The ability to redefine inter-firm relationships and processes, internet-enabled and other Business to Business (B2B) mechanisms facilitate the integration and management of inter- or intra-organisational business processes that produce value for customers. B2B e-commerce in supply chain management (SCM) becomes more important due to its performance implications. Process integration involves upstream and downstream coordination with supply chain partners. In these interactions, supply chain B2B e-commerce helps minimize complexity and increase flexibility while enhancing a higher degree of communication and operational efficiency.Supply chain management; Business to Business marketing; Electronic commerce; Globalization.

Alexandru Nedelea

George Onofrei

English

Research Papers in Economics

AE  Economic Interferences 
 
Nr. 21● Februarie 2007  45
 
THE IMPACT OF E-COMMERCE ON THE SUPPLY  
CHAIN B2B IN IRELAND 
(Impactul comerţului electronic asupra lanţului de distribuţie B2B în Irlanda) 
 
 
 
 
 
 
 
Abstract 
 
The ability to redefine inter-firm 
relationships and processes, internet-
enabled and other Business to Business 
(B2B) mechanisms facilitate the 
integration and management of inter- or 
intra-organisational business processes 
that produce value for customers. B2B e-
commerce in supply chain management 
(SCM) becomes more important due to 
its performance implications. 
Process integration involves 
upstream and downstream coordination 
with supply chain partners. In these 
interactions, supply chain B2B e-
commerce helps minimize complexity 
and increase flexibility while enhancing 
a higher degree of communication and 
operational efficiency. 
 
 
 
Keywords:  
•  Supply chain management; 
•  Business to Business 
marketing; 
•  Electronic commerce; 
•  Business performance; 
•  Delivery lead-time; 
•  Globalization. 
 
 
 
 
 
      Rezumat 
 
Abilitatea de a redefini relaţiile şi 
procesele între firme, mecanismele 
Business to Business (B2B) facilitează 
integrarea  şi managementul proceselor 
manageriale intra şi interorganizaţionale 
care produc valoare pentru clienţi. 
Comerţul electronic B2B în 
managementul lanţului de distribuţie 
devine din ce în ce mai important 
datorită implicaţiilor de performanţă. 
Integrarea procesuală implică 
coordonarea în aval şi în amonte cu 
partenerii lanţului de distribuţie. În 
cadrul acestor interacţiuni, lanţul de 
distribuţie B2B al comerţului electronic 
ajută la minimizarea complexităţii  şi 
măreşte flexibilitatea concomitent cu 
asigurarea unei mai bune comunicări şi 
eficienţe operaţionale. 
 
 
Cuvinte cheie: 
•  Managementul distribuţiei; 
•  Marketingul de tip  
B2B; 
•  Comerţul electronic; 
•  Performanţa afacerii; 
•  Livrare lead-time; 
•  Globalizarea. 
 
 
 
 
 
 
George Onofrei MMII, BBS   
Letterkenny Institute of Technology, Ireland 
onofreigxg@o2.ie 
Alexandru Nedelea, Ph.D. 
Stefan cel Mare University, Suceava 
alexandrun@seap.usv.ro AE  Interferenţe economice 
 
Amfiteatru Economic  46 
 
Introduction  
 
The globalisation of markets, 
growing interpenetration of economies, 
rapid technological change, volatility of 
demand, wider variety of products 
available, faster delivery, quicker 
product development and low cost 
manufacturing indicate new type of 
competitive environment. Recent market 
trends indicate that e-commerce becomes 
an order qualifying criteria and 
businesses need to incorporate it as an 
integral part of their supply chain 
management. The importance of 
eBusiness in developed economies is 
reflected in the fact that €77 billion 
worth of business was transacted in 2003 
on-line within the E.U. and that figure is 
forecast to grow to €2.2 trillion by the 
end of 2006, equivalent to 22% of all 
E.U. industrial trade (Forrester Forecast).  
The use of advanced Information 
Communications Technologies (ICTs) 
has become the most significant driver of 
world economic growth. ICTs are the 
catalysts through which enterprise, 
whether traditional or new, can create 
sustained competitive advantage for its 
products and services on world markets. 
In reaction to this reality, businesses 
have invested heavily in IT; many firms 
worldwide have succeeded in improving 
customer service levels with their e-
commerce initiatives to transform 
business processes. Levi’s for example, 
had difficulty meeting Wal-Mart’s 
demand schedule, facing major problems 
with on-time delivery record. B2B e-
commerce has enabled the company to 
improve its demand replenishment 
systems, besides facilitating 
collaboration on demand forecasting, 
product modifications and order-
planning with Wal-Mart. As a result, 
Levi’s has improved its on-time delivery 
record from just 65% to around 95% 
rates. Ford Motor Company, on of the 
top car manufacturers in the world, 
implemented many e-commerce 
initiatives to harmonize its business 
process. It designed a web interface, 
called Covisint, to link front-end sales to 
the back end ERP systems and developed 
a business to business portal for its 
supplier to fill orders and provide 
financial information electronically on a 
real-time basis. Among the various 
benefits the company has reduced its 
customer service costs and improved 
their delivery performance. 
 
Ireland's enterprise culture is 
grounded in strong pro-enterprise 
policies. These include a stable political 
and policy environment, prudent 
management of the public finances, 
investment in key infrastructures, the 
provision of a well educated and flexible 
workforce, a successful system of social 
partnership, a low business corporation 
tax regime and the development of an 
open economy exporting some 81 % of 
GDP (eBusiness Monitor Report, 2003). 
 
 
1. E-commerce 
 
Wigand (1997) defines e-
commerce as “any form of economic 
activity conducted via electronic 
connections”. As we can see this 
definition highlights two important 
aspects of e-commerce: economic 
activity and electronic connections.  
 
Delfmann et al (2002) divides an 
economic transaction into five phases: 
 
(1) Initiation; 
(2) Agreement; 
(3) Exchange; 
(4) Inspection/control; 
(5)Adjustment/Service  
 
                                (see Figure 1) AE  Economic Interferences 
 
Nr. 21● Februarie 2007  47
 
 
The second element of e-
commerce is the electronic connection, 
which can range from phone lines, 
telegraphic wires to fibre optic cables 
and satellite connection.  Combining the 
two elements defined above, e-commerce 
can be expressed as the two way 
communication via electronic networks 
that allows the automated processing of 
economic transaction data. Accordingly 
to Delfmann et al (2002) e-commerce 
can be identified in nearly every type of 
economic relationship (see figure 2). 
 
 
By referring to the figure above, 
five general types of e-commerce 
transactions can be identified: 
 
(1) Business to business (b2b); 
(2) Business to consumer (b2c); 
(3) Consumer to consumer (c2c); 
(4) Business to administration (b2a); 
(5) Consumer to administration (c2a). 
 
Mahadevan (2000) identified 
within these types of transaction three 
Source: Delfmann et al (2002) 
Figure 1. Phases of an economic transaction
Supplier  OEM   
Wholesaler                   Retailer   Consumer 
Figure 2. Types of E-commerce 
Adapted from Delfmann et al (2002) AE  Interferenţe economice 
 
Amfiteatru Economic  48 
 
basic classes of business models: 
(1) Portal 
(2) Market maker and 
(3) Product/Service provider (see figure 
3 for examples) 
Portal  offer information, search 
services for their customers and serve as 
the entrance into the e-market. Their 
revenues streams mainly come from 
advertisements and provision fees for 
channelling Web traffic to Web sites of 
product/service providers. 
Market maker enables economic 
transactions between a community of 
customers by offering mechanisms for 
the secure and trustworthy conduct of 
such transactions. Their source of 
revenues can be provision fees per 
transaction or one-time charges for 
developing and establishing electronic 
marketplaces. 
Product/service providers are 
companies that sell directly via the 
internet. Depending on the type of 
good/service, the result can be the 
physical or digital delivery of goods or 
the performance of some kind of service. 
 
2. Supply Chain B2B e-commerce 
 
E-commerce is a revolutionising 
element in SCM and is used to link 
suppliers, manufacturers and 
downstream customers providing 
considerable additional value to 
activities. In a B2B context involves a 
wide spectrum of activities including 
purchasing, supplier management, sales 
activities, payment management, service 
and support. The use of e-commerce in 
SCM involves a mix of Internet and 
other electronic technology in order to 
facilitate integration and management of 
Figure 3. Business models in  
E-commerce AE  Economic Interferences 
 
Nr. 21● Februarie 2007  49
 
core business processes between key 
supply chain partners.  
 
Conclusions 
 
E-commerce provides a 
fundamentally new way of conducting 
commercial transactions and has far-
reaching economic and social 
implications. It will affect industry 
structures and competition in home and 
international markets.  
It presents major new business 
opportunities for Irish-based enterprises 
and for the development of new sectors. 
It also poses significant threats for 
enterprises that do not prepare for the 
fundamental changes that are taking 
place. At a national level there is a need 
to ensure that the required legal, 
regulatory and facilitatory business 
environment is conducive for the 
enterprise sector to fully exploit the 
opportunities and to develop Ireland as a 
leading location for e-commerce-driven 
investment. At the level of the 
development agencies, it requires a new 
approach to the development of national 
enterprise policies and new actions.  
 
 
 
 
References 
 
1.  Delfmann, W., Albers, S., Gehring, M. The impact of electronic commerce on 
logistics service providers, International Journal of Physical Distribution and Logistics 
Management, Vol. 32, No. 3, pp. 203-222, 2002 
2.  Forrester Forecast, source www.forrester.com 
3.  The National Policy and Advisory board for Enterprises, Trade, Science, 
Technology and Innovation, “eBusiness Monitor Report”, Forfas Publications, 2003 
4.  Wigand, R.T. Electronic commerce: definition, theory and context,  The 
Information Society, Special Issue: Theory and Practice of Electronic Commerce, Vol. 13, 
No.1, pp. 1-16, 1997 

Electronic commerce: definition, theory and context, The Information Society, Special Issue: Theory and

The impact of electronic commerce on logistics service providers,

The National Policy and Advisory board for Enterprises, Trade, Science, Technology and Innovation, “eBusiness Monitor Report”, Forfas Publications,

THE IMPACT OF E-COMMERCE ON THE SUPPLY CHAIN B2B IN IRELAND

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