Complex development of Ukraine’s infrastructure of e-trade in metal products
E-TRADE NETWORK
E-TRADE NETWORK
Complex development of Ukraine’s infrastructure of
e-trade in metal products
In 1992, the 8th session of the UNCTAD (United Nations
Conference on Trade and Development) initiated special “Program on raising efficiency of
trade”, which stipulated for creation of Trade Points.
Major tasks of the Trade Points embraced use of up-to-date
ITs, assistance to exporters and importers in entering foreign markets, fulfillment of
specific foreign trade operations, use of electronic data exchange to reduce time and
document circulation when preparing a deal, simplification of trade procedures using
modern standards, including EDIFACT standards of the UNO.
The first 17 pilot projects on creation of trade points
were put on stream back in 1992. In October of 1994, participants of international UNO
symposium on trade efficiency, which was held in the city of Ohio (USA), discussed
performance of trade points and adopted decision to create Global Trade Point Network
(GTPNet), which was to unite all trade points around the world via Internet.
Using methodological and guiding materials from the UNCTAD,
as well as works on ITs for e-trade, there was created the Center for E-trade in Mining
and Metallurgical Industry of Ukraine (www.ptcor.net/ukrmet), which has its technological
peculiarities. The Center was established in 1999 in Dnepropetrovsk under Promtelecom
Corporation.
With modern development of Internet-technologies, it
becomes harder (and even unnecessary) to concentrate commercial services in one place; in
particular, when the commodity is metal products. Today, virtually every large plant has
its own web-site, it is registered in related network structures, and may directly render
necessary range of metal trade services to consumer.
Further on, not only it is convenient for buyer, and often
for seller as well, but it also becomes necessary to deal with complex structure, which is
able to provide all preparatory operations for acquisition and delivery of metal products.
Foremost, these are marketing, harmonization of legislative, customs, and temporary
services, freighting, etc, which are essential to sign the deal.
Thus, there is specific infrastructure of e-trade and its
interaction with suppliers and consumers of metal products.
The infrastructure comprises:
- Group of enterprises and organizations that
participate in preparing, signing, and fulfilling of the deal.
- Technology of buyer-seller interaction, as well as
functional subsidiary structures participating in the deal. Of fundamental importance is
logistics of operations while preparing and signing the deal.
- Software-technical environment of the trade point
(devices for collecting, processing, accumulating, search, and providing of analytical
information, etc).
- Telecommunication infrastructure of interaction
between consumers and suppliers of metal products.
- System of software complex security and reliability.
In compliance with present requirements and terms of metal
trade in e-business system, the following functional structures should take part:
suppliers and consumers of metal products; information services, agencies, or
corporations; telecommunication companies; forwarding companies; customs agencies;
insurance companies; and banks.
Technology of buyer-seller interaction seems to the most
complex part of the problem. Materialization of technologies into the system of software
and technical means is of no hardships. Yet, general principles of preparing and
concluding the contract, operation logistics, bargain guarantees, and their practical
implementation are crucial tasks. Not only the latter had no technological practice in
Ukraine, but they also call for adoption of additional legal or regulatory by-laws (such
as competence of electronic subscription, interaction with state agencies, etc).
Today we primarily focus on marketing and preparatory
products that precede the contract. Separate stages of the process have clear technology
and are easy for automation.
Central part of the trade point is information system
comprising central server and information servers of metal product suppliers to the
market. As a whole, the system is a distributed database. The structure of information
provides compulsory minimum of updated information on every company in the central
repository.
Central base (repository) has the following departments:
data on types and range of metal products (rolled iron, plate, tubes, hardware, etc);
information about producers and suppliers of metal products; data on buyers and consumers
of metal products; reference information (legal, customs, transportation, etc); types of
services and terms of metal products’ delivery; corporate information; and other types
of data (analysis, etc).
The system’s operating technology is rather simple as a
whole. Details bring intricacy. Following the inquiry, potential buyer may carry out fast,
in-depth, and quite efficient marketing. He may obtain information about required
products, producers, prices, delivery terms, legislative by-laws, etc.
Further activity may be run within several modes, depending
on the product’s lot size, delivery terms, establishing of long-term agreements, etc.
There are two major modes:
- the first one puts buyer to direct contact with
commercial agents accredited at the trade point. Communication is run as on-line
connection, е-mail, or with voice (IP-telephony). Communication with transport,
insurance, and other agents may be similar;
- the second mode turns the customer directly to
enterprise supplying metal products or its main commercial service in charge of product
sales. Further negotiation and conclusion of the contract follow present scheme.
Steps, which have been made so far, are fundamental for the
entire system. When corresponding laws are passed (electronic signature, payment
opportunities, etc) and B2B technology matures, the system will evolve toward service
expansion, reliability promotion, and further development.
B2B development staggered traditional business
technologies, facilitating business cycle and changing assumptions about customer service
management.
Third generation of Internet-business is presently
discussed. As opposed to the first generation, when it only implied creating of Web-server
and placing of electronic catalogues (announcement board) there, third generation requires
developed systems of production management with their processes and applications capable
to operate in automatic mode. Trade points have independent meaning for the technology.
Favorable conditions for e-business solutions have
naturally evolved in Ukraine’s ferrous metallurgy. Considering that mining and
metallurgical group of enterprises performs as an integral production complex, ferrous
metallurgy of Ukraine has been developing PromSpetsSvyaz specialized communication system
for decades. In addition, hair-line cooperation with external environment (railways,
consumers of metal products, trade organizations, machine builders, etc). This
communication network serves as technical infrastructure for research, analytical, and
commercial network of metallurgical enterprises, which ensures conditions for internal
interaction and outside connection (Metals Market monthly No.11-12, 1999, pages 12-17).
Today, metal mills and leading commercial organizations are
very careful about the e-trade concept, since use of modern technologies will add
transparency to operations. Besides to technical and technological problems, there also
are organization and psychological hardships, which are to be overcome in Ukrainian
environment with more efforts and general economic recovery. Nonetheless, possibility of
success is rather high. The evidence is tremendous growth of e-trade in the world and
Ukraine’s need for more active participation.