Supply Chain Information Management - Assignment Example

Supply Chain Information Management Table of Contents EBay As an Outsourced Network 3 Distribution Process 4 Drop Shipping 5 References 7 EBay As anOutsourced Network eBay can be considered as a website dealing with online auction, permitting the users to sign up with the site and thus be either bidder or seller. When the services are farmed out to a third party it is called outsourcing. The two terms namely outsourcing and offshoring are used interchangeably. The main advantage that one receives from outsourcing is lower costs, augmented efficiency, variable capacity, lack of in-house resources, admittance to particular IT skills, greater access to innovation along with thought leadership.

With the rising complexity in the products/services, outsourcing and globalization have made the supply chain network complex as well. This has affected the risk, altering it and altering its location in supply networks1 It has been found that the company i.e. eBay is considering outsourcing of its business functions to Indian subsidiary. The functions that the company plans to outsource have been customer relationship management, network management related operations, trust as well as safety and product development which are quite significant for eBay2 It has been observed that in most of the cases the companies tend to make generally two sorts of mistakes in outsourcing.

The companies tend to make use of outsourcing services too much and thus become dependent upon them. It has even been noted that a few of the companies try not to use the option of outsourcing at all even when the outside help is of considerable importance. In order to make its site available 24x7 eBay has attempted to distribute its functionality of auction so that if one server fails it does not impact the site completely. Distribution Process Text books can be reached at the doorstep from the publishers at times at half of the price.

This is because of the physical distribution of the goods and services. Physical distribution of the goods includes all the activities ensuring that right amount of product are reached at the right time to the right place. It has been found that eBay has been considered as the important marketing tool as well as distribution channel for both the individuals and businesses. With numerous products such as books, dolls, shoes, high tech medical equipments, and airplanes among others eBay has been successful at presenting itself as a service provider of unmatched capacity.

It has been found that one of the reasons for the success of the eBay has been it ability as a great equalizer3 The value proposition of the ebay.com has been to attract the buyers by providing them entertainment, selection, convenience and value. It tries to attract the sellers by providing them the facility to access the global market, distribution, cost effective marketing along with access to huge number of customers. The company tries to offer 24x7x365 access to its online shopping and trading and thus supports the customers.

In order to drive the customers towards the site, it has developed strategic advertising partnership especially with click-through advertising on websites. With the help of search-engine optimisation techniques, it is capable of attracting the shoppers. It is because of the efficient supply chain management techniques adopted by the company, the goods are delivered at the doorstep via various agents and distributors4 Drop Shipping Drop-shipping can be defined as the function of the marketing whereby the physical ownership of the goods sold is not held with the middleman, at the same time as the title of the goods flows through the concerned parties.

Drop shipping involves the middleman who begins the drop ship order and also involves the stocking entity who is responsible for providing the drop-shipping services by fulfilling the order that was made by the middleman. It has been noted that in case of eBay’s selling, one of the serious professionalism has been online business thus providing quality customer services. Most of the eBay sellers are applying the technique of drop shipping in their home businesses5 One of the main advantages of drop shipping is lesser inventory level that the companies need to maintain.

The suppliers make certain that the products are made accessible when required by the customers which lessen the need for safety stock thus leading to lower inventories. The risk of cash being tied up with the stock is generally reduced to a greater extent because of drop shipping. It has been noted that most of the suppliers prefer to make use of the drop shipping since it minimises the uncertainty of demand. The retailers as well as the suppliers are capable of having greater visibility of their stocks as well as goods.

It also assists in the reduction of the transportation cost. Therefore, in this regard, it can be mentioned that the drop shipping makes supply chain management more proficient6. References Center For Advancing Health. 2009. eBay. Com. http://www.cfah.org/activities/Getting_Tools_Used/ebay.pdf (Accessed September 02, 2011). Gordon, Debbie. 2011. Capitalising on eBay’s Distribution Channel. http://www.entrepreneurship.org/en/resource-center/capitalizing-on-ebays-distribution-channel.aspx (Accessed September 02, 2011).

Harland, Christine. & Et. Al., 2003. “Risk in Supply Chain”, Journal of Purchasing and Supply Management. Vol; 9, Iss: 2, p.p.: 51-62. Infosys. 2011. Growing significance of Drop Ship Business Model Part II. http://www.infosysblogs.com/supply-chain/2011/06/growing_significance_of_drop_s_1.html (Accessed September 02, 2011). Netessine, Serguei. & Rudi, Nils. No Date. Supply Chain Structures On The Internet. http://opim.wharton.upenn.edu/~netessin/Chapter19.pdf (Accessed September 02, 2011).

Ribeiro, J. 2005. Ebay Considers Outsourcing U.S. Work To Indian Subsidiary. http://www.computerworld.com/s/article/101383/EBay_considers_outsourcing_U.S._work_to_Indian_subsidiary (Accessed September 02, 2011).