B2B e-commerce matrix

The B2B e-commerce matrix classifies different types of B2B marketplaces: There are two types of goods:

• Operating inputs, these (indirect) goods are often called MRO (Maintenance, Repair and Operations).
• Manufacturing inputs, these are the industry specific (direct) goods that are used for the final product that is delivered to customers.

The second dimension in the matrix is how the goods are purchased from suppliers:

• Systematic sourcing, this form of sourcing involved negotiated contracts with qualified suppliers. Contracts are usually longer term and on mutual trust, leading to a long term relationship between buyer and seller.
• Spot sourcing, Firms usually go for spot sourcing to fulfill an immediate need at the lowest possible price. Commodities (such as oil, gas and iron) are typically purchased via spot sourcing.

Based on the above four dimensions the following types of B2B e-market places can be identified:

• MRO hubs are horizontal e-market places with long-term supply relations for Operating inputs
• Catalog hubs sell Manufacturing inputs through a systematic sourcing system. Goods sold are usually tailored to meet the purchasing company's needs.
• Yield managers are horizontal e-market places for Spot sourcing of Operating inputs. Ther are most valuable for operating inputs that display high fluctuating in price or demand. For example see http://mondus.com
• Exchanges are closely related to more traditional commodity exchanges. They are used primarily for the selling of commodities that are used in the production process. For example see http://e-steel.com

Part of: M8-S4 - Reading - Strategies for E-Business - Chapter 10 - Choosing the appropriate strategy for interaction with suppliers