Electronic Commerce Semester 2 Term 2 Lecture 26

Intranets & Manufacturing Today’s manufacturing companies are driven by a new set of operating requirements as they face intense global competition and significant unpredictability in both customer demand and material availability As customers insist on customised products at mass-produced prices, the pendulum has shifted in the direction of flexible, demand-driven manufacturing In such a competitive environment, companies need to reengineer operations to produce and distribute products effectively at low cost and high quality

Integrated Logistics Logistics is a relatively new discipline that grew out of the integration of materials management and physical distribution Logistics serves as a tool for identifying and effectively managing interim linkages in the supply chain Firms that operate in isolation are placing themselves at a competitive disadvantage Not only must firms collaborate internally across business functions, but also they must establish external linkages with other firms

Integrated Logistics (Contd.) Essential to optimising the supply chain is the integration of key inbound and outbound logistics operations to reduce order cycle times, improve service levels, and reduce operating costs Achieving these strategic goals demands efficient management of logistics operations that focus on optimum utilisation of products, materials, resources and space The logistics function can be divided inot supplier management, inventory management, distribution management and warehouse management

Supplier Management With customised manufacturing there is an increasing need to integrated inventory systems with purchasing and distribution planning The supply chain uses bills of distribution and sourcing rules to simultaneously plan the entire replenishment network, and then automatically release purchase orders to suppliers The ogal is to simplify routine transactions, reduce paper handline; and provide an electronic communications framework for daily procurement activities

Benefits of Supplier Management The trend in purchasing is to reduce the number of suppliers and get them to become partners in business in a win/win relationship The benefits are seen in reduced purchase order processing costs, increased numbers of purchase orders processed by fewer employees and reduced order processing cycle times

Inventory Management The goal is to shorten the order-ship-bill cycle When a majority of partners are electronically linked, information that was fax or mailed in the past can new be sent instantly Documents can be tracked to ensure they were received, thus improving auditing capabililities The inventory management solution should enable the reduction of inventory levels, improve inventory turns, and eliminate out-of-stock occurrences

Distribution Management The goal is to move documents related to shipping e.g. bills of lading, purchase orders and advanced ship notices Paperwork that typically took days to cycle in the past can now be sent in moments and contain more accurate data, thus allowing improved resources planning Logistics covers requirements with optimised purchasing operations, sophisticated warehouse management, and precise invoice auditing and materials management, as well as extensive plant management functionality

Warehouse Management The goal is to automate the warehouse distribution process, from receiving and put-away to picking up and deployment The goal is to optimise activity in all the functional areas: warehouse administration, receiving, product storage, picking and shipping