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S Ravishankar



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LATEST TRENDS IN SUPPLY CHAIN MANAGEMENT Future of manufacturing industry lies in B2B e-commerce

Oct 21, 2021

B2B e-commerce is a boon to purchasing functions - S Ravishankar, Co-founder, Toolkart

Over the years, we have seen procurement functions of the manufacturing industries undergo certain changes owing to computerisation and adaption of ERP systems. Today, with the growth of the internet and digitisation, the purchasing is heading towards e-commerce.

In a typical manufacturing industry in India, the inputs & material costs account up to 50% of the manufacturing cost. Hence, the key target of the purchase function is to keep reducing the buying costs. The purchasing function has to ensure good quality, timely availability & lowest price, and often while leveraging the combination of the three, end up in conflicting situations.

The emergence of B2B e-commerce is a boon to purchasing functions as the choice of quality, exact stock status and multiple brands with price options will help the industries meet the procurement targets and improve profit margins. With the internet and smart phones becoming affordable to commoners, internet users are estimated to be 876 million by 2025. This has been a boost for the commercial phase of India, and e-commerce has become viable. Plus, advancements of various technology platforms, like Artificial Intelligence, Virtual Reality, Augmented Reality, etc have also been supporting the growth of the e-commerce space.

Many Indian start-ups are trying their best to digitise the whole supply chain in India. And with more small business owners joining the tools offered by e-B2B players, like digital cataloguing, online payments and logistics, the segment will continue to grow.

The benefits derived by the industry by adapting to B2B e-commerce are many. Below is the partial list of important ones:

  1. Wider choice.

  2. Artificial Intelligence-enabled technical selection and assessment of products.

  3. Real-time stock availability status.

  4. Transparent pricing eliminates middlemen and corruption.

  5. Reduced sales costs due to short sales channel and optimised service costs leading to lower prices, which will be beneficial to the industry.

  6. Reverse auction process can provide an equal and transparent opportunity to all participants.

  7. Simplified purchase process resulting in reduction of efforts from the indirect functions like purchase stores, etc will improve the operating efficiencies.

  8. Single source of supply for multiple brands can vastly improve financial management process.

  9. Online requirement definition involvement of end-users, purchasers and finance.

  10. Easy linking to ERP systems & ready MIS for the top management to monitor the procurement process.

  11. Easy return policy and ticket-based complaint redressal will help reducing post-sale issues resolution.

COVID-19 hastened the development of B2B e-commerce, and many sectors have realised the advantage of this model.

As the manufacturing industry embraces Industry 4.0 standards, where the interactions based on AI and AR will be more between the machines (computer systems), B2B e-commerce will play a major role in ensuring seamless supply chain management.

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