B2B vv. B2C Supply Chains












Randy Johnson
EBUS 400
Professor Catlado
July 25, 2005

Introduction
     In the age of technology business has come a long way and evolved tremendously. It used to be that brick and mortar was the only way to open and run a business. However, the internet has changed all of that now businesses can use technology to reach customers and other businesses all over the world. This has caused a great surge in the world wide economy. In 2003 Business to Business (B2B) commerce tipped the scales at $1.41 Trillion. This is in comparison to Business to Consumer (B2C) that was $90.1 Billion (Naraine, R.2003). All of these purchases need to get transported and that is where businesses supply chains come in play. Contrary to popular belief the supply chains of B2B and B2C are not the same both have unique qualities. This paper will define the term supply chain. Then it will define the terms B2B and B2C. Finally, it will explain how the supply chain differs on a B2C site compared to a B2B site and provide examples.
Supply Chain
     According to learnthat.com a supply chain is the series of channels a product takes from its initial production to reach it’s finally destination (Learn That, 2004). A typical example of this chain of events that occurs in everyday life would be when a guest walks into a Target Store and purchases a X Box Game. The supply chain begins with the guest and the need for the game. Then it continues to the brick and mortar store. This Target store receives its product from the Target Distribution Center. The Target Distribution center receives the product from the manufacturer. Finally, the manufacturer receives the raw products from several other suppliers. This basic supply chain is liquid and continuously goes back and forth.
B2B
     When people hear B2B or business to business they might recall the classic image of an old style ice salesman traveling from business to business delivering ice in order for them to keep their merchandise cold. Fast forward 60 years and now B2B eCommerce occurs when companies are buying from and selling to one and 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 (Varon, E., 2001).

B2C
     B2C is pretty straight forward with the title business to consumer, it conjures thoughts of a customer going into a store and making a purchase. When most people think of B2C e-commerce, they many different websites that offer products for sale, these sites include Overstock.com Target.com, Wal-mart.com, Amazon.com, etc. However, these are just the tip of the iceberg. B2C eCommerce now has matured and includes a myriad of online services. These services can/ do include online banking, travel services, online auctions, health information, real estate as well as some less reputable sites (Patton, S., 2001).



B2B vs. B2C Supply Chain
     The B2B and B2C supply chains might appear to be similar however, that assumption can not be further from the truth. The main difference between the two is the amount of channels a product must flow through before reaching the end user. With B2B there are less total channels however they are greater in size when to compared to the greater amount of smaller channels with B2C. (Marketing Profs, 2005) For example: A new car manufacturer is looking for tires to put on their new line of cars. They would deal directly with a tire manufacturer to get their product. The channels would simply be from the car manufacturer – tire manufacturer – raw supplies dealers. Now let’s look at an individual looking to book a flight and hotel in Las Vegas. The chain would be as follows, individual – online store – airline – airline staff - hotel – hotel staff. The next difference comes with technology and that is integration, B2B needs to be integrated to their business partners software for smooth resupply , billing, etc. This is an aspect that the B2C does not have to worry about since the customer will return to them out of loyalty versus convenience. Once again we will use the examples above once Mars Auto signs a deal with Firestone the systems will have to communicate so Firestone knows how many vehicles are going to need tires delivered for the next week and so forth. They will also have to account for the tires received and charge the company accordingly, with integration billing and payments can be transferred back and forth. In the case of booking the flight and hotel, the B2C does not have to be integrated due to the fact that this might be a one and only transaction with this customer (CIO Decisions, 2005)

Conclusion
In conclusion, as demonstrated not only has technology changed the relation ship between a business and it customer, it has also changed the relation of business to business. The supply chains of both have become faster moving yet still as challenging and as different as ever. The shorter and larger scale b2b versus the smaller and ever longer b2c. These both are still extremely successful in creating a more global economy and with improvements should provide continuing success.

























References

Naraine,R., 2003, B2C Goes From Rags to Riches, retrieved from the World Wide Web on: http://www.internetnews.com/stats/article.php/2196821

Global Market, 2004, B2B Market Trends, retrieved from the World Wide Web on: http://www.ewowfacts.com/pdfs/chap04/33.pdf

Learn That, 2004, Definition of Supply Chain, retrieved from the World Wide Web on: http://www.learnthat.com/define/view.asp?id=339
Varon, E., August 2001, The ABCs of B2B, retrieved from the World Wide Web on: http://www.cio.com/ec/edit/b2babc.html

Patton,S., August, 2001, The ABC’s of B2C, retrieved from the World Wide Web on:http://www.cio.com/ec/edit/b2cabc.html
Marketing Profs, 2005, What differentiates B2C supply chain from B2B? retrieved from the World Wide Web on: http://www.marketingprofs.com/ea/qst_question.asp?qstID=7770
CIO Decisions, 2005, Executive Guide B2B Integration, retrieved from the World Wide Web on: http://searchcio.techtarget.com/generic/0,295582,sid19_gci1067719,00.html?bucket=REF