SHARING INFORMATION ACROSS THE SUPPLY CHAIN Dr. Ron Lembke

Supply Chain Technologies ASN -- lets customer know exactly what has been sent Drop Shipping -- Supplier sends directly to the store, not to store’s warehouse Computer sent to house via UPS 3PL: Third-party Logistics Provider Trucking companies, manage inventories, anything you don’t want to do

Bullwhip Effect Lack of information sharing can cascade through the supply chain. Small changes at retail level lead to huge swings at manufacturing, like a bullwhip Several retailers order all at once, distributor thinks sales have jumped, orders a much bigger order, etc. Better: sales info shared along “Value Chain.” Graph: Disney & Towill, 2006, Supply Chain Mgt: An Intl J

Electronic Data Interchange My computer talks to yours, tells you exactly what I want to order, when You fill out a form, very compressed message sent, viewed as form Software, hardware expensive to implement Sample Purchase Transaction ST88850*1Transaction Set identifier BEG*00*NE* **010698Beginning of Segment PID*X*08*MC**Large WidgetDescription of Product P01**5*DZ*4.55*TDBaseline Item Data CTT*1Transaction Totals SE*1*1End of Segment

XML e X tensible M arkup L anguage Standard for E-Business XML provides self-describing information. Easier to implement or modify than EDI. Expected to eventually, replace EDI, but not nearly as fast as was expected. Standardization through RosettaNet efforts

XBRL Standardized set of tags for financial transaction Identifies data as being Q3 EBITDA, 2011, for WidgetCo. No rekeying, fewer errors, easier research SEC required for external reporting, 500 largest public cos. XBRL.org

Video conferencing Nothing can go wrong now

Summary Bullwhip effect: small changes can have huge consequences Sharing information can be very valuable Technologies: EDI, XML, XBRL Importance of face to face