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Page 1 Welcome! research dp&c. Page 2 Education in Pursuit of Supply Chain Leadership research dp&c D ISTRIBUTION P LANNING AND C ONTROL R ESEARCH e-

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Presentation on theme: "Page 1 Welcome! research dp&c. Page 2 Education in Pursuit of Supply Chain Leadership research dp&c D ISTRIBUTION P LANNING AND C ONTROL R ESEARCH e-"— Presentation transcript:

1 Page 1 Welcome! research dp&c

2 Page 2 Education in Pursuit of Supply Chain Leadership research dp&c D ISTRIBUTION P LANNING AND C ONTROL R ESEARCH e- B USINESS AND ITS R OLE IN THE S UPPLY C HAIN

3 Page 3 Meet David F. Ross, PhD, CFPIM 13 Years Manufacturing and Distribution Industries 17 Years MRP II, ERP, Enterprise Business Systems CPIM (1988), CFPIM (1996) 6 Years APICS CPIM Instructor 1991 Romey Everdale Award 3 Books on SCM/Logistics - Foundation Book for MPR CPIM Exam Meet Your Session Leader

4 Page 4 Goals and Objectives Summary of Session Goals and Objectives A Broad, Executive Introduction to e-Business Nature of Todays Competitive Environment Defining e-Business Terms Four Phases of e-Business Todays Technology Toolsets Benefits of e-Business

5 Page 5 What Has Happened To e-Business? Rise and Fall of the New Economy: 1999 – Estimates Business-to-Consumer (B2C) would exceed $450 billion by 2004 Business-to-Business (B2B) would exceed $5 trillion by 2004 Companies would spend $1.7 trillion in technology just to get in the game If you were not trading through the Web you would be Amazoned or Enroned and sink into irrelevance!

6 Page 6 What Went Wrong? e-Business Post- Mortem: Over-excessive optimism Technologies that were not yet ready Problems with connectivity and interoperability Huge infrastructure cost Invalid business models and faulty practices Risk, risk, and more risk!

7 Page 7 Internet Is Here To Stay! Key Indicators: Changes in technology infra- structures and interoperability Expanding Usage and Popularity Utilization by software developers Declining costs End of hype – growth of real productivity

8 Page 8 The Business World Has Changed Power of the customer demanding personalization, super service, convenient solutions, product and service customization, low cost Abandonment of strategies based on the vertical integration of resources Explosion in global trade and outsourcing has changed the basics of competition Key Drivers of Business and Technology Today:

9 Page 9 The Business World Has Changed Key Drivers of Business and Technology Today: Companies need to be agile, lean, efficient, and more responsive to the customer, spawning virtual organizations and interoperable processes Product cycle management that requires leveraging collaborative supply chain relationships The Internet has truly revolutionized everything – the supply chain is the medium for competitive advantage

10 Page 10 Conventional Supply Chain Serial flow of goods and information through the Supply Chain

11 Page 11 The Bull Whip Effect Chained Pairs Relationship Model:

12 Page 12 Todays Networked Value Stream Supply Functions Enterprise Boundaries Supplier Customer Supply Chain Ecosystem Demand Digital Data Fulfillment Internet Linkages Customer Functions Core Company Enablers Supply Chain Ecosystem Supplier Customer Customer-focused, collaborative, agile, scalable, fast flow, digitized networks

13 Page 13 Defining Terms Defining Key e- Business Terms: e-Business An inclusive term used to describe all of the business relationships driven by and operating with the Internet e-Commerce Refers to the process of performing transactions utilizing the Internet e-Fulfillment Activity of physically delivering products and services placed in the network supply system through e- commerce transactions

14 Page 14 Defining Terms (cont.) Business-to-Business (B2B) Use of Internet, e-commerce applica- tions that enable companies to sell goods and services to other businesses Business-to-Consumer (B2C) Use of internet, e-commerce applica- tions that enable companies to sell goods and services directly to the customer e-Procurement Automation and integration of the purchasing process through the use of Internet B2B trading exchanges Defining Key e- Business Terms:

15 Page 15 Defining Terms (cont.) Collaborative Commerce A business strategy that seeks to utilize Internet technologies to enable closer collaboration and interoper- ability of channel network partners Trading Exchanges e-Marketplaces Web sites (both private and public) focused on optimizing, synchronizing, and automating selling, buying, and fulfillment. Defining Key e- Business Terms:

16 Page 16 Four Phases Of e-Business

17 Page 17 I-Marketing Leveraging the Web for Marketing Products and Services: Goal: Provide information about company product/service wrap through the Internet Characteristics: Brochureware: information browsers Static text and graphics Access to printed product/service publications Catalogs and pricing Not transaction capable No interaction possible with the customer

18 Page 18 e-Commerce Storefront Performing Transaction s and Interaction Using the Web: Goal: Provide customers with ability to buy and sell using the Internet Characteristics: Web-site personalization, self-service, interactive shopping carts, bid boards, credit card payment, on-line communities Budding and auctioning e-Tailing and consumer portals Consumer care/customer management Web-site branding Electronic bill payment

19 Page 19 e-Business Marketplaces Performing Business-to- Business Transactions: Goal: The transaction of products and services between businesses (B2B) Characteristics: Resembles traditional business purchasing: long-term, symbiotic, and relationship based Uses e-Commerce functions and business transaction types Focused on the use of trading exchanges Used for MRO purchasing Slow expansion to production inventory purchasing

20 Page 20 Types Of Exchange Three Types of Trading Exchange ŒIndependent Exchange A many-to-many marketplace composed of buyers and sellers networked through an independent intermediary Private Exchange A closed marketplace dominated by a channel master composed of internal business units and preferred business partners linked by a single point of contact, coordination, and control ŽConsortium Exchange A some-to-many marketplace consisting of a few powerful companies organized into a consortium and their trading partners

21 Page 21 e-Collaboration Marketplace Using the Internet to Activate the Supply Chain: Goal: The enablement of value chains based on collaborative and synchronized supply channel networks Characteristics: Activation of interoperable business systems Expansion beyond transaction management to true collaboration Provide for greater supply chain visibility and connectivity Communication of forecasts, inventories, capacities, and supply chain events

22 Page 22 e-Marketplace Regions Complexity of Internet Connection

23 Page 23 Three Regions of e- Collaboration Market- places: e-Marketplace Regions Basic B2B Commerce Provides marketing information and transaction functions via the Web – tactical advantage Supply Chain Management Collaborative Channel Management: serve customers with different value, and link supplier selection and transportation visibility with customer service functions Collaborative Inventory Management: provide inventory visibility beyond supplier chained-pairs

24 Page 24 e-Marketplace Regions (cont.) Supply Chain Collaboration Collaborative Forecasting and Replenishment: real-time broadcasting of demand across the supply chain Collaborative Product Commerce: deployment of cross-channel teams of developers and engineers to accelerate the time from product conception to product roll-out Collaborative Strategic Planning: provide for the development of channel vision and strategy Three Regions of e- Collaboration Market- places:

25 Page 25 Todays Technology Toolsets LogisticsFinancials Procure- ment Sales & Marketing Manu- facturing Productive Resources ERP System Supply Chain Management Enterprise Boundary 1. Channel capability-to-promise 2. Collaborative planning 3. Supply chain event management 4. e-Logistics 5. Message-centric visibility 6. Inbound WMS/TMS APS CPC CRM 1. e-Selling/e-Service 2. CPFR 3. Sales force automation 4. Collaborative demand planning 5. e-Product configuration 6. POS integration 7. Data Warehousing 8. Outbound WMS/TMS E-Finance e-Business Universe Portals B2B e-MRO Data Warehouse EDI

26 Page 26 e-Business Enablers & Benefits Channel Function Technology Enabler Channel Benefit Channel Supply Management Reduced inbound channel inventories and total costs Alignment of channel demand/ supply Direct feed of requirements data into ERP backbone Metrics for event notification and exception management Multi-partner ERP data integration EDI, Web-driven synchronized channel requirements Collaborative supplier base B2B exchanges e-Logistics/4PL services Product and Service Processing Capacity optimization Flexible/agile manufacturing Alignment of demand with material planning Supply chain visibility Minimize channel inventories Collaborative product and service wrap design Collaborative planning, CPFR initiatives Collaborative supplier base e-Procurement initiatives

27 Page 27 e-Business Enablers & Benefits Channel Function Technology Enabler Channel Benefit Channel Customer Management Proactive e-Relationships Market of one Responsible and reliable fulfillment channel functions Mass customization Channel demand transparency e-CRM Data Warehousing e-Service/Call centers Marketplace metrics Real-time, digital customer demand feedback Channel Support Activities Better utilization of channel assets Effective channel decision- making Responsive and reliable fulfillment channel functions Scaleable channel aligned with actual demand e-Logistics/4PL services Customized delivery channels Real options management XML, Java, wireless communications technologies Interoperable IT platforms

28 Page 28 e-Marketplace Regions (cont.) Todays e- Business Marketplace Benefits: Increased market supply and demand visibility Price benefits from increased competition Increased operational efficiencies Improved partner and customer segmentation Improved supply chain collaboration Synchronized supply chains

29 Page 29 Whats Next Future of e- Business: Terrorism, war and recession has hurt e-business The hype and empty promises have soured the concept Continued requirements for cost management and workflow efficiencies Continued push for supply chain partner collaboration Technology advancements for interoperability and low cost

30 Page 30 Whats Next Future of e- Business: Heavy focus on the procurement side Growing power of PTXs and CTXs Growth of a portfolio concept to e-business and trading exchanges Power of e-Differentiation

31 Page 31 e-Business Enablers & Benefits Enabling the Supply Chain Universe

32 Page 32 Thanks For Attending! research dp&c

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