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Plan of the presentation

• What is EFNET
• What means e-commerce in reality
• How to practice e-commerce
• The benefits of e-commerce
• The program EFNET explained

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Plan of the presentation

• What is EFNET
• What means e-commerce in reality
• How to practice e-commerce
• The benefits of e-commerce
• The program EFNET explained

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Executive summary What is EFNET

• EFNET is a european initiative created by the
  CEC - with the involvement of the national
  federations - to encourage the development of
  more efficient business practices using
  e-commerce.
• EFNET 1 - concluded in September 2 000 - has
  produced results which have
• developed the awareness related to e-commerce
  issues in the shoe sector
• defined in broad terms what should be implemented

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Executive summary What is EFNET ( 2 )

• EFNET 2
• immediately followed EFNET 1
• is sponsored by the European Union and
  supervised by CEN
• has consequently a standardisation facet - known
  as FINEC - which must produce a CEN Workshop
  agreement (CWA)

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Executive summary What is EFNET ( 3)

• EFNET 2 has to develop operational e-commerce
  between european manufacturers and vendors of
  shoe worldwide
• without reinventing the wheel which means
• taking into consideration the existence of
  established e-commerce, generally national ones
• leveraging already done investments bringing
  added value to ERP, supply chain software, point
  of sales solutions within companies
• harmonising corporate and individual e-commerce
  solutions to create a network of compatible e-
  commerce services

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Executive summary What is e-commerce

• is not just an improvement of information
  systems
• is a mean to improve the business procedures of
  trading partners
• is used to bring benefits to all the partners
  using its solutions
• needs branch agreements
• is the new frontier of information systems
• adds value to existing information systems such
  as supply chain management or ERP

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Executive summaryWithout e-commerce

• Supply chain management and ERP brought tangible
  but limited benefits. Why ?
• Unavailability of accurate information,
• disconnected information systems
• lack of collaboration between trading partners
• explain why even vendor-managed inventory were a
  moderate success.

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Executive summaryWarnings

• Independent information systems must now
  communicate
• Only these companies which have a total control
  of their business partners can impose their
  proprietary solutions
• Branch agreements are otherwise necessary,
  preferably at an international level rather than
  solely national

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Executive summarySuccess factors

• ERP vendors interconnect their softwares.
• Independent Organisations involved in the
  development of e-commerce standards are
  progressing rapidly (UN, OASIS, AIAG, GCIP)
• Internet and the Web provide the solutions for
  the large scale deployment of e-commerce systems
  involving SMEs
• CEC is supporting the branch efforts for the
  development of harmonised e-commerce systems

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Executive summary Using e-commerce systems has
the following advantages

• accurate information, due to the feedback from
  the business partners
• interconnected, although independent,
  information systems
• organised collaboration between business
  partners by means of shared business procedures

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Executive summary
Ultimate goals justifying the use of e-commerce
systems

• increase sales,
• better margins for both suppliers and vendors
• create a better global organisation of the
  business partners relationship,
• streamline the flow of information,

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Executive summary
Ultimate goals justifying the use of e-commerce
systems ( 2 )

• organise decision support systems based upon
  more detailed and frequent information,
• improve
• administrative efficiency,
• logistics,
• cash flow,
• return-on-assets (ROA) performance.

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Executive summary Finally e-commerce is ... .
A new paradigm

• Shared business procedure instead of individual
  processing
• Each partner plays a role in an e-commerce
  scenario (order ? order response ? despatch adv)
• Information systems exchange - frequently
  -detailed information daily sales reports for
  example
• Respective plans (production, sales) are
  adjusted
• Production in excess is avoided (prod on demand)
• Lost sales opportunities are reduced

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Executive summary e-commerce - How to do it

• its proper use is depending upon the evolution
  of mentalities
• availability of software, e-commerce services
  and techniques which already exist.
• using standards does not mean uniformity and can
  be suited to each company strategy
• using standards does not mean unique management
  practices and marketing activities

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Executive summaryNuances

• EFNET is about global business practices for the
  shoe sector . but
• Each company can adapt these business practices
  in conformity with its own strategy
• E-commerce services can be implemented
  consistently by means of different solutions
• ? from real-time to file transfer
• ? bi (multi) laterally or through central servers
• ? distributed servers (group of users)
• ? traditional techniques first, then more
  sophisticated ones (intelligent agents, refined
  scenarios)

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Executive summary e-commerce - Must I use it ?

• It is better to produce and sell good products
  than to have an outstanding e-commerce system
  Obvious
• But producing and selling good products using a
  performing e-commerce system is a must
• Are others sectors using e-commerce systems ?
  Yes
• Am I forced to use e-commerce for trading ? If a
  dominating partner requires, yes or I loose it.
• Should I use e-commerce on a voluntary and under
  control basis ? Definitively Yes

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Executive summary
More on benefits
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Revenue Opportunities

• According to a market study done by Retailer
  Operating Data, Prism Partner Store Audits in
  1996, 8,1 of the end consumers do not find in
  stores the item they would like to purchase for
  short cut reasons (whilst the product is
  referenced). This represents 6,5 of the total
  figure of sales. Alternative purchases are
  observed (which does not mean client 100
  satisfied) in 3,4 of cases and 3,1 of sales
  are lost. Amongst the 3,4 of alternative sales,
  a high goes to an alternative supplier of
  products.
• However the higher cost is associated to consumer
  dissatisfaction and marketing efforts to gain new
  clients.

9 8 7 6 5 4 3 2 1
8,1 Out-Stocks
6,5 of Total Sales
3,4 Alt Purchase
3,1 Lost Sales
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Inventory opportunities
This picture from the US department of commerce
shows how inventories are established at diverse
locations
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Inventory opportunities

• Inventories are necessary for several reasons
• Uncertain demand
• Logistic constraints bulk shipments save money
• Inventories are demand buffers
• but
• The lack of pairing demand ??supply increases
  the volume of the inventories
• Shifting inventories from one place to another
  does not save money

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Inventory opportunities

• Efficient management of inventory buffers rather
  than congested value chains
• Upstream Reduction of supply process
  variability which result in more inventories by
  elimination of bottlenecks
• Downstream focus on the flow of supply to
  consumers, not to vendors
• Assortment opportunities can be improved
• Shelf productivity increased
• Handling of products easier

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From Coexistence to Collaboration

• Win-win instead of Win-lose
• Global reduction of inventories instead of
  shifting of inventories
• Consumer satisfaction is the priority for all
  the trading partners
• because it creates profit opportunities
• Global (inter-enterprise) process alignment
• Trust and commitment internal processes opened
  for integration across enterprises

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From Coexistence to Collaboration

• Favour long term relationship with trustable
  partners
• Be cautious in front of casual opportunities if
  they conflict with established partnership
• Participate in team inter-enterprise working
  groups
• Do not use proprietary processes / technologies
  they shifts cost-and-development burden onto
  trading partners who simply cannot face multiple
  way of trading electronically - Babel syndrome
• Use EFNET standards they are aligned with the
  open standards philosophy

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Executive people are asking for detailed
information concerning the program to which they
participate

• Objectives
• Benefits
• Priorities
• Partners
• Planning
• Deliverables

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EFNET Objectives

• Harmonization
• Interoperability
• Extension
• Use of Internet and XML
• between existing Electronic Commerce Systems in
  the European Footwear Sector

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EFNET Benefits

• Open electronic commerce solutions allied to
  Internet technology will lead to
• Improved availability of stock
• Improved stock turns
• Reduced stockholding
• Reduced processing costs
• Improved communications
• Enhanced customer services

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EFNET Priorities

• The main EC systems to realize in EFNET 2 are
• Product data transmission
• Sales reports and statistics
• Electronic Ordering
• Internet connection between
• retailers, buying groups and
• manufacturers in different countries

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EFNET Principle
_at_
Internet
Agents
W W W
Retailers
Buying Groups
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Involved Partners

• Belgium
• Denmark
• Finland
• France
• Germany
• Greece

• Italy
• Netherlands
• Portugal
• Spain
• United Kingdom

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EFNET Advantages

• The possibility to work electronically with any
  business partners
• The adoption of documented e-business procedures
  ..
• Which can be tailored to each company needs and
  to each working/marketing organisation
• The state of the art technology. Use of on the
  shelf products/softwares.

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Risk exposure to stay aside EFNET

• The difficulty to convince business partners to
  work electronically
• The cost of tailor made solutions
• The lack of flexibility in establishing new
  partnership
• finally resulting in isolation

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Existing EC systems
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EFNET Planning
Planning of the Project
Work-Package 1 - Business Model Work-Package 2 -
Standards Work-Package 3 - Specification of the
Technical Architecture Work-Package 4 - Mapping
Service Work-Package 5 - Application Testing
Tools Work-Package 6 - Evaluation Work-Package
7 - Project management
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EFNET Planning
Planning of the Project
09/00
02/02
01/01
04/01
08/01
11/01
Work-Package 1 Work-Package 2 Work-Package
3 Work-Package 4 Work-Package 5 Work-Package
6 Work-Package 7
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Deliverables
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Conclusion
Are you convinced ? Join EFNET Are you
hesitating ? Tell your national expert why Thank
you for attending