International Business | Internet Assignments

International Business : The Challenge of Global Competition, 8/e

Donald Ball
Wendell H. McCulloch, California State University Long Beach
Paul L. Frantz, California State University Long Beach
Michael Geringer, California Polytechnic State University
Michael S. Minor, University of Texas Pan American

Global Operations Management: The Third Industrial Revolution

Internet Assignments

Students:

Included here are some internet/case assignments that you can use to review or that your instructor may give as assignments. Your instructors have been given the answers to these questions and may choose to give them out to you or not.

This case is designed to:

Expose you to Business-to-Business E-Procurement; and
Focus on Covisint, an integrated auto-parts supplier exchange.

A true revolution is occurring in business today as more and more companies are developing Internet based strategies to streamline their business operations. Oftentimes, a business begins exploring the opportunities that the Internet offers by establishing a web presence. What this means is that the business has a web site that provides information about the company. With the success achieved by having a web presence, the business then begins to integrate the Internet into its established business processes. For example, the business may utilize the Internet to acquire supplies or even use a process redesign to integrate its purchasing process with its suppliers' systems. In the final move, the business places the Internet at the core of its business model. Here, the Internet is often positioned as a significant enabler of key processes such as customer relationship management, ordering, fulfillment and procurement.

As a business moves through these stages, the manner in which it conducts business is being fundamentally changed. Nowhere is this more evident than in the area of procurement. Termed e-procurement, purchasing is shifting from a pencil and paper environment to an electronic environment in which purchasers can source around the globe in seconds to locate optimal buys. The result is lower cost of goods sold, lower inventory costs and faster fulfillment cycles. In addition to the shift, many companies are setting up e-procurement exchanges in conjunction with other firms in their industry. Here, purchasers and suppliers are brought together in cyberspace to efficiently and dynamically interact with one another.

An example of an e-procurement exchange is Covisint. Covisint is an integrated auto parts supplier exchange developed jointly by General Motors, Ford and DaimlerChrysler. Soon, Renault-Nissan will be joining General Motors, Ford and Daimler Chrysler.

Case Instructions:

Read about Covisint in the July 17, 2000 Forbes article "Ford's Model E" by Jay Akasie http://www.forbesbest.com/b2b/0100/030.html Also visit the Covisint site at http://www.covisint.com . Answer the following questions:

How many prospective suppliers does Covisint hope to connect?
Ford and its three rivals-turned-partners spend roughly $700 billion per year on the components that make up its cars. These components come from three tiers of suppliers. The tier 2 and 3 suppliers account for what percentage of the $700 billion per year?
What type of savings does Ford envision resulting from Covisint?
In Covisint, virtual product workspace or VPW is part of the collaboration platform. What are the VPW value propositions (hint: take the Virtual Project Workspace tour.)?
Covisint SupplyConnect is the communications hub for the Covisint-enabled automotive supply chain. It allows companies to quickly share critical information such as material releases, production schedules and shipping notices. All trading partners in a supply chain can connect electronically through Covisint SupplyConnect, thereby eliminating the need for the multiple point-to-point communications. SupplyConnect is XML based and format neutral. Therefore, it can send and receive information using different formats and protocols. What are SupplyConnect's value propositions? (Hint: take the SupplyConnect tour).
Do you think that e-procurement is really the wave of the future? Why or why not?