Lesson 15: The Internet

What Is the Internet? | The New Business Model | Intranets | Extranets | E-Commerce |

Technology Implications of Internet Applications

Extranets

What Is an Extranet?

An extranet allows you to extend your company intranet to your supply chain.

Extranets are an extension of the company network—a collaborative Internet connection to customers and trading partners designed to provide access to specific company information, and facilitate closer working relationships.
The way you extend your company network to your extranet partners can vary. For instance, you can use a private network for real-time communication. Or you can leverage virtual private networks (VPNs) over the Internet for cost savings.
You can also use a combination of both. However, it’s important to realize that each solution has different benefits and security solutions.
A typical extranet solution requires a router at each end, a firewall, authentication software, a server, and a dedicated WAN line or VPN over the Internet.

Typical Extranet Applications

   - Supply-chain management
   - Customer communications
   - Distributor promotions
   - Online continuing education/training
   - Customer service
   - Order status inquiry
   - Inventory inquiry
   - Account status inquiry
   - Warranty registration
   - Claims
   - Online discussion forums

Extranet applications are as varied as intranet applications. Some examples are listed above. Extranets are advantageous anywhere that day-to-day operations processes that are being done by hand can be automated. Companies can save time and money in development, production, order processing, and distribution. Improving productivity increases customer satisfaction, which drives business growth.

Example: Supply Chain Management

The traditional business fulfillment model is linear, with communication flowing from supplier to manufacturers in a step-by-step process. Communication does not transcend down the supply chain resulting in inefficiencies and time consuming processes.

Effectively managing the supply chain is more critical now than ever. Customers today are looking for a total solution—they want ease of purchase and implementation, they want customized products, and they want them yesterday.

Today, in order to better service and retain customers, companies realize that they need to improve their business processes in order to deliver products to customers in reduced time. One effective way to do this is to improve the system processes that make up the overall supply chain.

With an extranet, companies can:

   - Enable suppliers to see real-time market demand and inventory levels, thus providing them with the      necessary information to alter their production mix accordingly.

   - Give suppliers access to customer order information, so they can fulfill those orders directly without      having to route product through you.

   - Using the network, demand forecasts can be updated in real time, and manufacturing line statuses,      and product fulfillment can be queried by any member of the supply chain.

   - Use the network to hold online meetings where product design teams work together with suppliers to      discuss prototype development, resulting in reduced cycle times.

Benefits of Extranets

What are the benefits of using extranets?

You can decrease inventories and cycle times, while improving on-time delivery.
You can increase customer satisfaction and, at the same time, more effectively manage the supply chain.
You can improve sales channel performance by providing dealers and distributors with product and promotional information online, while it’s hot.
You can reduce costs by automating everyday processes.
You can improve customer satisfaction by streamlining processes and improving productivity.

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