October 18th, 2016

How Manufacturers have Feared Adopting Technology and How They Have Learnt to Embrace Technology for Selling Products Online

How Manufactures have feared adopting technology - Kobster.com
Historically, manufacturers have avoided the adoption of Web technology, especially business-to-business (B2B) eCommerce, into their business plan. Manufacturing is known for its complexities and unique intricacies in planning, workflow, distribution and communications. Until recently, cost effective technology was not available to help manufacturers grow online.

However, times are changing. Due to improvements in technology and the adoption of technology, manufacturers will begin embracing Web technology as part of their growth strategy. Over time, making this move will slowly become a requirement for manufacturers to stay competitive.

“Based on Gartner and Forrester Research, the B2B eCommerce industry is valued at roughly $780 billion today. According to this research, Gartner and Forrester are expecting the B2B eCommerce industry to increase in value to roughly $1.13 trillion by 2020. Other research firms are estimating numbers as high as $1.9 trillion.”

Avoiding the use of Web technology in the past has been understandable keeping things that influenced online buying over the years. Every manufacturer has unique processes and modelling these processes with technology was not only difficult, it was time-consuming and expensive. It was common for manufacturers to shy away from Web solutions, because they expected it to be a costly headache that could negatively impact customer relationships.

Today, however, the opposite is true. With these challenges in mind, Online B2B eCommerce companies, such as Kobster, have solved these problems with flexible systems that mould to the needs of manufacturers, improve customer relationships, and increase efficiency and the bottom line. Let us know see how B2B eCommerce can benefit a manufacturer of any scale, be it Small, Medium or even Large scale units.

Pliable systems that flex to the manufacturer’s needs

Each manufacturer has special use cases. Their unique workflow, the configuration of products, or their complex pricing schedules made it difficult (or impossible) to do business online. Today’s technology is constructed with these challenges in mind. The solutions are built with a foundation to support the manufacturing industry, and the systems are flexible enough to adapt to the specific use cases of the manufacturer.

For example, manufacturers maintain a variety of relationship types. The buyers may have differing negotiated rates, some buyers only purchase a fraction of the manufacturer’s offering, or some buyers may purchase on behalf of other customers. Each of these use cases can be very unique and custom for each individual manufacturer. With B2B eCommerce technology, the buyer’s account is based on information that resides in the manufacturer’s personalised accounts. By using pre-existing data in the data base to understand who the buyer is, the Web system will know which products to display at which prices. Additionally, if needed, buyers can purchase on behalf of their own customers. By maintaining multiple ship to addresses, payment options and recipient information within their account, the buyer information will be easily managed by the B2B eCommerce companies, while being saved into the database.

Build Customer Relationships

Today, most people are comfortable using Web technology for research, purchasing and account management tasks in their personal lives. It’s become a standard. Buyers are also adapting to the process of doing business on the Web. Manufacturers can benefit from this trend by giving their customers Web-based tools to perform their job responsibilities online. By giving customers access to a Web portal where they can manage their own accounts, research products and place orders online, manufacturers are saving time and money while increasing positive customer relationships.

Today’s technology allows the manufacturer to give their customers specific levels of access to account data. This doesn’t mean that their customers will suddenly have access to everything. Instead, the manufacturer can develop and implement a permission plan to offer access to only the most appropriate information. Perhaps customers can manage past invoices, see their pending orders, research product information, download marketing and sales documents (POs, DRs & Invoices), or even manage their own payment options. By offering these kinds of tools, manufacturers will be keeping buyers happy by letting them work comfortably on their own terms.

Increase efficiency and the bottom line

In the recent times, if customers are happier doing their purchases online, why not give them tools to buy your manufactured goods in a similar manner? Imagine a buyer’s frustration when required to call their sales representative of your Factory Outlet just to update contact information or ask about inventory levels/availability of a particular product that is manufactured in the unit. Buyers, just like manufacturers, desire a more efficient workflow that increases performance. (Workflow of buyers- Buying)

When customers call their sales representative in the factory outlet to learn about a product, they only do so because it’s the only option. By giving customers access to product information online (e.g., inventory levels, related products, configuration options, etc.), you are giving them the self-service tools to improve their performance and their own efficiency.

This results in sales calls focused around relationship-building and the art of selling rather than simply sharing information.

Based on market research, B2B eCommerce will dwarf the success of buisness-to-consumer (B2C) eCommerce and the market will grow rapidly. By adopting B2B eCommerce now and making wise decisions in Web technology investments, manufacturers will stay ahead of their competition while offering solutions that satisfy customer desires and increase efficiency throughout their organization.

October 13th, 2016

The Impactful future of the “Reverse Supply Chain” in B2B e-commerce Industry

Reverse Supply Chain - Kobster
In recent years, an e-commerce company has probably spent a lot of time and money fine-tuning its supply chain. Soon the company might need to give just as much thought to it’s reverse supply chain. What is a reverse supply chain? It’s the series of activities required to retrieve a used product from a customer and either dispose of it or reuse it. And for a growing number of manufacturers, in industries ranging from carpets to computers, reverse supply chains are becoming an essential part of business.

In some cases, companies are being forced to set up reverse supply chains because of environmental regulations or consumer pressures or corporate liabilities/policies in case of B2B e-commerce transactions. Beginning in June 2011, for example, The Indian Union precisely the Rajya Sabha, will require tire manufacturers operating in the Indian Sub-continent to arrange for the recycling of one used tire for every new tire they sell. In other cases, companies are taking the initiative, seeing opportunities to reduce their operating costs by reusing products or components. For instance, Kobster reuses its single-use packing corrugated boxes after the package has been delivered to the client by requesting them to return the boxes, if they’d like to contribute to the environmental sustainability. Finally, some companies are using reverse supply chains as integral parts of new businesses.

Whether a company is establishing a reverse supply chain by choice or necessity, it will face many challenges. It will have to educate customers and establish new points of contact with them, decide which activities to outsource and which to do itself, and in general figure out how to keep costs to a minimum while discovering innovative ways to recover value. It may also have to meet stringent environmental standards.

Among other factors that would influence the reverse supply chain in times to come, some of the most impactful are “green” corporate and government policies, product Innovation life cycles, and fuel prices & transportation. Technology can be a big benefactor in bringing efficiencies to the reverse supply chains by providing capabilities to optimize over multiple channels, using secondary markets to boost brand growth, concentrating on net recovery optimization, and using real time data to influence supply chain decision making. When using secondary markets such as an online B2B marketplace like Kobster, a structured and organized reverse supply chain will safeguard brand integrity of manufacturers and channel partners.

A large distributor was disposing off a large portion of his inventory annually due to restrictive RTV (Return To Vendor) policies. Here, the inventory has limited perceived value once returned since the products were either private label, made to order (MTO), or had exhausted shelf lives.

Kobster also proposed an added channel of sales approach to resell the inventory on an online marketplace. This solution enabled the business to liquidate such inventory directly to other businesses for reselling the residual value of inventory, and to those businesses who still perceive value in the inventory for end consumption improvements. The use of technology has enabled multi-channel opportunities to increase lifetime value of products over an online marketplace. In this case, inventory will not be disposed off to land fills without realizing its intrinsic residual value. A huge percentage of this inventory has now gained recovery value. A renewed company outlook toward regulatory compliance and sustainability will improve its image, while profits will be added to the bottom line.

Technology can bring about radical improvements to the reverse logistics processes by improving visibility and real time decision making ability, net recovery optimization, and utilization of backhauls with RTV inventory, all the while lowering costs and building efficiencies into the system. In the end, a reverse supply chain expert will have to focus on brand protection, streamlining the reverse supply chain, sustainability, and adequate material handling practices.