About the Concept of ERP for an E Commerce Business
We live in the world where E commerce is conducted through internet, sales precedes E commerce therefore we are in a world of internet sales platforms or gateways which are portals.
Can we extend this gateway to an enterprise resource planning portal? The answer is yes; some E commerce applications or portals have unknowingly achieved a partial victory in this area. As, said earlier E Commerce is commerce through internet, which means procurement is performed through internet. Procurement involves following back end processes listed in the order of occurrence. They are:
1 Demand or requirement to procure.
2 Produce or procure the product: Options exercised by some Manufacturing firms.
3 Estimate the demand of an end product or to be procured product.
4 Inventory planning.
5 Procurement plan.
6 Source Identification.
7 Quotation process.
8 Purchase .
9 Re-order based on the forecast or inventory planning, the process cycle continuous.
The process cycle is semi-automated, if the Purchase order is a blanketed one based on the inventory plans. Can an E commerce Portal support the 9 step procurement process, some applications have included the blanket purchases, such as recurrent purchases where the customer authorizes a credit card in advance to be procured on a monthly basis.
An E commerce portal can leap ahead by accommodating non monthly or customized recurrent purchase through credit cards or cash on delivery terms. This will exactly mimic the 9 step procurement process, a Portal selling a commodity can provide a median price by considering several sources and identifying a cluster of prices at the median.
If a prospective customer can Name his price online, which is nothing but online negotiation where the Vendors representing the product agree or disagree, which can lead to instantaneous negotiation and decision to procure the product can be made immediately one-time basis or recurrent basis.The portal also need to further vet the supplier to assure a Customers product quality and delivery requirements, which further speed source Identification.
A recurrent purchase from a supplier can directly be translated as an extended product demand provided by the Customer, this can be pooled and averaged along with several similar customers and computed in a forecasting algorithm (built in the E commerce application) can now forecast demands, which can be published or communicated with the pertinent supply base in the portal.
The pricing can be further Optimized based on the forecasting and the supply chain subscribing the portal can plan their production and structure their process costing based on the communicated demands.
This Portal can also forecast the reports and its customer’s needs for a particular product. The Product can also be displayed in the portal based on the Customer demands and we can rate the products accordingly.
This article is all about to illustrate an integration of various ERP concepts in E commerce business, so that small businesses can become learner by simply subscribing to product dedicated E commerce portal through a Simple smart phone and can reap the benefits of ERP and also small business thus can reduce its overhead by 20% by using an ERP and E commerce combined application. The E Commerce Portal can have a consistent customer and Supplier base with such an useful application.