Page 278 - Electronic Commerce

Business-to-Business Activities: Improving Efficiency and Reducing Costs

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FIGURE 5-11 Passive RFID tag

Creating an Ultimate Consumer Orientation in the Supply Chain
One of the main goals of supply chain management is to help each company in the chain
focus on meeting the needs of the consumer at the end of the supply chain. Companies in
industries with long supply chains have, in the past, often found it difficult to maintain
this customer focus, which is sometimes called an ultimate consumer orientation. Instead,
companies have directed their efforts toward meeting the needs of the next member in
the supply chain. This short-sighted approach can cause companies to miss opportunities
to add value in subsequent steps of the chain.
One company that pioneered the use of Internet technology to go beyond the next
step in its value chain is Michelin North America. Michelin has a highly respected brand
name and reputation in the tire business. However, most consumers rely on local tire
dealers to make specific recommendations when they need replacement tires for their
vehicles. Michelin spends a great deal of money on direct advertising to its ultimate
consumers. This advertising is directed at maintaining Michelin’s powerful brand and
convincing the consumer of the value of Michelin tires. The advertising and brand
building effort can be wasted, however, if the consumer goes to a local tire dealer who
recommends another brand.
Michelin launched an online business initiative in 1995 called BIB NET (after the
company’s famous Michelin Man mascot, whose name is Bibendum). The goal of this
initiative was to sell more Michelin tires to consumers, but the initiative was directed at
Michelin’s tire dealers, not the ultimate consumers. BIB NET was an extranet that allowed
tire dealers to access tire specifications, inventory status, and promotional information
about Michelin products through a simple-to-use Web browser interface. Before BIB NET,

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