F2b2C as a New E-Commerce Business Model

Introduction

Traditional manufacturing business models deployed the push approach in production. Perspectives of producing for sale are the key drivers of this approach. Through the approach, manufacturing organizations employed salespersons to persuade people to consume their products to satisfy consumer needs as understood by manufacturing organizations. This strategy ensured that customers were not involved in product planning and design assessment. Manufacturing organizations then began to explore ways of obtaining customer responses and perceptions of their products and services. This move led to initiatives of conducting customer surveys to gather views on utility of products. The views were then incorporated in new designs or in re-engineering of the existing designs.

Because of time limitation between garnering of the customer data and subsequent utilization of the data in designing products to meet customer requirements, this approach was not suitable for mass customization. Real-time platforms for exchanging information between organizations and customers posed a major challenge in mass customization. However, this challenge was solved following the emergence of Web 2.0 applications, which made it possible for technologies such as B2B and B2C to flourish in general organizations. A more recent technological development in the manufacturing sector is the F2b2C. This paper discusses this new e-commerce business model. It also identifies its current and future roles in manufacturing organizations.

The F2b2C Technology

Strategies for enhancing competitive advantage of organizations in a global business economy that is characterized by customers who are highly conscious about the capacity of products to satisfy their own specific needs and tastes call for the adoption of mass customization in manufacturing organizations. In such an economy, “e-commerce along with mass customization production will be adopted by many companies as the primary style of manufacturing” (Umapathy and Halbe 121). This finding suggests that e-commerce has the capacity to lead to transformation of manufacturing organizations. This change may include transformation in areas such as planning, management of supply chains, and even in the automation of production processes. One of such technologies is the F2b2C e-business commerce.

F2b2C (factory-to-business-to-consumer) e-business commerce helps in linking customers (C) and the manufacturing organizations (F) through an internet-enabled communication platform. The operation of F2b2C e-business commerce has a link with B2B e-commerce platform in that it entails online 2-way communication between a manufacturing organization and customers. However, in F2b2C e-business commerce, consumers utilize the internet to enhance direct communication with manufacturing organizations. They provide their own specifications for products. The manufacturing organization then utilizes this information to make products that meet the customized and personalized requirements and specifications. It then ships the products to the consumers while using the internet as the mediation platform. In this context, the business operates only as a disintermediation for linking customers and the factory.

A good example of operation of F2b2C e-business commerce is a case of a person living in California whereby he or she orders for products overseas. For instance, one can demand the manufacture of a shoe in a Chinese-based company by ordering it online. In the order, the customer provides specification of a shoe (heel size, color, decorations, and material among other details). Having made the payments for the shoe and shipping online, the company manufactures the shoe and ships it to California. Therefore, through F2b2C e-business commerce, people will cease from moving from one retail outlet to another in search of products that meet their tastes and preferences. They only need to establish contacts with manufacturing organizations and make orders for personalized and customized products.

Role of Technology in Business

The F2b2C e-business commerce can play important roles in the modern and future manufacturing and online retail organizations by minimizing the costs associated with supply chains such as distribution costs for manufactured products. Cutting costs means higher returns on investments. It creates the possibility for both current and future organizations to cut the selling prices for their products while remaining profitable. This strategy can incredibly increase the competitive advantage of organizations. To examine the roles of F2b2C e-business commerce in the current and future organizations, the next section discusses its applicability in Amazon.com and injection molding organizations.

Current Roles

The case of Amazon.com may reveal the benefits of adopting F2b2C e-business commerce in the current online business models that are inspired by B2C and B2C. Amazon.com started its online marketing business through specialization in book selling. The company then realized inadequate leadership of the industry especially in stocking books that were out of print. “By converting his garage into a warehouse, Amazon.com founder Jeff Bezos was able to establish Amazon as an online bookseller while focusing on six core values he identified as customer obsession, ownership, bias for action, frugality, high hiring bar, and innovation” (Cosper Para.2). When online selling of books picked up, the company expanded into selling other products including DVDs.

The company uses two types of e-business commerce: B2B and B2C. For the business-to-consumer commerce, Amazon.com organizes its e-business around organizations (sellers) and consumers (individual buyers). B2C brings together an immense number of purchasers who make millions of transactions on a daily basis with a number of organizations (sellers). Since Amazon.com is an online retailer, B2C works best for it. Therefore, the company has to ensure cute management of the large number of transactions while maintaining security, confidentiality, and integrity of the business information, which is shared by the company and its consumers. This requirement has the impact of making B2C e-business for Amazon.com an incredibly complex and difficult task since every item bought by a customer must be shipped and be delivered at the right time with optimal security.

Through B2B e-commerce strategies, Amazon.com organizes its online retailing business such that the sellers and buyers are business organizations. From the sale side of B2B, Amazon.com deploys the e-commerce strategy to boost its sales level with reduced expenditure of ads. From the buy side model, the company obtains the products it needs from suppliers in an electronic manner. Both strategies entail massive transfer of information between consumers, Amazon.com, and the suppliers.

A major drawback of the B2C and the B2B business model adopted by Amazon.com is its dependency on stocking books. Although the company was established following the identification of a business gap (substituting books that are out of print by the existing book suppliers), stocking of books that are currently on print may also result in the accumulation of dead stock. The company needs to incorporate an additional F2b2C e-business commerce.

Currently, the company does not order books from printers depending on the emerging consumer needs. The company can establish direct links with printers so that it can stop stocking books altogether instead of indicating in its website that a certain book is out of stock. Rather, it can utilize the order and specifications made by its customers to place requests for printing of a certain number of books and then organize for their shipment directly from printers to customers without passing through the company’s stores through its normal B2B and B2C e-commerce approaches. This strategy can tremendously reduce handling costs for the company.

Future Roles

Several customization systems for products such as Dell.com and Cannodale.com are available at the disposal of manufacturing organizations such as injection molding companies. However, these systems provide inadequate online navigation, information retrieval, and customization of products in manufacturing organizations that operate in an environment of sophisticated spaces for product alternatives and/or product information processing over the internet (Batanov 124).

For manufacturing organizations to succeed, they need to possess the capability of identifying various customer needs and/or engage in the production process that enhances both quick and low-cost manufacturing of products that meet customer personalized specifications. Achieving these goals requires “a collaborative product development involving all life cycle issues of product fulfillment” (Batanov 125). By achieving collaboration in the product development, F2b2C e-business commerce can aid in the integration of various web-based services that are developed to enhance the interaction of different partners and players in the production process. This role is perhaps more elaborated when discussed in the context of a manufacturing organization such as an injection molding company.

Injection molding involves manufacturing of plastic items by injecting molten plastic into cavities that take the inverse shape of the desired final product. With the increasing need of an organization to produce with speed and deliver the packaged products in a plastic container in the global markets, injection-molding companies in the future will face the challenges of high demand for customized and cost effective products that require manufacturing in the shortest time possible.

This move will call for more real–time collaboration between various players in the production process. The design of an injection-molded part begins with the analysis of customer specifications. The design team then designs the product and sends the design to the mold maker. The mold maker uses the plan to produce a design for a mold that meets the specifications of the design. After fabrication, the mold is shipped to the injection molding company, which then uses it to manufacture the customized products demanded by customers.

The above design process does not follow a single line of command since changes in design are always inevitable. While the customer may not alter the specification once issued, the product designer may identify manufacturability constraints and seek to add or subtract the specifications. However, the designer must collaborate with the client to ensure that the changes will be consistent with the needs of the customer. A similar interaction also exists between the mold designers, fabricators, and the product designer. This means that the final production of a customized plastic is arrived at after several iterations and decision algorithms. To realize these concerns in a cost effective and speedy manner, F2b2C e-business commerce will play important roles in injection molding organization in the future.

F2b2C e-business commerce can provide the disintermediation required in making highly customized plastic products through injection molding. Through the technology, the designer, the customer, the mold designer, and the mold fabricator operate as if they are on the same design table although they are geographically disjointed. The F2b2C e-business commerce acts as the design room. The customer is housed in the application layer, which also houses other parties collaborating in the production of the customized product. This layer is then merged with an application server. The server principally links traditional approaches to design.

Where knowledge repository is incorporated as the third layer, it will foster encoding of vital processes together with product information. Through F2b2C e-business commerce, middleware integrations of these functional layers for a web-based platform configured for ‘to-order’ become possible via the internet. Consequently, customers demanding customized injection-molded parts will be able to obtain the products at low costs and with high delivery speed.

Conclusion

Manufacturing organizations conventionally sought to increase their competitive advantage by pushing a large number of products into the market. However, this trend changed in the wake of globalization. Organizations began to focus on products, which only meet customer needs in terms of fulfillment of their utilities. This concern prompted the emergence of B2B and B2C e-commerce technologies. Amazon.com was one of the companies that adopted these technologies with immense success in its online book sales business. However, to minimize the costs associated with holding stocks (waiting customers to make orders that meet the description of various products held in the stocks), F2b2C e-business commerce encompasses a new e- commerce technology that can help to push the success of Amazon.com even further.

F2b2C e-business commerce can also increase the ability to injection-molding organizations to produce customized and personalized products at high speed while delivering them quickly. In the process, such organizations are able to withstand competitive forces in the injection-molding industry by reducing the costs of production.

Works Cited

Batanov, Eloranta. “Advanced Web Technologies for Industrial Applications.” Computers in Industry 3.2(2006): 123-125. Print.

Cosper, Aurthe. Description of how Amazon uses e-business and e-commerce for B2B and B2C, 2012. Web.

Umapathy, Nanda and Hodge Halbe. “Development of a Framework for Web-Based Product Platform Customization.” ASME Journal of Computing and Information Science in Engineering 5.2(2008): 119-129. Print.