1. Enterprise Resource Planning, 1st Edition by Mary Sumner
Chapter 9:
Supply Chain Management and the eMarketplace
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

2. Objectives Examine the supply chain participants
Acknowledge the interrelationships among business processes that support the supply chain
Understand the role of ERP in supporting eBusiness
Recognize how business intelligence tools are used in decision analysis
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

3. Supply Chain Management (SCM)
Integrated planning of the activities in a supply chain
Planning and control of flow of goods, services, money, and information
Allows customers and suppliers to partner together
Maximize responsiveness and flexibility
Reducing costs and paperwork
Gain sustainable competitive advantage
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

4. Supply Chain Relationships
Can be maintained by manufacturer
Continuous replenishment
Can link into POS systems
Cross-docking
Creates linkages between supplier and retailer
Lower costs
Better customer service
Increased profitability
Information sharing along supply chain
Translates sales transactions into production processes and material requirements
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

5. Supply Chain Management (SCM), continued
Benefits
Cost reduction
Inventory reduction
Cycle time improvement
Improved customer service
Integration requires commitment to strategy, process, organization, and technology
What linkages should be established
Communications
Data integration
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

6. © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

7. Partnership Evolution
VMI
Responsibility of inventory management on supplier
Supplier monitors level and replenishes inventories
No risk of stockouts
Quicker response time
Retailer reduces inventory and administration costs
Supplier gets more business
No expedited orders
Returned goods to supplier drops
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

8. SCM Evolution Electronic linkages facilitate JIT systems
Reduced costs, improved response time, increased responsiveness to customer
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

9. eBusiness Value Chain Evolution of virtual value chain
Provides information-based channels
Changed from transaction-based to contract-based relationships
Moved from vertically integrated to selective sourcing
Core firm outsources all parts of its business
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

10. eProcurement eProcurement RFBs on web Bidding more competitive
Free-market bidding levels playing field
Increased choices
Reduced transaction costs
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

11. B2B Hubs B2B hubs Spot sourcing of operating inputs
Systematic sourcing of inputs
Bring suppliers of similar or complementary products together at one web site
One-stop shopping
Automate transactions and reduce costs
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

12. eSupply Chain Facilitates real-time updates across chain
From consumers to suppliers
Greater ability to fill orders
Better understanding of customer needs
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

13. Business Intelligence with ERP Data
Data warehouse
Repository for making management decisions
Data integrity accomplished by cleaning
Consistent formatting applied
Data mart
Data storage for specific set of users
Special data analysis
Data mining
Analysis of data for trends, sales forecasting, inventory management
Identifies problem, develops research, collects and analyzes data
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

14. © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

15. Future of ERP Increased integration through SCM
ASPs will provide cost efficiency and access to latest technology
Netsourcing
Renting ERP services, applications, and infrastructure over web
Additional risks in migration, contracts
Internal IT capabilities must be maintained
Application software integration of legacy systems with ERP
Plug and play
Flexible, modular
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

16. Case: Data Solutions
Specializes in network implementation and management
Provides network services to companies with no internal networking analyst or IT manager
Uses legacy accounting software for financial accounting and financial management
Added billing package for client services
Wants CRM
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

17. Case: TechKnowledge Disitributor of presentation technologies
Wants to netsource back-office functions
Has no internal IT capability
Wants and ERP vendor via hosting arrangement
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

18. Featured Article: Leveraging the ERP Backbone?
Dow Corning implemented SAP’s Business Information Warehouse
Integrate global business processes
Gain efficiency and reduce costs
Wanted to fully automate
Improve business intelligence
Consolidate internal and external information
Replaced legacy systems on mainframes
Beta-tested system
Important to evaluate software with all details decided
Hopes to facilitate rapid scale-up of data warehouse capabilities
Vital to business intelligence infrastructure
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

19. Summary
Supply chain management offers an integrated planning and control of goods, services, money, and information between suppliers and customers
Produces lower costs and reduced inventories
Improves customer service
Increases profitability
Virtual value chains provide information-based channels
Contract-based
Applies selective sourcing instead of vertical integration
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner

20. Summary, continued eProcurement employs web-based RFBs
More competitive and more choices of suppliers
eSupply chains facilitate real-time updates, responding to customer needs
Business intelligence is increased by mining data warehouses and data marts
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner