Supply Chain Comparison

Supply Chain Comparison - B2B Versus B2C

The supply chain encompasses all activities associated with the flow and transformation of goods from the raw materials stage through to the end user. An example of a simplified supply chain utilizing my own company, Philips Medical Systems, would likely progress as follows:

1. A customer (hospital) requests a medical printer to accompany their digital imaging equipment.

2. Philips, which doesn't produce the printer, receives the request and only acts as a third party vendor, orders the printer from the manufacturer.

3. The manufacturer of the printer orders raw materials from the respective suppliers in order to produce the printer.

This is a very simple example of the supply chain. The supply chain not only involves the steps listed above, but the transportation companies as well.

B2B

B2B, or business to business, is a category of electronic commerce. B2B is considered transactions conducted between businesses. B2B eCommerce occurs when companies are buying from and selling to each other online. B2B eCommerce has evolved past just basic purchasing. It now encompasses supply chain management as more organizations continue to outsource parts of their supply chain to their trading partners.

B2C

B2C, business to consumer, is another category of eCommerce. B2C are the transactions between shoppers and businesses on the Web. Examples of this type of eCommerce would be the purchase of an item from Walmart.com. According to Wikipedia, Business-to-consumer electronic commerce is a form of electronic commerce in which products or services are sold from a firm to a consumer (www.wikipedia.com). An example of the services provided would be the purchase of airline tickets from Travelocity.

B2B versus B2C supply chain

The greatest difference in the B2B / B2C supply chains are the number of channels or chains. The B2C has a considerable larger amount of channels. For example, in business-to-business eCommerce, the producer of an electric motor would supply their product to other businesses that required that electric motor in their product. While this can be a large number of businesses, it does not compare to the amount of channels required by business-to-consumer eCommerce. In the example of Walmart.com, the amount of customer purchases in one day could equal the amount of B2B transactions in an entire year. This large number of transactions greatly increases the quantity of distribution resources.

While the number of channels in B2B is less compared to B2C, the amount of product in the channel could be significantly higher in B2B. In the previous examples, a manufacturer might order 1000 motors at a single transaction, while the B2C channel might only lead to a single product purchase from the online store.

The amount of time required to complete the eCommerce transaction can