Just like the retail trade sector, Manufacturing e-commerce includes online orders from customers. However, these orders include purchases from both traditional consumers and other domestic establishments of the same company that in turn manufacture, assemble or fabricate the product.
For example, electronic orders of components by an automobile assembly plant from a parts manufacturer owned by the same company would be counted as manufacturing e-commerce.
E-commerce can be conducted over the internet but also includes sales made using extranets, Electronic Data Interchange (EDI) networks, email or other online systems and payment may or may not be made online.
The price and terms of manufacturing e-commerce shipments can also be negotiated on these platforms.
Manufacturing businesses have embraced e-commerce because it streamlines the process of purchasing and selling components and products to other businesses.
The automobile assembly industry is a prime example.
The industry adopted “just-in-time” manufacturing years ago. Under this process, components needed to build cars are delivered to the assembly plant right when they are needed. This helps reduce the need for large parts inventories and warehouse space to store them.
To make this process efficient, the assembly plant maintains an electronic data interchange with parts suppliers to order parts exactly when they are needed.
