Successful Electronic Commerce Implementations

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Successful Electronic Commerce Implementations
June 7, 2000Harold L. Frohmanhfrohman_at_fallschurc
h.esys.com
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Agenda

• Introduction
• Successful Raytheon EC Implementations
• DoD EMALL
• Industrial Prime Vendor (IPV)
• everythingaircraft.com
• Data Exchange Considerations
• Mechanisms
• Security

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What is EC?
Electronic Commerce

• Business conducted electronically over the
  Internet
• Business to Consumer (B2C)
• Most prevalent - consumer uses the Internet to
  buy goods from a business
• Examples include Amazon.com, Etoys, and Lands
  End
• Business to Business (B2B)
• Behind the scenes - business uses the Internet to
  buy products from another business
• Examples include automobile suppliers and GM,
  Ford, Chrysler

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Successful EC Implementations

• Department of Defense (DoD) EMALL

• Industrial Prime Vendor (IPV)

• everythingaircraft.com

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What is the DoD EMALL?

• An Internet-based government requisitioning and
  ordering system (http//www.emall.dla.mil)
• Mandated by 1999 DoD Appropriations Act to be
  single entry point for electronic purchase of
  goods within DoD
• Three Corridors
• Parts Supplies - electrical components, oil,
  clothing, tools
• Information Technology Corridor - computers and
  related equipment
• Training Corridor - classes, seminars
• Under Development

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System Capabilities

• Shop Multiple Catalogs with a Wide Range of Items
• Military depot items
• Commercial vendor catalogs
• Visibility of inventory levels
• Business rules can be tailored by contract
• Regionalized shopping

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EMALL Architecture
Sources of Supply Catalog Databases
SEARCH ENGINE Server
Registered Customer
Vendor Hosted Catalogs
DoD Hosted Vendor Catalogs
ISP
status
DepotsVendors
Homepage ORDER MODULE Server
order
Credit card validation and charges

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Features

• Single Ordering Experience
• A single shopping cart for all items
• Two Payment Methods
• Government Purchase Cards
• Interfund billing - fund cite/code
• Shopper - Orderer Concept
• Shopper
• locates items needed
• fills the shopping cart
• Orderer
• reviews the shopping cart
• authorizes and pays for order

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Industrial Prime Vendor (IPV)

• Web-based Supply Chain Management
• Supplies and controls items needed to repair or
  upgrade military equipment
• Orders and ships parts directly to equipment
  location
• Combines Web, EDI, and barcodes
• IPV Benefits Include
• Reduced inventory
• Increased operational efficiencies
• Order-to-ship time reduced from 30 days to 1 day
• Availability rate increased from 81 to 99.9
• Reduced material costs
• Items physically inspected
• Fully automated billing and invoicing system

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Overview

• Business-to-Business E-Commerce
• Specialty After-market Aircraft Parts
• Poised for Domestic and International Markets
• Buyer and Supplier Relationships

Target Markets
Unique
Suppliers Existing IPV Vendors Raytheon Aircraft
Co. (RAC) New major vendors and OEMs
Buyers Fixed Based Operators Overhaul and Repair
Stations
- Not an Inventory Locator- Suppliers parts
prices are listed on the Web- Differentiates
between different buyers- System is completely
automated and paperless
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Data Exchange Considerations

• Mechanisms
• electronic data interchange (EDI)
• eXtensible Markup Language (XML)
• Security
• digital signatures

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Data Exchange Mechanism - EDI
Electronic data interchange (EDI)
- computer-to-computer exchange of routine
business information using publicly available
standards
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EDI Example
810 Invoice DATE 6/7/2000 ORDER
DATE 5/28/2000 INVOICE 1001 CUSTOMER
ORDER P89320 BILL TO Harold Frohman 7700
Arlington Blvd Falls Church, VA 22042 SHIP
TO Harold Frohman 7700 Arlington
Blvd Falls Church, VA 22042 CORRESPONDENCE
TO Accounting Dept. C.P. Jones (703)
560-5000 Quantity Unit Supplier Description
Unit
Code
Price 1 EA P450 128 MB PC-100 DIMM
150

• GSIN012345678087654321000607
• 2219000000001X3050
• ST8100001
• BIG0006071001000528P89320
• N1BTHarold Frohman33092D1
• N3770 Arlington Blvd.
• N4Falls ChurchVA22042
• N1STHarold Frohman33092D1
• N3770 Arlington Blvd. Mailstop A310
• N4Falls ChurchVA22042
• PERADC.P. JonesTE7035605000
• IT11EA150VCP450
• TDS150
• SE120001
• GE1000000001

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EDI

• Advantages
• In use for 15-20 years
• Well developed standards and EDI software
  products
• Large EDI infrastructure, including
  communications (i.e., EDI VANs) and service
  bureaus available
• Disadvantages
• Output not human readable
• Difficult and lengthy time required to develop or
  modify standards
• Standards rigidity slows adoption of new business
  rules
• High fixed costs
• Not conducive for displaying data on the Web

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Data Exchange Mechanism - XML
eXtensible Markup Language (XML) - technology
that addresses the exchange of data in a standard
format and the standardized data display using
the Web
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XML Example
CURRENCYUSD ADDTYPEbillship
Harold
Frohman ORDER17700 Arlington Blvd.
Mailstop A310
Falls Church
Virginia
22042 es
128 MB PC-100
DIMM 1
150
CARDTYPEVISA Harold
Frohman
4716000000000000
01/01

• GSIN012345678087654321000607
• 2219000000001X3050
• ST8100001
• BIG0006071001000528P89320
• N1BTHarold Frohman33092D1
• N37700 Arlington Blvd.
• N4Falls ChurchVA22042
• N1STHarold Frohman33092D1
• N37700 Arlington Blvd. Mailstop A310
• N4Falls ChurchVA22042
• PERADC.P. JonesTE7035605000
• IT11EA150VCP450
• TDS150
• SE120001
• GE1000000001

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XML

• Advantages
• Human readable
• Presents data in a hierarchical relationship or
  tree diagram
• Easier to internally manage data
• Uses existing Internet connection to transfer
  data
• Separates document data content from its display
• Disadvantages
• Standards and technical specs still in flux
• No national or international groups formed to
  develop universally accepted XML standards
• Limited commercial product availability

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Security

• Requirements
• Authentication Ensure that the parties in a
  transaction are who they say they are
• Data Integrity Ensure message content isnt
  altered
• Message Confidentiality Ensure no one else reads
  message
• One solution Digital signatures
• Based on mathematical theory - uses encryption
• Analogous to digital fingerprint of a message
• Verifies message origin and senders identity
• Affixed to electronic message
• Differs from electronic signature - digitally
  captured handwritten signature

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Security (cont.)

• Digital certificates strengthen authentication
• Analogous to notary seal or other document (e.g.,
  drivers license) that requires accreditation
  from a formal authority
• Electronic credential that positively identifies
  entity and associated public-private key pair
  needed to read that entitys encrypted messages.
• Managed by a certificate authority (CA) that
  confirms user identify upon applying for
  certificate

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Security (cont.)

• Public Key Infrastructure (PKI) used to store and
  manage the encryption keys and the CAs
• System that encompasses the technology,
  infrastructure, and practices needed for
  encryption and digital signatures on a large
  scale