This paper will seek to highlight some of the ways in which the Internet will have an impact on today's concept of supply chain management. The Internet is not new. It has been with us for over two decades, yet it is only in the last two to three years that it has exploded into the collective consciousness (starting initially in the consumer end of most supply chains and moving lately into the business-to-business arena). Fortunes are being lost and won as companies jockey for position on the Internet. The volume of announcements and advertising around the Internet is phenomenal, and it is becoming increasingly difficult to determine who will survive in the long term.
The hype would have us believe that the Internet threatens to make redundant the best practices, supply chains, and business models that we have been trying to perfect (at great cost) over many years in the so-called "Old Economy" of bricks-and-mortar companies. Ironically, however, it would appear from a recent study conducted by the London School of Economics and Novell that it is the clicks-and-mortar companies who are being most successful in applying the Internet today. This is based primarily on their deeper understanding of what it take to successfully execute and fulfill in a supply chain environment.
So whom do you believe and where do you focus? There is no doubt that over the next couple of years the usage of the Internet in business-to-business collaboration will far outweigh that of business-to-consumer.
Peter Sondergaard, vice president at Gartner Group, was quoted at the company's spring symposium in Florence as saying that "by 2004, the worldwide business-to-business e-commerce market will be worth $7.3 trillion, representing 6.9 percent of the global economy." The message for online companies from the Gartner Group executive was clear: Shift to a business-to-business focus or die.
Sondergaard went on to destroy some myths. "Dot.com companies won't dominate in the future, as some may think," he said. "In fact, 95 percent of all Internet-only companies will fail in the next 24 months, leaving room for more successful clicks-and-mortar or hybrid companies."
What is the reality? Why has the Internet been adopted so fast and what potential does it hold for the discipline of supply chain management?
To Be Continued