OR/MS Today - August 1998

August 1998

Cyberspace:
Internet and E-Commerce Around the World

By ManMohan Sodhi

In my last column (June 1998), I wrote about technologies that make it possible to have Internet-enabled collaboration with suppliers and clients for supply chain planning. In the global marketplace, many suppliers to your firm or clients may be in different countries. Is the Internet or e-commerce even present in the country where you have your suppliers? What steps are the private sector and governments of these countries taking to establish or enable e-commerce? Let's take a look at what is happening on that front in the world by skimming the news:

Hong Kong. The Asian Sources Media (ASM) Group has a Web site that acts as a storefront of mostly small- and medium- size suppliers in Hong Kong, mainland China, Taiwan and Korea. ASM's catalog comprises more than 200,000 products from these companies. Most of the commerce takes place over e-mail.

India. The Ministry of Commerce has taken the initiative in implementing e-commerce to facilitate foreign trade. Electronic Data Interchange (EDI) capabilities have been installed at a few ports, airports, customs houses and some banks to help import and export. This year, it wants many agencies like Indian Airlines Cargo, Air India, and Ports and Airports Authority of India to provide integrated EDI services.

Indonesia. An Internet company, Linknet, offers e-commerce service with the expectation that, in addition to the usual large players, many medium and small suppliers would turn to it because large businesses used it for transactions.

Japan. Both the Ministry of International Trade and the Ministry of Posts and Telecommunication are currently sponsoring e-commerce projects with a private industry consortium, Commerce Net, an active player as well. The leading electronics manufacturer, NEC, is developing an Internet-based information system to enable most procurement activities ranging from procurement notices to settlement. NEC, Hitachi and Fujitsu are establishing a company to enable e-commerce by providing digital authentication to verify individuals and entities in e-commerce transactions.

Korea. The Ministry of Trade, Industry and Energy has created the Secretariat of Electronic Commerce Implementation within its industrial standard division. The Secretariat, with staff from different ministries, industries and research institutions, considers legal systems, taxation and intellectual properties. Separately, Korea Telecom, in cooperation with MasterCard International, plans to launch an e-commerce system based on secure electronic transaction.

Malaysia. The Malaysian government has passed a number of laws such as the Digital Signature Act and the Computer Crime Act. The government has also vowed to pass similar laws to protect the rights of people conducting transactions online in order to provide a legal framework for e-commerce.

Pakistan. General Electric Information Services (GEIS) and the Cupola Group of Pakistan have an agreement for a technology cooperation for the establishment of electronic commerce. This will enable companies to trade electronically with their partners initially using EDI. The underlying technology is GEIS' EDI*Switch platform. In my April 1998 column, I mentioned that in addition to its proprietary EDI-based services, GEIS provides a variety of Internet-based capabilities like ECXpert for electronic commerce messaging so GEIS may make these available to businesses in Pakistan as well.

Singapore. Last year, Singapore Telecommunications Limited (SingTel) launched an electronic commerce service targeted at retailers, distributors, manufacturers, suppliers and professional organizations. Singapore Airlines uses the service for procuring goods and services from suppliers in Singapore and elsewhere. Reportedly, users need only a Web browser and an Internet account to carry out trading anywhere in the world.

Taiwan. The Ministry of Economic Affairs has helped establish the Electronic Commerce Consortium comprising suppliers including department stores and computer companies; financial organizations including Visa and MasterCard; public organizations; universities; news media; cargo/freight forwarders; and Internet service providers including AcerNet and IBM/CGNet.

United States. The U.S. Department of the Treasury recently transmitted the first electronic check (e-check) on the Internet a payment to a phone company. In the coming year, approximately 50 government contractors are expected to try the e-check system developed by Financial Services Consortium, a team of banks, technology companies, universities and government agencies. Last year, President Bill Clinton presented his administration's "Global Framework for Electronic Commerce" report. The report led to government initiatives both in the United States and other countries (some of which are mentioned in this article) as international agreements which are necessary in order to have a uniform global approach to e-commerce.

Conclusion

There are some things worth noting here: (1) e-commerce is already big or has the potential to be so in most countries, (2) e-commerce initiatives are based both on the Internet as well as separate networks for EDI, (although in the longrun, the Internet may dominate), and (3) given the larger issues pertaining to any trade across boundaries, governments are necessarily involved. We may never have free trade or perfect markets, but it would be hard to argue against the statement that the Internet is nudging us all in that direction.

Dr. ManMohan S. Sodhi is President of the Logistics Section of INFORMS and Experienced Consultant in supply chain planning with Andersen Consulting in Chicago. He is the founder of the OR news group, sci.op-research, and helped design and create INFORMS Online. He welcomes your comments at MohanSodhi@AOL.com.

Table of Contents

OR/MS Today Home Page

Lionheart Publishing, Inc.
506 Roswell Street, Suite 220, Marietta, GA 30060, USA
Phone: 770-431-0867 | Fax: 770-432-6969
E-mail: lpi@lionhrtpub.com
URL: http://www.lionhrtpub.com