, let's start talking about the way things were in November of 1998. The primary connection between the Internet and ERP software was within the company. Sales and marketing individuals were given the ability to enter orders, to check the status of those orders, and, in some cases, to check on-hand inventory levels. Today there are some software packages that give the same functionality to customers of that firm through the Internet to the company's ERP software.

Business-to-Consumer (B2C)

Why is this element of E-commerce important? To understand why, we must understand the difference between business-to-consumer (B2C) E-commerce and business-to-business (B2B) E-commerce. In B2C the consumer is commonly moved to act by some activity of the business, a sale or a discount, rather than a need. The process is a leisurely one, often called shopping. The consumer is looking for something, but of­ten does not know what that is. B2C purchasing can be characterized as an unfocused activity. The experience is casual and leisurely. Both the physical process and the electronic process have the same attributes.

Business-to-Business (B2B)

Business-to-business shopping is substantially different from B2C shop­ping. In fact, we cannot really call it shopping. Shopping is really a social experience. We may and often do buy more than we planned. Recently I drove a friend to a mall with a nationally known department store to have a tire replaced. By the time I got out of the mall, I had two new pairs of pants and three new shirts. This is shopping. In B2B we know what we want. Rarely do we buy anything that we did not plan to purchase. Rarely do we respond to sales or discounts. B2B purchasing is characterized as a focused activity. In contrast to the leisurely B2C purchasing experience, B2B is an activity that the purchasing agents


 

want to accomplish as quickly as possible. For E-commerce to be suc­cessful, we have to understand these differences. When you sign on to a Web site, you do not want to be bombarded by a series of ads for products in which you have no interest. Also for E-commerce to be successful

1.        It must provide the customer with what they want.

2.   It must be easy to use. The system procedures must be easy enough that a degree in programming is not required.

3.        The system must not consume a buyer's time. System speeds and system design should allow the buyer to sign on to place an order more quickly than placing an order by phone.

4.   The information online must be timely and, above all, accurate. Is the inventory on hand? When can the vendor ship?

5.        Most importantly, security must be rock solid. No vendor will last long if security is not a key part of the activity.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 11


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