E-business in B-2-B environment: The costs and potential of E-partnership models

E-business offers significant opportunities for small and medium-size enterprises. The e-partnership models can be applied both in procurement and sales. The partnership model in sales means that several companies co-operate together such that they sell their products together to customers. The customer sees them as one virtual company. Accordingly, companies can be united in procurement to do their purchasing together from the same suppliers. The supplier sees them as one virtual customer. The e-partnership models can be organised logistically in several different ways. In the study, five different e-partnership models in sales and three in procurement were examined. The costs of each model were calculated with an Activity-Based Costing method, which takes the size of the deliveries into account. This method has been developed at VTT. The method enables the examination of the effect of volumes of the deliveries and, on the other hand, the impact of partnership on the volumes. Each of these so-called virtual models was compared to a traditional way of operating, in which each company is operating alone.