Problems Manufacturers and Marketers Face When Using the Internet to Manage the Global Value Chain

The major problems that manufacturers and marketers face when using the Internet to manage the global value chain are (1) cannibalization of normal traditional channels sales by Internet based sales; (2) overselling supply, production, and distribution capacities due to the lack of salesperson involvement to apply knowledge about these capacities; (3) misinterpretation of the permanency of the demand from customers who may return to their original suppliers once those suppliers are on-line; (4) doing business ‘in the blind’ and not fully understanding the customers' needs, desires, and future plans; (5) forecasting volatile demand with very short lead-times; and (6) synchronization and optimization of the value chain when everyone in the chain has open access, and extra-value chain servers and networks are necessarily being used to manage the value chain on the Internet. This paper examines these problems and offers strategies for overcoming them.