e-Hubs

Harvard Business Review article

1. Kaplan & SawhneyKaplan & Sawhney
e-Hubs: The New B2B e-Hubs: The New B2B
Marketplaces Marketplaces
Harvard Business Review, Harvard Business Review,
May/June 2000May/June 2000
Prepared by Wesley ShuPrepared by Wesley Shu

2. Chapter 4 2
Business-To-Business Business-To-Business – B2B – B2B (Continued)(Continued)
►Electronic ExchangesElectronic Exchanges areare E-marketplaces in E-marketplaces in
which there are many sellers and many buyers.which there are many sellers and many buyers.

3. Chapter 4 3
Inputs – What businesses buy?Inputs – What businesses buy?
►Operating inputsOperating inputs
maintenance, repair and operating (MRO) goodsmaintenance, repair and operating (MRO) goods
►Manufacturing inputsManufacturing inputs
raw materials and components that go directly raw materials and components that go directly
into the products or process into the products or process

4. Chapter 4 4
Sourcing – How they buy?Sourcing – How they buy?
►Systematic sourcingSystematic sourcing
Regular or recursive sourcing. Each cycle is Regular or recursive sourcing. Each cycle is
similar in quantity, content, routing, etc.similar in quantity, content, routing, etc.
►Spot sourcingSpot sourcing
One-shot sourcing. IrregularOne-shot sourcing. Irregular
fulfill an immediate need at the lowest possible fulfill an immediate need at the lowest possible
cost.cost.

5. Chapter 4 5
MRO Hubs (systematic operating)MRO Hubs (systematic operating)
►MRO: maintenance, repair & operatingMRO: maintenance, repair & operating
►concentrate on goods with low value. concentrate on goods with low value.
►The transaction cost is relatively higher.The transaction cost is relatively higher.
►Di-sintermediate - bypass existing Di-sintermediate - bypass existing
middlemen in the channelmiddlemen in the channel
►E.g., E.g., mro.commro.com (IBM subsidiary) (IBM subsidiary)

6. Chapter 4 6
Catalog HubsCatalog Hubs
►Systematic, manufacturingSystematic, manufacturing
►Industry specific (manufacturing inputs are Industry specific (manufacturing inputs are
moer specific than operating ones.) – the moer specific than operating ones.) – the
only difference from MRO Hubsonly difference from MRO Hubs

7. Chapter 4 7
Yield ManagerYield Manager
►Spot, operatingSpot, operating
►Good in the case of high price and demand Good in the case of high price and demand
volatility andvolatility and
►Things not easy to liquidate or acquire, e.g., Things not easy to liquidate or acquire, e.g.,
huge fixed asset, huge fixed asset, human resourceshuman resources..

8. Chapter 4 8
ExchangesExchanges
►Spot, manufacturingSpot, manufacturing
►Exchange input parts to manage peaks and Exchange input parts to manage peaks and
ebbsebbs
►First, establish relationships among First, establish relationships among
manufacturersmanufacturers
►Exchange parts, especially materialsExchange parts, especially materials