Supply Chain Management &

eCommerce Technology

presented by:

Nachiappan Annamalai

Overview

• Supply Chain Management - Whazzit• SCM today - Problems• Solutions - e-Commerce• Examples of present systems -

tradematrix.com - i2 Technologies• e-Commerce - Application to SCM -

Framework• Future of SCM & e-Commerce• Suggestions

World Internet Population 3/99

• World Total 158.50 MILLION

• Africa 1.14 million

• Asia/Pacific 26.97 million

• Europe 36.55 million

• Middle East .88 million

• Canada & USA 88.33 million

• South America 4.63 million

Effective SCM involves

• Managing Supply Chain as a single entity• Recognizing end user service requirements

Customer Utility = f(time, quantity, place)• Recognizing time as basis of competitive

advantage• Effective use of Inventory• Continuos Improvement

Time Involved in the Process

Effects of Time Consuming SCM

• Excessive Inventory - $ 30 Billion ( Grocery Supply Chain alone) • Poor Product forecast• Poor Capacity Planning• Poor Customer Service• High Corrective Costs - Overtime, Subcontracting, Trans. Prob.• Optimized Supply Chain as a Whole entity - Not Possible• Internationalization - Not possible

Distribution

Other Problems

• Demand Forecast Updating• Order Batching• Price Fluctuation• Shortage gaming

Demand Forecast Updating

• Amplification of Fluctuation when ones goes up the Supply Chain

• Lead Time importance

Order batching

• Orders in Batches - Compulsion

- Time & Cost Constraints

- Transportation Problems - FTL - Full Truck

Load• Overlapping of Order Cycles - Leads to more

variability• MRP Jitters

Price Fluctuations

• Forward Buy• Role of Price Fixing - Erratic Demand• Variation in Buying Quantity is much bigger

than the variation of the Consumption rate

Shortage Gaming

• Phantom Orders - When & Why does it Occur• Examples

- Motorola and its Distributors

Air touch Communication & Baby Bells

- IBM Aptiva Model - Assumption of Retailers

Counteractions

• One and only best Solution

E-Commerce

- Information Sharing

- Channel Alignment

- Operational efficiency

- Intelligent Optimization Agents

- Transaction Processing

- Money Transactions

I2 Technologies - Tradematrix.com

an efficient SCM e-Commerce system

Services the System Provides

• Direct & Indirect Procurement• RFQ - (Request for Quote) Collaboration• Demand Collaboration• Holisitic Customer Management• Buyer & Seller Services• Service Providers• Marketing Services

Tradematrix.com - Framework

• Front end

- Portal

- Customer Management

- Communication Systems

- Money Transactions• Back end

- Optimization

- Transaction Processing System

The Process of Commerce

• Buyers and sellers find each other– Communication: advertising and marketing– Intermediaries (dealers, distributors, reps)

• Negotiation– Agents (buyers, lawyers)

• Transaction– Contract– Payment (or many payments)

The Process of Commerce

• Order fulfillment– Manufacture– Delivery

• Post-sale events– Customer service – Reorder, restock

• Accounting– Are we making a profit?

• Data analysis– Who’s buying the stuff?

The eCommerce Process

• Transaction– Transaction processing, Databases– Electronic Payment Systems,– Computer Security,– System Reliability

• Order fulfillment– Manufacture (manufacturing systems)– Delivery (tracking systems)

eCOMMERCE TECHNOLOGY

• Networks • Security• Internet • Electronic payment• Programming • Search engines• Multimedia • Intelligent agents• Databases • Data mining• Transaction

processing

The eCommerce Process

• Which of the steps are “bittable”?• Buyers and sellers find each other

– Communication (via Networks, the Internet, Programming and Information Retrieval)

– Human-Computer Interaction, Multimedia– Intermediaries

• Disintermediation• Negotiation

– Electronic Negotiation, Intelligent agents

The eCommerce Process

• Post-sale events– Customer Service and Help Facilities – Reorder, restock

• Accounting– Transaction processing– Interoperability between online and legacy

systems• Data analysis

– Data Mining

Ideal e-Business System

• Front End

- Portal

- Communication Systems - Interface with Mobile Devices & GPS - for access to real time info.

- Money Transaction

- Customer Management Systems• Back End

- Optimization

- Decision Support Systems & Intelligent Agents

- Transaction Processing System

- Prioritizing Systems - Shows Contradictions

- Forecasting System with Responder- Capability to match System Dynamics

Manufacturing Services

• Front End System Functions

- Product Design & Quality Specification

- Customer Management & Communication System

- Money Transactions• Back End

- Standard time & Least Cost

- Supply Time

- Optimization

- CNC Machine Code Conversion

- Route data to CNC Machine would lead to total automation - paperless industry