Potential of electronic trading in complex supply chains: An experimental study

Electronically supported, innovative transaction processes may lead to efficiency gains and cost reductions enhancing the operational effectiveness. Electronic trade systems improve coordination between buyers and sellers and increase transaction efficiency by raising the operational effectiveness. An increased operational effectiveness compared to competitors may provide companies with a competitive advantage. Prerequisite for realizing efficiency gains is the appropriate process organization of electronic processes for a given market situation and thus the embedment into the given market scenario. The paper shows an exemplary market with small and medium enterprises (SME) with a comparatively high level of complexity and inefficiency where electronic trading could benefit participating enterprises. The benefits derive from improved transaction efficiency by using an embedded electronic trade system, which is shown in experiments by comparing traditional transaction processes with electronic processes in an SME market. The experimental results show major gains in transaction process efficiency for both buyers and sellers in electronic trading. The experiments further covered the support of multimedia elements like interactive media in online negotiations, as negotiations and personal communication are important for specific transaction types. The level of excellence was best for video support. (c) 2005 Elsevier B.V. All rights reserved.