1 the impact of e-business dr. simon croom march 2003

1

The Impact of E-Business Dr. Simon Croom

March 2003

2

Some objectives for this session: To provide an insight into the nature of ‘E-

Business’ implementation across Supply Chains using a local case example

To examine some of the main implications for your business & your chains

To provide an opportunity to benefit from our research study

To engage in dialogue, debate and disagreement!

4

Some definitions

‘E-Business’ - the conduct of business transactions, business planning and control, communications and information sharing over a common I.S. platform such as the web.

‘E-Commerce’ The conduct of business transactions and trading over a common I.S. platform such as the web.

5

Why focus on Supply Chains?

Because the Internet is an Inter-Organisational Communication Channel

Because E-Business systems are both intra- and inter-organisational

Because organisations are adopting E-Business to manage within and across supply chains

6

What can YOU do?

Understand the stresses in your operations & supply chains

Be aware of the impact of ‘E’ on those stress points

Participate (FREE!) in our benchmarking study at www.supply-chain.org.uk

7

To AUDIT your Business Logon to http://www.supply-chain.org.uk Click on the SPA Methodology link Login to the ht2 site using:

Username SPA** Password SPA** (Same as your username)

I will allocate your number Complete the survey Your results will be emailed to you in early April as a

benchmark report

8

Three Main areas of E-Business Activity

Marketplaces - for trading

Knowledge sharing e.g. product development, customer strategies

Supply Chain Collaboration/ synchronisation

9

select requisition approve status receive

The objective is to automate the ENTIRE supply chain from product and service selection through receipt.

Using solutions that offer real-time interactivity with trading partners and customers worldwide

Starting with the Customer’s Requirement

11

5

12

34

Focus B2C

Systems Email, Web, EDI

ProcessesSales, Order

taking, Payments

Strategies Sales growth

E-Business In the Supply Chain - Five Phases of Evolution

12

Supply Chain eBusiness modelsSupply Chain eBusiness models

EDIHigh speed complex data

transmission to core customers & suppliers

Static publishing, emailCatalogues & information to users

EDIHigh speed complex data

transmission to core customers & suppliers

Static publishing, emailCatalogues & information to users

1998-20011998-2001

Wave 1 - Emphasis on Promoting to Customers

13

5

12

34

Focus B2B

SystemsCRM / e auctions

ProcessesAccount

Management

StrategiesKey Customer Management


14

Seller-side or buyer-side system connects with existing transaction systems

Sales Order Systems - Web-based order taking Electronic Funds Transfer via BACS system

Seller-side or buyer-side system connects with existing transaction systems

Sales Order Systems - Web-based order taking Electronic Funds Transfer via BACS system

2000-32000-3

Wave 2 - Emphasis on Transaction Systems


15

Public Web• Each Seller offers products at list price

Exchange• Commodity Trading Venue (Auction)

Market Place• Independent Org provides access to many suppliers

Company Hub• Individual Companies manage multiple supplier Contracts

Ad

hoc

Ad

hoc

Negotiated

Negotiated

Buyer

Buyer

Buyer

Buyer

SupplierBuyer

ExchangeVenue Commodity

Market SuppliersSeller Extranet• Seller access to pre-neg products and services

Supplier

Suppliers

How transactions may be executed

16

How E-Business Can Impact on your Demand

17

Demand Profiles?

Cyclical

Stable

Volatile

18

Matching Supply Chain Design to Demand

FunctionalProducts (e.gcontinuity products)

Innovative Products(e.g. Seasonal orpromotional)

Efficient SupplyChain

Match Mismatch

Responsive SupplyChain

Mismatch Match

Marshall Fisher. HBR Mar-Apr 1997

19

Reverse Auctionsfor Buyers

Auctionsfor Suppliers

A major phenomenon: electronic auctions

Streamlines strategic and off—contract buying

Leverages dynamic, Internet-based pricing

Dramatically lowers Cost of Goods

A large channel to new buyers

Cost effective method to liquidate inventory

More revenue from existing customers

Auctions May Benefit Buyers and Suppliers

20

5

12

34

FocusRe-engineering

Process

SystemsERP,

Knowledge Management

ProcessesOperations

planning and control

StrategiesOperations

Improvement


21

E-Procurement system integrates with enterprise control systems

CRM system integrating across the organisation

ERP system implementation

E-Procurement system integrates with enterprise control systems

CRM system integrating across the organisation

ERP system implementation

2002/52002/5

Wave 3 - Emphasis on Interfacing with Supply Chain


22

5

12

34

Focus B2X

Systems E-Procurement

ProcessesSupply base managmeent,

Strategies Procurement


23

Extended enterprise solution - integrating marketplaces, portals and auctions

Procurement and Sales via an E-Portfolio ‘Middleware’ adoption to integrate legacy

systems

Extended enterprise solution - integrating marketplaces, portals and auctions

Procurement and Sales via an E-Portfolio ‘Middleware’ adoption to integrate legacy

systems

2003/122003/12

Wave 4 - Emphasis on Coordination across the Supply Chain


24

Emerging industry portals = many examples

$200bn

Global Supply Global Supply Chain worth Chain worth $178000bn$178000bn

Global Supply Global Supply Chain worth Chain worth $178000bn$178000bn

Auto Industry Example Covisint

25

5

12

34

Focus Transparency

Systems E-Fulfilment

ProcessesTotal Logistics, Supply Chain Positioning

Strategies Supply Chain


26

Integrated CAD/CAM/CSCM Tracking, Global Positioning as integral part

of E-Fulfilment systems Supply chain positioning a key strategic

issue

Integrated CAD/CAM/CSCM Tracking, Global Positioning as integral part

of E-Fulfilment systems Supply chain positioning a key strategic

issue2002/102002/10

Wave 5 - Emphasis on Integrating the Supply Chain


27

5

12

34

Focus B2C B2BRe-engineering

ProcessB2X Transparency

Systems Email, Web, EDI CRMERP,

Knowledge Management

E-Procurement E-Fulfilment

ProcessesSales, Order

taking, Payments

Account Management

Operations planning and

control

Supply base managmeent,

Total Logistics, Supply Chain Positioning

Strategies Sales growthKey Customer Management

Operations Improvement

Procurement Supply Chain


28

E-Business project Critical Success Factors€ If you can’t support the business case,

then start again E-strategy must be seen as Cross-

functional Based on Business first, ‘e’ second Clear E-Strategy project structure Technology experts in a key project role E-strategies identify new channels to

customers - do you want them?

29

E-Business project Critical Success Factors - 2 What have customers said about CRM

and E-Business? What are the implications of CRM for

existing processes, strategies and organisation?

What are the skills needed? Where are the development needs? Be prepared to spend 75% of time

presenting internally to CRM teams,sales and others.

30

E-Business project Critical Success Factors - 3 Integration with operations and logistics Logistics channel design MUST be an integral

element of CRM strategy implementation Understand the impact of E-Business on

demand profiles What are the implications for relationships with

existing channels. Identify the portfolio: Which

products/services/customers via which channel?

31

It’s not about technology...It’s not about technology...

32

….but new ways of doing business….but new ways of doing business

1 the impact of e-business dr. simon croom march 2003

Documents

executedhow ebusiness

business planning

business implementation

impact of e

entire supply chain

business activity marketplaces

nature of e

supply chainswhat