The company's purchase of raw materials and services is a complex multi-step process. First of all, buyers should look for raw material suppliers and determine whether they can meet the requirements of batch, delivery, quality and price. Once they find potential suppliers, they must exchange detailed information with suppliers to ensure that products can truly meet the requirements of customers. All the above processes can be regarded as the process of finding and transferring information. In the absence of a complete computer network, the acquisition of the above information requires a lot of manpower and financial resources, and can not guarantee the acquisition of complete information. The Internet has overcome this problem to a large extent. With the increase of companies joining the network, assuming that the product samples have been confirmed and the supplier's production line is ready for production, the purchaser needs to give an order for a certain amount of goods. Then, the purchaser gets a reply from the supplier, confirming that the order has been received and the requirements can be met. When the product is shipped, the purchaser will be notified together with the goods delivery invoice. The accounting department of the purchaser shall verify the order and invoice and make payment. The company obtains discounts through a large number of purchases, and develops relationships with major suppliers to reduce costs; At the same time, manufacturers continue to introduce suppliers willing to provide lower prices to reduce costs. For large companies with strong strength, it is feasible to use EDT (Electronic Data Interchange) system to reduce labor, printing and mailing costs in the procurement process. Automation in the daily procurement process means that procurement personnel have more time to focus on price negotiation and establish supply channels. Experts estimate that the current trade in goods and services through this system has exceeded 150 billion dollars, and companies using electronic data interchange systems can usually save 5 to 10 percent of procurement costs.
The longer a company arranges supply, the slower it will respond to changes in customer demand. The more inventory, the higher the operating expenses, and the lower the profit. At the same time, a large amount of inventory may not satisfy customers. Effective inventory management can not only improve customer satisfaction, but also reduce operating costs. Increasing inventory turnover can reduce inventory related interest and storage costs. Reducing inventory levels also shows that existing production capacity can be used more effectively. Effective production capacity can reduce or even cancel the investment in plant and equipment due to the need to expand production capacity.
The example of Dell Computer Company effectively illustrates how the Internet and Intranet enable the company to reduce inventory and better meet customer needs. Chenger has created a new sales model - production according to orders and direct sales. In this way, the circulation link is reduced, and the high amount of agents and retailers is common in traditional channels. The price difference will disappear. At the same time, the inventory cost will be greatly reduced. By 1999, Dell had replaced Compaq as the largest manufacturer of desktop computers. Compared with its major competitors who rely on traditional sales methods, Dell's computers had a price advantage of 10% - 15%. As a company with a short history, Dell has made such remarkable achievements in the competitive field, The fundamental reason lies in the deep understanding and utilization of the Internet. Dell began to study how to use the Internet when its peers in the industry realized this. As early as 1996, Dell customers were able to directly configure and order computers through Dell's site. Within six months, Dell sold computer products worth one million dollars through computers. A few months later, the number doubled again. Through online services, Dell has completely realized no inventory sales. The biggest difference between Dell's online sales strategy and the conventional sales method lies in the direct information exchange between producers and consumers. Under the traditional production mode, producers' grasp of demand surplus comes from the change of market price, that is, they judge the number of production pots through the "invisible hand" of price. However, this mode is difficult to estimate the market demand in time, and the number of production pots often lags behind the change of demand. However, Dell's judgment on the number of production directly comes from the demanders, and its production can change at any time with the change of demand. Timely grasp of the market rhythm is the root cause of Dell's realization of no inventory sales, which benefits from the full use of the Internet.
Product cycle is the total time for developing a product. The development of any product requires some fixed costs, which are greatly related to the time spent. These fixed costs include equipment depreciation, the costs of most facilities and buildings, management and inspection costs, etc. If the product development time can be shortened from 10 days to 7 days, the fixed cost of this product will also be reduced. E-commerce can shorten the product cycle and produce more products with the same time or cost. Establishing electronic contact with large suppliers and customers can enable the company to send and accept purchase orders, issue bills and delivery notices in much less time than before. Sometimes, it can also enable suppliers and customers to participate in the determination of product technical parameters and accelerate product design and development. The Internet can also promote collaboration between different work organizations and regions and shorten the product cycle by expanding intra enterprise links.
The customer limit a salesman can bear is the number of customers he can visit in person or contact by telephone. When the number of customers increases, the sales force will also expand. On the contrary, using the network to conduct business activities can add new customers with little or no cost increase. This is because the sales function is performed by the network server at this time, not by stores or sales consultants fixed in a certain area. Its scope is only affected by the server's ability to respond to inquiries and orders. The Internet can also make some traditional sales associations run more efficiently. Because of the automatic order processing capability, the sales representative does not need to carry out time-consuming manual order processing. He can spend as much time as possible on establishing and maintaining customer relationships. The electronic catalog classification table provides more information than the paper table. Direct online marketing can shorten the reorder cycle. Enhance the ability of marketing consulting new products.
The Internet has no time and space constraints. It runs 24 hours a day, reaching out to every part of the world. Therefore, using the Internet to do business can be far away from the market that could not be reached by human sales or advertising sales in the past. For example, a plastic product expert working in a large manufacturer can simply click the keyboard to browse and find online manufacturers. A small supplier with only a few sales teams can also find such a large buyer. All it needs to do is put the company's business introduction online. It is impossible for the same small vendor to contact the small companies across the country, but through the Website Design To create a standard environment for small companies, he can find new profitable markets in the country and even around the world.
