Supply Chain Information Systems and Electronic Commerce

Name: Supply Chain Information Systems and Electronic Commerce
Uploaded: 2017-08-27T21:17:21+00:00
Duration: PTM31S18
Description: Supply Chain Information Systems and Electronic Commerce

Supply Chain Information Systems and Electronic Commerce
Chapter 18 CENGAGE LEARNING Monczka – Handfield – Giunipero – Patterson

Purchasing & Supply Chain Management, 4e
Chapter Overview Evolution of e-SCM systems An overview of the e-supply chain Drivers of new supply chain systems and applications Enterprise resource planning systems Purchasing databases and data warehouses Purchasing & Supply Chain Management, 4e

Chapter Overview Technology for electronic communication between buyers and sellers E-sourcing suites E-sourcing basics Supplier relationship management E-sourcing and supply: fully integrated systems Purchasing & Supply Chain Management, 4e

The Electronic Revolution in SCM
Continued growth in web-based supply chain tools and solutions Greater sophistication in e-SCM system expenditures Fewer software providers Increasing capabilities Shorter project implementation life cycles Improved pricing and terms Purchasing & Supply Chain Management, 4e

Evolving e-SCM Tools Point-of-sale systems RFID Product life cycle software Bid optimization Computerized negotiation models E-mobile environment (laptops, PDAs, and smart cell phones) Purchasing & Supply Chain Management, 4e

Supply Chain Information Flows
Record and retrieve critical data Execute and control physical and monetary flows Automate routine decisions Support planning activities Support higher-level tactical and strategic decision making Move and share information cross firms and between users Purchasing & Supply Chain Management, 4e

Decision Making CRM Internal SCM SRM Strategic Decision Making
Supply Chain Planning Tactical Decision Making Routine Decision Making Transaction Processing

Transaction Processing
Information flows record and retrieve critical data Execute and control physical and monetary flows Little or no human intervention Bar code system to track location Purchasing & Supply Chain Management, 4e

Routine Decision Making
Oftentimes automated Exceptions dealt with manually Automated inventory management systems Order quantities Reorder points Purchasing & Supply Chain Management, 4e

Supply Chain Planning Decide on technologies for next generation of products or services Identify supply base requirements Forecasted demand Production decisions Projected cash flows Purchasing & Supply Chain Management, 4e

Strategic Decision Making
Search for data patterns or relationships Customer segment analysis Product life cycle forecasting “What if” analyses Need for flexibility for data manipulation and presentation Decision support systems (DSS) Purchasing & Supply Chain Management, 4e

SCM Systems Map Strategic Decision Making
Supplier Relationship Management (SRM) Applications Decision Support Systems (DSS) Customer Relationship Management (CRM) Network Design Supply Chain Planning Warehouse and Transportation Planning Tactical Decision Making Enterprise Resource Planning (ERP) Applications Routine Decision Making Warehouse Management and Transportation Execution Transaction Processing Suppliers Internal Supply Chain Customers Logistics

Enterprise Resource Planning
Large, dedicated business transaction processing and reporting systems Integrates all classic business functions together Uses common database Best for routine decision making and transaction processing Purchasing & Supply Chain Management, 4e

ERP System Overview Finance Accounting Finance Sales Operations Purchasing Central Database Purchasing & Supply Chain Management, 4e

SRM/CRM Applications SRM Applications CRM Applications Design collaboration Sourcing decisions Negotiations Buy process Supply collaboration Market analysis Sell process Order management Call and service center management Purchasing & Supply Chain Management, 4e

Network Design Applications
Where should we locate warehouses? How large should our transportation fleet be? Based on simulation and optimization modeling Purchasing & Supply Chain Management, 4e

Transportation - Warehouse Planning
Used to allocate fixed logistics capacity How many units should we ship from each warehouse to each demand point? Optimization modeling based on warehouse capacities, customer demand levels, and shipping costs Purchasing & Supply Chain Management, 4e

Execution Systems Kick off and control movement of materials between supply chain partners Where to store Where to go pick items up How many to pick Bar code systems Global positioning systems Purchasing & Supply Chain Management, 4e

Drivers of New SCM Systems
Internal and external strategic integration Globalization and communication Data information management New business processes Replacement of legacy systems Strategic cost management Purchasing & Supply Chain Management, 4e

Strategic Integration
Internal Use of common information between various sites and functional areas Enterprise resource planning systems External Need to link suppliers, distributors, and customers Forecast demand Balance supply and demand Purchasing & Supply Chain Management, 4e

Globalization and Communication
Differing cultures and geographies Need to: Manage global customers and suppliers Calculate total global logistics costs Increase leverage and component standardization Improve communication of global strategies Purchasing & Supply Chain Management, 4e

Data Information Management
New IS technologies (servers, wireless applications, and telecommunication) Need to effectively filter, analyze, and mine huge amounts of data to support managerial decision making Data warehouse systems Decision support systems Purchasing & Supply Chain Management, 4e

New Business Processes
Constantly evolving and changing technologies Reduce redundancies, delays, and waste Need to create a rapid response capability to adapt to changing customer needs and controlling costs Purchasing & Supply Chain Management, 4e

Replacement of Legacy Systems
Need to replace existing piecemeal chains of unlinked data systems Eliminate hardware and software incompatibilities and allow real time, fluid communication Computer networking Telecommunications Web-based applications Purchasing & Supply Chain Management, 4e

Strategic Cost Management
High volume of transactions to deal with Need to automate data capture in a single enterprise-wide data warehouse accessible to all users Timely and accurate information replaces inventory investments Purchasing & Supply Chain Management, 4e

ERP Systems Integrated transaction processing and reporting system Tracks organizational resources, including people, processes, and technology Creates a process logic for functional interaction Purchasing & Supply Chain Management, 4e

An ERP System Example Financial and Resource Controlling
Customer contact Sales order Inventory sourcing Delivery Customer billing Customer payment Sales order planning MPS MRP Planned order Production order Shop floor control Requisition Supplier selection PO Goods receipt Invoice verification Supplier payment Financial and Resource Controlling Logistics Controlling – Warehouse, Transportation Purchasing & Supply Chain Management, 4e

Basic Business Processes
Selling a product or service Customer order management process Making a product Production planning and execution process Buying a product Procurement process Costing, paying the bills, collecting Financial / management accounting and reporting process Purchasing & Supply Chain Management, 4e

ERP and Basic Business Processes
Adopting a single customer, product, and supplier database One master record with multiple views Common database Information is captured only once in real time Highly visible transactions Linked with the work flow Purchasing & Supply Chain Management, 4e

Implementing ERP Systems
Create a process map for every major process May need to reengineer processes prior to ERP to remove non-value-adding steps Could result in major organizational and culture change Need for well-defined processes before implementing Purchasing & Supply Chain Management, 4e

Implementation Steps Define the current process as is Define what the best-in-class business process should be Develop the system Work through all final bugs and then flip the switch Purchasing & Supply Chain Management, 4e

ERP Implementation Cycle
Discovery Design System build-out Testing Training Cutover Post-cutover support Source: Premier International, Chicago Purchasing & Supply Chain Management, 4e

Purchasing Databases An integrated collection of computer files capable of storing operational data essential for managing a department Minimal overlapping of information between files Allows different systems to use data contained in the database Efficient cross-referencing of data Purchasing & Supply Chain Management, 4e

Purchasing Data Warehouses
Type of decision support tool for collecting data from different resources and making it available to end users in a consolidated, consistent manner Combines data all in one place Maintained separately from the production system database Organized around informational subjects rather than by process Purchasing & Supply Chain Management, 4e

Purchasing Data Warehouses
Data is fed from multiple production databases Time-dependent, historical data Oftentimes aggregated Purchasing & Supply Chain Management, 4e

Purchasing Database Examples
Part files Supplier name and address files Historical usage files Open-order and past-due files Bill-of-material files Engineering requirements files Forecasted demand files Purchasing & Supply Chain Management, 4e

Communication Technology
Electronic data interchange (EDI) Standard form (EDI standards) Translation capability (EDI software) Mail service (EDI network) EDI and the Internet Purchasing & Supply Chain Management, 4e

An Ideal EDI Transaction
Buyer’s computer monitors real-time inventory status If replenishment needed, application program notifies translation software EDI P.O. is created and released against pre-negotiated blanket order Supplier’s computer receives order and translates into local format Purchasing & Supply Chain Management, 4e

Functional acknowledgement is automatically generated and sent to buyer EDI P.O. creates additional electronic transactions Buyer’s accounts payable application Buyer’s receiving file Supplier’s warehouse or factory file Supplier’s invoice file Purchasing & Supply Chain Management, 4e

When order is filled at supplier, advance shipping notice is created and transmitted to buyer Upon receipt of goods, actual shipping notice is entered into receipt file Purchasing & Supply Chain Management, 4e

Receipt notice is transmitted to buyer’s accounts payable application and to supplier’s invoicing system Invoice received by buyer is translated into buyer’s format and invoice, receiving notice, and P.O. are reconciled in a three-way match Purchasing & Supply Chain Management, 4e

Payment authorization is generated and transmitted to accounts payable, and payment is sent to supplier electronically Electronic remittance notice is sent to supplier, and buyer is credited for payment Purchasing & Supply Chain Management, 4e

EDI and the Internet Traditional EDI: Often requires a major investment due to application-specific technology Also requires payment of fees to VAN providers Different EDI standards Different customers have different EDI systems Not considered interactive Purchasing & Supply Chain Management, 4e

Virtual Private Network
Similar to a VAN but at much lower cost Hosted on a third party’s website and server Involves tunneling protocols for security May require a T1 line for large volumes of data Typically requires a common ERP platform at each end Purchasing & Supply Chain Management, 4e

Internet-Based EDI Internet Local ISP Router at HQ Remote Client
Virtual Private Network Local ISP Router at HQ Remote Client Corporate HQ – Local LAN Purchasing & Supply Chain Management, 4e

E-Sourcing Basics Sell-side systems Contain products or services from one or more suppliers Buy-side systems Controlled by buyers and tied into their intranets and extranets Third-party marketplaces Facilitate electronic purchasing process without buying or selling Purchasing & Supply Chain Management, 4e

Sell-Side Systems Typically free registration to users Supplier guarantees site security No investment by buyer Ease of access to many suppliers Inability to track expenditures or to control expenditures Offer varying degrees of security Purchasing & Supply Chain Management, 4e

Buy-Side Systems May be either self-designed or provided by e-sourcing suite suppliers Allow supply manager to manage the sourcing cycle, track spend, and exert control of contract management Requires initial investment and periodic updates Purchasing & Supply Chain Management, 4e

Third-Party Marketplaces
Independent firms who neither buy nor sell goods and services Vertical portals Narrow range of commodities Horizontal portals Broader range goods or services Purchasing & Supply Chain Management, 4e

SRM Systems Focused on decision support around a broad group of transactions Using both data and structured mathematical modeling Interactive system to assist in: Supplier selection Contract management Contract compliance Purchasing & Supply Chain Management, 4e

Characteristics of SRM Systems
Spend analysis Sourcing RFQ processing Reverse auctions Bid optimization Negotiation and total cost support P.O. issuance Receiving and inspection Contract management and compliance Supplier performance measurement and control Total cost reporting Price forecasting Purchasing & Supply Chain Management, 4e

Spend Analysis Determination of the dollar amount and volume of expenditures What goods and services purchased Which suppliers purchased from Where internal demand originates Spending reduction Purchasing & Supply Chain Management, 4e

Spending Reduction Consolidation of similar purchases Reduction in the number of suppliers Reduction of maverick spend Reduction of spend by other departments Increased use of more efficient contracting methods Development of methods to reduce risk and increase supply assurance Purchasing & Supply Chain Management, 4e

Spend Analysis Data Minimum of one year of spend data Develop similar categories of spend Assign spend to the categories Develop appropriate spend strategies Purchasing & Supply Chain Management, 4e

Request for Quotation A request to submit a proposal based on a set of specifications provided by a buyer Also known as the eRFx module Request for information (RFI) Request for proposal (RFP) Request for quotation (RFQ) Purchasing & Supply Chain Management, 4e

Reverse Auctions Electronics processes where multiple sellers vie for the business of a single buyer Results in price reductions Regular reverse auctions vs. rank reverse auctions Can often alienate suppliers by focus on price only Purchasing & Supply Chain Management, 4e

Steps in a Reverse Auction
Buyer decides which commodities are to be considered for a reverse auction Suppliers are initially evaluated and invited to participate Buyer writes RFQ and sends to all qualified suppliers Bidding process is conducted Buyer analyzes results and rewards business to chosen supplier Purchasing & Supply Chain Management, 4e

How to Conduct a Reverse Auction
Self-service Full-service third party provider Selection of commodity Supplier qualification Provide training Conducts auction Purchasing & Supply Chain Management, 4e

Reverse Auctions Buyer-initiated bidding event Utilizes electronic software that allows price or rank visibility to sellers Secure, online environment within a specified timeframe Goal is rational market price for the chosen commodity Reduces bidding time Purchasing & Supply Chain Management, 4e

Concerns of Reverse Auctions
Price reductions without regard to existing or future relationship May breed mistrust or lack of cooperation Realized price reductions may decrease over time Tactical, not strategic in nature Purchasing & Supply Chain Management, 4e

Phases of A Reverse Auction
Before the reverse auction Determine strategic importance of relationship Importance of price vs. other variables Offer phase Explaining the rules Execution phase Select appropriate form of contract Purchasing & Supply Chain Management, 4e

Considerations in Reverse Auctions
Price – most controversial Strategic importance of relationship Tradeoff between price and opportunity cost of not choosing suppliers who can contribute in non-price areas Market-based (bid-and-buy) approach vs. need for relationship and cooperation Purchasing & Supply Chain Management, 4e

E-Bid Optimization Permits suppliers to configure bids in any number of alternative ways Flexible bidding or expressive bidding Increases buyer’s ability to analyze and review bids optimally Uses mathematical algorithms in evaluating different supply and cost scenarios Purchasing & Supply Chain Management, 4e

Estimating Total Costs
Shipping Freight Duties Imports and tariffs Inventory costs Quality costs Purchasing & Supply Chain Management, 4e

Contract Management / Compliance
Oversight of the back end of the sourcing process Ensure that suppliers and users are in compliance with contract terms Other considerations Purchasing & Supply Chain Management, 4e

Other Considerations Price compliance Changes in terms Volume discount thresholds Payment schedules Due dates Contingencies for nonperformance Purchasing & Supply Chain Management, 4e

Performance Measurement
Visibility to open-item status Measures and analyzes supplier performance Use of electronic scorecards Automatic inquiry of item status Monitoring of order due dates Analysis of supplier performance Purchasing & Supply Chain Management, 4e

Performance Measurement
Capability to monitor planned receipts against due dates Provide immediate visibility to past-due items Flag those items likely to become past due Generate summary reports and compare to predetermined criteria Purchasing & Supply Chain Management, 4e

Benefits of Measurement
Input into supplier selection considering total cost, not just price Isolating supplier process inefficiencies Improving total cycle times Providing suppliers with reliable feedback on historical performance Purchasing & Supply Chain Management, 4e

Total Cost Reporting Generate timely management reports Provide visibility to entire materials process Use of data warehouses Frequency of reporting Real-time updating Data buckets Batch updating Purchasing & Supply Chain Management, 4e

Price Forecasting Length of item’s product life cycle Current life cycle phase Item’s price history Purchasing & Supply Chain Management, 4e

Integrated E-Sourcing and Supply
ERP systems Sourcing strategy module Supply chain planning module Distribution planning module Demand planning module Supplier collaboration module Purchasing & Supply Chain Management, 4e

Information Visibility
Sharing critical data required to manage the flow of products, services, and information in real time between suppliers and customers Share forecasts Manage inventories Schedule labor Optimize deliveries Purchasing & Supply Chain Management, 4e

Benefits of Information Visibility
Suppliers are aware of buyer’s needs in a timely manner Buyer is assured that shipments are received on time, every tome Allows problems to become more visible earlier Improved processes Purchasing & Supply Chain Management, 4e

Benefits of Information Visibility
Breaks down organization barriers Builds in supply chain visibility Manages by metrics Reduces decision cycle time Encourages decision making collaboration Reduces opportunity and problem resolution latency Purchasing & Supply Chain Management, 4e

Supply Chain Information Systems and Electronic Commerce

Similar presentations

Presentation on theme: "Supply Chain Information Systems and Electronic Commerce"— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

Supply Chain Information Systems and Electronic Commerce

Similar presentations

Presentation on theme: "Supply Chain Information Systems and Electronic Commerce"— Presentation transcript:

Similar presentations

About project

Feedback