Chapter 14A
Many Suppliers
Recommended References
• K. Larson, T. Sandholm: Deliberation in Equilibrium: Bargain in
Computationally Complex Problems. Proc. AAAI 2000, AAAI
Press 2000, p. 48-55.
• DE.C. Parkes, L.H. Ungar: Iterative Combinatorial Auctions:
Theory and Practice. Proc. AAAI 2000, AAAI Press 2000. (both
papers are mathematically oriented).
• M. Woolridge, S. Parsons: Languages for Negotiation. Proc.
ECAI 2000 (ed. W. Horn), IOS Press 2000, p. 393-400-
-2-
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Two Views
• Instead of a 1-1 scenario there is now a many-many
scenario.
• Customer’s view: There are many suppliers. Some are
known, others are not. There is no specific knowledge
about other customers.
• Supplier’s view: There are many suppliers. Several
customers approach, others might come. Knowledge
about other suppliers is available and should be used.
• The additional knowledge influences the behavior and in
particular the strategy of both partners. Also, some new
actions can be carried out.
• There are increased demands on the knowledge
management.
-3-
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Agents
• The participants ijn the scenario (humans as well as
software systems) are often called agents. In this
chapter as well as in the previous once we use the term
agent in a naive way.
• In a formal system where formalisma play the role of
agents one needs, however, a formal notion of the
agent concept.
• This formal approach will be discussed in chapter 14B.
-4-
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Search and Retrieval
• We distinguish different steps:
– search in an open world (many and partially unknown
suppliers): often supported by agents
– search in a closed world: one or several data bases exist:
select some base, possibly using agents
– similarity-based retrieval:
• generate a data base query
• apply the query for data base retrieval
• These steps may be invisible to the customer if there
is an institution which calls the agents which again
call the retrieval operators.
-5-
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Customer’s View (1)
• The customer can enter several shops simultaneously.
Shops can be left and reentered without notifying the
supplier.
• Obtaining product information and performing
negotiations can be done in parallel, offers can be
compared.
• Complex products are often not available in one shop.
Additions to products (e.g. graphic cards for PC) may be
cheaper in another shop. Some parts of products can
then be bought from some supplier and other parts from
different suppliers.
• There are heterogeneous products, e.g. services which
complement each other but need different expertise and
are sold or provided by different suppliers.
-6-
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Customer’s View (2)
• Some shop may not have enough quantities of the
intended product (e.g. heating oil, electricity).
• The customer can buy different quantities at different
shops subject to the specific costs and the availability.
• The customer will appreciate support
– in finding suppliers
– getting advice for comparison and completion of offers.
• The customer has in addition to compare all aspects of
the sale as
– after sales support
– consequences for subsequent sales
– etc.
-7-
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Supplier’s View (1)
• The supplier knows that the customer
– has different suppliers to choose from
– but knows nothing about the actual activities of the customer in
other shops.
• Problems:
– Increased difficulties to keep the customer already in a single
sales talk
– The customer may use the information service about products in
other shops (which are cheaper but give less information).
• Advantages:
– The supplier may satisfy the customer even if the demand is
incompletely satisfies by recommending other suppliers , i.e.
performing as a helpful agent.
– In case of heterogeneous products different suppliers are
necessary.
-8-
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Supplier’s View (2)
• Consequences for suppliers:
–
–
–
–
–
Suppliers can structure themselves and cooperate
Such structures can be viewed as virtual companies
The connections can be of various degrees of strenght
A loose connection is simply to exchange information
Other organizational forms are possible which offer additional
service to the customer. In this case the competition is more
between such organizations then between the shops
themselves.
– We will discuss several such structures.
• Of particular interest in E-C is the keep phase which is
more sensitive than in ordinary commerce.
-9-
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Supplier’s View (3)
• The supplier needs an extended process model.
• The model has to describe actions for new situations as
– There are missing parts to satisfy customer demands
– There is missing expertise in the company
– The company cannot deliver the demanded quantity
• The actions can include
– advice to contact other suppliers
– establishing the connection to other suppliers
– contacting other supplier and satisfying the demand invisible to
the customer
• The process model has to transformed in a workflow in
order to be executed
- 10 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
The Keep Phase
• There are two basic ways to keep the customer
– force the customer to stay
– convince the customer to stay
• Forcing the customer can be achieved, e.g. by
– contracts
– making products not compatible with products of competitors
• Convincing the customer be achieved, e.g. by
– satisfying the customer because his history is known and
taken care of
– making entrance to a known shop easier
– rewarding old customers
- 11 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Organizational Structures
• The purpose of an organization among suppliers is to
control the competition and to improve cooperation.
• The cooperation includes joint services and reflects the
view of a virtual enterprise. The aspects of distributed
workflows for realizing the services play a major role.
• The competition is, however, not totally excluded. This
aspect makes the organization interesting for the
customer.
• The keep phase for the organization is that the customer
makes continuous business with the organization; in the
actions concerning the keep phase “supplier” is replaced
by “supplier organization”.
- 12 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
E-Malls
• E-malls are the electronic version of ordinary malls: Many
different and independent shops are in one house.
• These shops can cooperate in a more or less integrated
manner, e.g.:
–
–
–
–
One entrance
Cooperative advertising
Links between the shops
Unified services
• Here we have many suppliers, organized in a closed
world. The suppliers may be competitors.
• Today there are many examples of e-malls.
- 13 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
E-Malls: Supplier’s View
• There are additional tasks for the suppliers and for
the organization.
• The common actions (like advertising, form of
payment etc.) need to formulated on a general
abstract level such that they can be instantiated for
each supplier.
• Communication channels have to established
– among the suppliers
– between the suppliers and the organization.
• With each shop the mall has to agree on a protocol
for the communication.
- 14 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Malls - Customer’s View
• A mall allows access to several shops under one
address.
• At the entry to the mall an overview over all shops in the
mall is given.
• There is a unified graphical interface.
• Mall-wide search functions.
• Comparative shopping: Functions to compare products in
different shops.
• Unified services (for payment, delivery, after sales
support etc.) are possible.
• The success of the mall depends largely on such
services.
- 15 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Example
- 16 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Auctions (1)
• This is not an organization in the proper sense but rather
a place for communication.
• The purpose of the communication is to agree on a
certain price for the product.
• Specific support functions are:
– Search and selection functions
– Agents who make price offers by order of a customer (a bidder)
following an agreed strategy up to a certain maximum
– Recording and analyzing histories of previous auctions
- 17 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Auctions (2): Example
• In auction agents deliver bids. One possibility for a bid is:
S1 XOR S2
which means: either all items of S1 or all items of S2 but not
both.
• With each bid a bid price p(t, bid) is associated (t is the
round of the auction) which indicates maximum offer;
furthermore an increase d is given which denotes the
increment in each round for the price, starting with the
ask price of the auctioneer.
• The XOR constraints have to be observed by the
auctioneer.
• Termination: All agents make the same bids in two
consecutive rounds or all get a bundle.
- 18 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Complex Processes and Portals (1)
• Many sales processes involve more aspects than
simply selling a certain product.
• Example: Building a house:
– The customer wants an overall information, e.g. about the
area etc.
– A lot for the house has to be bought
– An architect has to be found
– Financial aspects are important (e.g. mortgage)
– Insurances are needed
– A notary is needed
– Contracts have to be formulated
• Similar situations arise in financial advice or
insurance business.
- 19 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Complex Processes and Portals (2)
• It is characteristic for such complex processes that a
twofold expertise is required:
– Expertise for the individual aspects. Such expertise is naturally
distributed over suppliers and there is no or little competition
between them
– Expertise about the whole product: What are the relations
between the parts, when to contact whom etc. This is usually
not provided by the specific suppliers.
• An organization or a process package (regarded as a
virtual company) can offer such services in an overall
package.
• The entrance to such a package is called the process
portal.
- 20 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Portals - Customers View
• Structured information is provided
• Selection and search functions are provided
• Many search tasks are provided by agents and
invisible to the customer
• CRM aspects:
–
–
–
–
–
Customer is treated individually
Customer classes can be modeled
There is care taken of complex demands
Dialogues can be offered
Demands can be completed and corrected if necessary
elements are missing or wrong
- 21 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Negotiations (1)
• Because of the competitive situation dialogues will often
be of negotiation type. Topics are, e.g.
–
–
–
–
–
quality of products
prices and terms of payment
quantities
guaranties on products
conditions on after sales service.
• Even if there is no explicit negotiation these topics are
always implicitly present.
• Precise determination of customer classes is important
for optimal behavior of the supplier.
- 22 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Negotiations (2)
• Negotiation dialogues can also be performed by static
and dynamic forms or as free dialogues.
• Such dialogues have to aspects
– the information aspect
– the competition aspect
• Both partners have the common target to come to an
agreement. This target restricts the competition.
• There are new types of knowledge about the partner:
– What are restrictions of the partner, i.e. which choices does he
not have?
– Which pressures does the partner have (must buy or sell something)?
– Which time pressures does the partner have ?
- 23 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Negotiations (3)
• The forms used or the dialogue strategies should
reflect formally
– the competitive aspects
– the knowledge about the partners, in particular their abilities
and their limitations
– knowledge about the products and the possible
functionalities
– laws
– security
• If more flexibility is needed dialogues may become
necessary. Even then pre-configured forms are
helpful.
• Text pieces can allow to configure contracts.
- 24 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Negotiations (4)
• The description of the dialogues can follow the same
pattern as for information type dialogues, in particular
the three level approach (see chapter 11).
• The type of actions distinguishes e.g. questions,
answers offers, acceptance, demands etc.
• The subtypes include negotiation oriented actions like
conditional acceptance, modification demands etc.
• The instantiations deal with aspects like payment forms,
delivery aspects which arise in the individual partner
situation.
- 25 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Change of Role
• Each partner has one of the roles customer or supplier.
• The roles are only invariant in a specific situation but
not in general:
– In one situation A can be the customer and B the supplier but in
another situation they can have the reversed roles.
– Supplier A can be a customer of another supplier C in the same
sales process. Supplier A can also search for another supplier.
• This arises if supplier A
– does not manufacture the products and has buy them or parts
of them or raw products.
– cannot fully satisfy the specific demands of customers. Such
situations arise dynamically and require an interleaving of
buying and selling actions.
- 26 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern
Summary
• This chapter describes the many-many relation
between customers and suppliers.
• Both partners have additional degrees of freedom
which give rise to new types of actions.
• There are several ways to organize many suppliers.
The intention is to provide services which a single
supplier cannot supply.
• The competitive aspect dominates the scenario and
one purpose of organizations is to keep it under
control.
- 27 -
(c) 2000 Dr. Ralph Bergmann and Prof. Dr. Michael M. Richter, Universität Kaiserslautern