principles of ebusiness university of wollongong 2005 - lecture 9

2 May 20052 May 2005 IACT 304 - Lecture 11IACT 304 - Lecture 11 11

Supply Chain Supply Chain Management Management Principles of eBusiness - IACT Principles of eBusiness - IACT 304304

Katina MichaelKatina Michael61 2 4221393761 2 [email protected]@uow.edu.auhttp://www.itacs.uow.edu.auhttp://www.itacs.uow.edu.au

mailto:[email protected]

http://www.itacs.uow.edu.au/


Lecture ScheduleLecture Schedule1 1 Overview of Overview of ECEC

22Patterns for Patterns for eBusinesseBusiness

3 3 Business-to-Business-to-Consumer EC Consumer EC (B2C)(B2C)

4 4 Business-to-Business-to-Business EC Business EC (B2B)(B2B)

55Collaboration Collaboration + Information + Information AggregationAggregation

**RECESSRECESS

66Mobile Mobile Commerce & Commerce & Pervasive Pervasive ComputingComputing

77Electronic Electronic Payment Payment Systems (EPS)Systems (EPS)

88Customer Customer Relationship Relationship Management Management (CRM)(CRM)

9 9 Anzac Day Anzac Day HolidayHoliday

1010Enterprise Enterprise Resource Resource PlanningPlanning

11 11 Supply Chain Supply Chain Management Management (SCM) (SCM)

1212e-Government e-Government ECEC

13 13 Legal, Legal, Regulatory & Regulatory & Ethical IssuesEthical Issues

**ExamExam


Lecture 11 - OutcomesLecture 11 - Outcomes Understand the supply chainUnderstand the supply chain Describe problems with the Describe problems with the

traditional supply chaintraditional supply chain Describe how these problems can Describe how these problems can

be overcome with adaptive supply be overcome with adaptive supply chainchain

Identify the main technologies Identify the main technologies involved in building supply chain involved in building supply chain relationshipsrelationships


IntroductionIntroduction A A supply chainsupply chain is the flow of is the flow of

materials, information, money, materials, information, money, and services from raw material and services from raw material suppliers through factories and suppliers through factories and warehouses to the end warehouses to the end customers.customers.

It is how partnering organisations It is how partnering organisations are are linkedlinked together together


SCM Definition (1)SCM Definition (1)

APICS defines APICS defines Supply Chain Management (SCM) as Supply Chain Management (SCM) as

the the – planning planning – organizingorganizing– controlling controlling

of supply chain activities. of supply chain activities.


SCM Definition (2)SCM Definition (2) The Supply-Chain Council (SCC) The Supply-Chain Council (SCC)

defines supply chain activities as defines supply chain activities as ““all customer interactions, from order all customer interactions, from order

entry through paid invoice; entry through paid invoice; all product (physical material or all product (physical material or

service) transactions, from supplier’s service) transactions, from supplier’s supplier to customer’s customer; supplier to customer’s customer;

and all market interactions, from the and all market interactions, from the understanding of aggregate demand understanding of aggregate demand to fulfillment of each order.” to fulfillment of each order.”


Supply Chain Supply Chain SegmentsSegments UpstreamUpstream supply chain supply chain

– Includes activities of a manufacturing company with its Includes activities of a manufacturing company with its supplierssuppliers

– Majority activity is procurementMajority activity is procurement– Origin of materials is primary industryOrigin of materials is primary industry

InternalInternal supply chain supply chain– All the in-house processes used in transforming the inputs All the in-house processes used in transforming the inputs

received from the suppliers into the organisation’s outputsreceived from the suppliers into the organisation’s outputs– Extends from time inputs enter organisation to the time Extends from time inputs enter organisation to the time

that the products go to distribution outside the organisationthat the products go to distribution outside the organisation DownstreamDownstream supply chain supply chain

– Includes all the activities involved in delivering the products Includes all the activities involved in delivering the products to the final customersto the final customers

– Attention given to distribution, warehousing, transportationAttention given to distribution, warehousing, transportation


A Simple Supply Chain A Simple Supply Chain for a Toy Storefor a Toy Store

Turban © 2002


The Value Chain The Value Chain InfrastructureInfrastructure


The Virtual FactoryThe Virtual Factory

The Virtual Factory © Solectron


E-Business E-Business ManufacturingManufacturing

eManufacturing © Camstar


Supply Chain ProblemsSupply Chain Problemsand Control and Control MechanismsMechanisms Supply Chain Supply Chain

ProblemsProblems– Inventory levelsInventory levels– Inventory TurnsInventory Turns– Stock-outsStock-outs– On-time DeliveriesOn-time Deliveries– Cycle TimesCycle Times– Supply Chain CostsSupply Chain Costs– RevenuesRevenues

Supply Chain Supply Chain LeversLevers– Demand AllocationsDemand Allocations– Supply AllocationsSupply Allocations– BOMs and BOM BOMs and BOM

AssignmentsAssignments– Lead TimesLead Times– Replenishment LevelsReplenishment Levels– Hard and Soft Hard and Soft

CapacitiesCapacities– Flexibility AgreementsFlexibility Agreements

Improving Extended Supply Chain Performance Through Better Control © SoftChain 2002


Traditional Traditional Supply Chain ModelSupply Chain Model


Supply RelationshipManagement© Entomo 1999


Problems with Long-term Problems with Long-term Forecasting- Demand Forecasting- Demand VolatilityVolatility

Lessons in SCM from 2001 © KPMG


Entities of B2B within Entities of B2B within the Supply Chainthe Supply Chain

Selling companies- marketing products/servicesSelling companies- marketing products/services Buying companies- procurement processBuying companies- procurement process Electronic intermediaries- third party service providersElectronic intermediaries- third party service providers Trading platforms- pricing & negotiation protocolsTrading platforms- pricing & negotiation protocols Payment services- mechanism to transfer dollarsPayment services- mechanism to transfer dollars Logistic providers- packaging, storage, deliveriesLogistic providers- packaging, storage, deliveries Network platforms- Internet, intranets, extranets, VANNetwork platforms- Internet, intranets, extranets, VAN Protocols of communication- EDI, XMLProtocols of communication- EDI, XML Other services- directory services, security, back upOther services- directory services, security, back up Back-end integration- connecting to ERP systems, Back-end integration- connecting to ERP systems,

dbasedbase


B2B Supply ChainB2B Supply Chain

Turban © 2002


Disintermediation in Disintermediation in the B2C Supply Chainthe B2C Supply Chain Disintermediation Disintermediation

refers to the refers to the removal of removal of organisations or organisations or business process business process layers responsible layers responsible for certain for certain intermediary intermediary steps in a given steps in a given value chain.value chain.

Turban © 2002


Traditional Supply Traditional Supply Chain vs Adaptive Chain vs Adaptive Supply ChainSupply Chain

Adaptive Supply Chain Networks © SAP


e-SCMe-SCM e-SCM is the collaborative use of e-SCM is the collaborative use of

technology to enhance B2B processes technology to enhance B2B processes and improve speed, agility, real-time and improve speed, agility, real-time control, and customer satisfaction.control, and customer satisfaction.

It is the use of technologies to enhance It is the use of technologies to enhance B2B processesB2B processes

Not just about technology; it involves Not just about technology; it involves change in management policies, change in management policies, organisational culture, performance organisational culture, performance metrics, business processes, and metrics, business processes, and organisation structure across the supply organisation structure across the supply chain.chain.


Shrinkage EffectShrinkage Effecton Businesson Business



Adaptive Supply Adaptive Supply ChainsChains Manage VisibilityManage Visibility

– Quality of information Quality of information intra and inter intra and inter organisationalorganisational

– Needs to be very accurateNeeds to be very accurate Manage VelocityManage Velocity

– Access and distribute Access and distribute information across the information across the supply network rapidly (in supply network rapidly (in real-time)real-time)

Manage VariabilityManage Variability– Forget historical Forget historical

forecasts, adapt to forecasts, adapt to custom-order designs by custom-order designs by increasingly sharing increasingly sharing information with network information with network partnerspartners



Stages to AdaptivityStages to Adaptivity IntegratedIntegrated

– Relational databases, client-Relational databases, client-server architecture, TCP/IP server architecture, TCP/IP protocols, multimedia, protocols, multimedia, wireless technology have wireless technology have catapulted intra-organisation catapulted intra-organisation integrationintegration

CollaborativeCollaborative– ability of the supply network ability of the supply network

to exchange near real-time to exchange near real-time information and thereby information and thereby execute better and fasterexecute better and faster

AdaptiveAdaptive– Group of organisations Group of organisations

working together to share working together to share transactional, operational, transactional, operational, and financial data to enhance and financial data to enhance network competitiveness and network competitiveness and optimise network profitabilityoptimise network profitability



Extranet using the Extranet using the Internet and VPNInternet and VPN

Turban © 2002

Supplier’s Extranet: Hudson’s Dayton


Benefits of ExtranetsBenefits of Extranets Enhanced Enhanced

communicationscommunications Productivity Productivity

enhancementsenhancements Business Business

enhancementsenhancements Cost reductionCost reduction Information Information

deliverydelivery

Improved internal Improved internal communicationscommunications

Improved business Improved business partnershipspartnerships

Just-in-time information Just-in-time information deliverydelivery

Productive collaborationProductive collaboration Fast time-to-marketFast time-to-market Lower design and Lower design and

production costsproduction costs New business opportunitiesNew business opportunities Improved client Improved client

relationshipsrelationships Reduced travel and Reduced travel and

meetingsmeetings


But What About But What About Intrabusiness Intrabusiness Practices?Practices? A A corporate portalcorporate portal is a gateway to a is a gateway to a

corporate Web site that enables corporate Web site that enables communications, collaboration, and access communications, collaboration, and access to company information.to company information.

Corporate portals offer employees, Corporate portals offer employees, business partners, and customers an business partners, and customers an organised focal point for their interactions organised focal point for their interactions with the firm.with the firm.

Portals for: suppliers, customers, Portals for: suppliers, customers, employeesemployees

Workflow applications/ technologies are Workflow applications/ technologies are paramount to successful corporations.paramount to successful corporations.


Key TermsKey Terms

Buyer Buyer SideSide

Seller Seller SideSide

DisintermeDisintermediationdiation

ManufactuManufacturere

DistributorDistributorss

SuppliersSuppliers ProducerProducer RetailersRetailers

TraditionTraditional SCMal SCM

Adaptive Adaptive SCMSCM

eProcuremeneProcurementt

IntermediariIntermediarieses

IntranetIntranet ExtranetExtranet Virtual Virtual Private Private NetworkNetwork

Supply Supply Relationship Relationship ManagementManagement

principles of ebusiness university of wollongong 2005 - lecture 9

Documents