HRAI e-Business Centre

e-Business is about operational improvements that result from extending computer capabilities beyond the "four walls" of a company. This enables companies to work together to share and leverage their information to streamline processes. This sharing of information can make both businesses more efficient.

While sharing information is not a new concept, the Internet makes sharing simple and inexpensive. e-Business methods improve the flow of information up and down supply chains, making ordering and shipping goods easier and reducing associated costs. e-Business methods simply make the information used by manufacturers, wholesalers and contractors more accurate and timely. The increased flow of information makes the flow of products in any supply chain more efficient. Additionally, inventory levels can be reduced to more efficient levels, freeing up valuable cash and reducing overheads. Lower inventory levels produce higher turnover rates, reducing the risk of product obsolescence. Other savings come from the ability to provide product information 24 hours a day, seven days a week, on demand. Better information improves the performance of some of the most fundamental business activities such as:

• Providing product information
• Placing and receiving orders
• Managing inventory (100% accurate stock level inventory files)
• Reducing shipping errors
• Providing timely and accurate order status information
• Matching invoices and payments with shipments and receipts

e-Business provides new capabilities for existing systems and a much higher level of performance from new computer systems. When considering making operational improvements, ask yourself the following questions:

• Do I really have a problem? What do my customers or suppliers say?
• If it's an activity that involves my customer or supplier, are they willing to help?
• If I were already incorporating e-Business concepts into my business practices, would using additional capabilities improve my operation? How would it work?
• Have others used e-Business successfully?
• If there is a technical solution to an operational problem, where can I find a technology provider to solve my problem?

Yes! The truth is that even the most sophisticated, complex and advanced systems are based on exactly the same fundamentals available in a smaller breed of systems that offer an immediate improvement to small businesses.

e-Business systems use computers to reduce the amount of time that people spend in non-valued added activities. Once real-time, highly-reliable information is freely flowing up and down the supply chain, it enables companies to make decisions that are more informed. Better information to facilitate effective decision making is really what executives are looking for.

The benefits that come from linking systems together to provide product information and then to simplify the ordering, picking, verifying and shipping processes is one example. By automating related business functions, every system involved receives enormous benefits. Information is:

• Timely
• Accurate
• Stored where it can be retrieved quickly and inexpensively

Contemporary systems that enable e-commerce eliminate much of the time spent on placing orders and receiving shipping information. Eliminating that time means that employees can spend valuable time interacting with customers and suppliers, thus making them more productive. As a bottom line measurement, some companies have been able to increase sales volume from 12% to 25% without having to add any staff or even increase the size of their facility. Even just providing product information electronically, eliminating the need to send product literature through the mail or fax machines can provide dramatic results. e-Business systems that are based on real-time information that is passed electronically between computers provides visibility into inventory levels, transaction rates and other important trends.

We are not suggesting that customers will not need to call suppliers on the phone to discuss products and enter orders. Nor are we implying that customers will be able to get all of the product information they need from the Internet. However, not every time a product is ordered do phone calls, faxes or hand-written orders need to be used.

The types of systems that we're discussing have the ability to electronically communicate with each other. This means that part numbers are not transposed and vague descriptions that may cause improper product shipments are not used. It also means that a supplier computer can send a message to a customer computer regarding stock status, order status or shipment information. Data entry devices such as barcode readers can be used to verify that the item number ordered was, in fact, the item number on the product when it was shipped, received, stored and then when it was used.

Think of this. A contractor on a job using a simple, hand-held device (much like a cellular telephone) could scan a barcode on every item used on a job to immediately produce a bill of materials, obtain a digital "signoff" from a customer or foreman and produce a receipt to be left with a customer. Instantly the office can be notified, an invoice can be prepared and a parts replenishment order for the truck can be produced.

Take it to the next step. At the office the computer system receives information from all the contractors’ trucks and not only produces replenishment orders to be delivered to them, but also generates requisitions that the company can turn into purchase orders (to be sent to wholesalers or manufacturers) simply by reviewing and authorizing them. Those replenishment orders are then electronically sent to the suppliers. Suppliers electronically acknowledge the orders and include shipping information. When the items are received, the company matches (using a barcode) the items to the purchase order. The system instantly and accurately adds the item to available inventory. To eliminate additional paperwork, the system electronically notes that the bill is now "payable." When it is time to pay the bill the authorized individual simply approves payment (by reviewing a list on the computer screen). Then cheques are automatically produced and mailed or an electronic funds transfer is made.

Please note that the systems that enable e-Business not only eliminate the time-consuming aspect and repetitive ordering functions associated with frequently ordered items, but they also eliminate the problems of matching paperwork such as invoices, manifests and purchase orders. In addition, the individual performing the installation, maintenance or repair is performing these functions in real-time which eliminates the need to remember all that was done after they have left the job site, reducing costly errors.