Evidently, one of the most significant effects of the internet revolution is its impact on business. Nowadays, individuals and organizations are increasingly using internet technology to enhance their business under the contemporary context of e-commerce. Electronic commerce is increasingly helping individuals and organizations retain consumer attention and expand their markets through business-to-business (B to B) or Business to Consumer (B to C) transactions on the internet. Moreover, e-commerce has become an important form of paperless exchange of business information through electronic data interchange, electronic money transfer, emails, and others (Zacharia, 2009).
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Among other things, e-commerce has benefitted companies through the reduction of cycle time, facilitation of customer support, and empowerment of employees. Perhaps the most significant impact is the reduction of cycle time in production lines. When e-commerce is incorporated into the business, the cycle time reduces significantly. The term cycle time refers to the total amount of time that takes customers to place orders and receive the goods or services requested in the orders (Zacharia, 2009).
E-commerce refers to the electronic device that internal or external parties in a company use to communicate with the aim of reducing the time needed to market. It is also used to reduce the amount of time between the inception of a business and its implementation in the organizational production process. Thus, e-commerce reduces cycle time by decreasing the carriage and shrinking the costs involved. In addition, enhanced communication through interne tallows the customers to interact directly with the company, obtain immediate responses, and make orders on the spot.
As such, the company obtains responses, suggestions, and requests from the market, which enhances its ability to incorporate new ideas that are likely to reduce the time needed to design or redesign products and services in order to meet the prevailing market needs. Moreover, the enhanced communication speed allows the company to increase the speed of its operations, and the flow of funds since the relationship between the company and its customers, suppliers, and other parties is reduced significantly (Zacharia, 2009).
Thirdly, e-commerce makes use of technologies rather than humans in processing transactions between the company and other parties. As such, it provides a 24/7 platform for transactions, which removes the need for customers to stay at the business premises or outlets trying to meet employees when placing orders, requests, and making suggestions.
As such, the working time of the administrators is reduced significantly through the automation of the corporate production system. A well-designed e-commerce platform is able to record transactions automatically and keep a long record of all the transactions, thus reducing the time needed for human administrators to go through the work. Moreover, as a well-designed e-commerce platform has a low chance of detecting and removing errors in the transactions (McKeown, 2010). Therefore, it reduces the chances of making losses or losing time trying to correct errors. In the end, the company’s production time is reduced significantly.
Dell Computers Company is one of the best examples of organizations that have effectively applied e-commerce platforms to reduce their production cycle times. Since 2000, the company implemented the SCM platform, a form of e-commerce that allows companies to adopt the direct-sales model (Zacharia, 2009). The model is a demand-driven supply chain in which the conventional build-to-stock model is replaced with a customer-friendly approach that allows customers to deal directly with the company on the internet (Short, 2002). Using the model, the company has been able to reduce the cost of inventories, production cycles, as well as the overall production costs (Dell Computers Corp, 2002).
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Dell Computers Corp. (2002). FY 2001 Annual Report on 10-K. Round Rock, TX: Dell Inc.
McKeown, P. G. (2010). Information Technology and the Networked Economy, Course. Technology Publishing, Boston, MA.
Short, D. (2002). Dean’s forum – convergence. Mid-American Journal of Business, 17(1), 254-259.
Zacharia, Z. G. (2009). The evolution and growth of production in supply chain management. Thousand Oaks, CA: Sage Publications.