1. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 “Global Value Chains”: Introduction Dr. Ray Sommer

2. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 Overview Note: You don’t have to understand all of today’s material. Our goal for this semester is to acquaint ourselves with these concepts and assess their influences in modern organizational supply chains This is an introduction only!

3. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 What’s going on in Business? Are companies still doing business in the same manner as they were 5-10 years ago? What has happened to the traditional Supply Chain model that functioned in the early 20 th century and through 1970’s, and 80’s?

4. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 Supply Chain Integration? What is it? How does it work? Is there a difference between Business data and Technical data?

5. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 Since 2005 change has come at a very fast pace? Integrated Systems (World-wide) –2010 - National/International Supply chains will mostly integrate at the business system level. –2015 – Procurement and Technical Data Transfer will be stable and secure across heterogeneous business systems. This is called the “Value Chain”

6. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 What does a Value Chain include? Warehousing Distribution Fleet management Warranty repairs Product returns Customer call centers Supply-chain management Service Parts Logistics Other Functions

7. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 How was the Value Chain implemented only two decades ago

8. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 Technology Provides the “Key” System Software Advanced Basic Operating System (Unix, NT, etc.) DBMS Provided by other Vendors Middleware CORBA OLE/DDE ODBC RemoteSQL CPI-C SQL APIs

9. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 Simple Integrated Direct Access “Old Model –1990’s” Business Environment DBMS SQL Receive Process SQL Response WWW Server Solution Internet Secure TCP/IP Data Stream (S-HTTP, SSL) Company Environment CGI Processor App. CGI* Call SQL Call * or JAVA, JAVAscript C/C++, VB, etc.

10. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 Middleware Technical Sub-System Applications Financial Accounting Controlling Asset Management Etc. Communications Module Linking Software Module Chan-1Chan-2Chan-n …….. Environment Integrated EC with OLTP DBMS SQL Receive Process SQL Response Company Environment CGI Processor App. SQL Call “true” OLTP Transaction Monitor SQL Call can initiate business Applications

11. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 How is the Value Chain implemented now?

12. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 Final Assembly and Distribution Fulfillment Contractors/Shippers Sub-contractors Primary contractors A Basic Global Model USA R&D US Specialized Suppliers Taiwan/Japan China VietnamChina MalaysiaIndia MalaysiaSingaporeHonk Kong Mexico/Saipan

13. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 Dis-Intermediation vs. Re- Intermediation Dis-Intermediation was “THE” value chain model of the late 20 th century among Domestic supply chains What does this term mean? Re-Intermediation is “THE” standard for Global supply chains in the 21 st century

14. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 “New Model – 2015” “BIG DATA” Exchange Application Server Transaction Monitor EDI Translator EDI Processor Message Handling Flat File APIAPI Customer Relationship Management (CRM) Catalog Management Systems Call Center Web Server Supplier Relationship Management (SRM) Business Intelligence Integrated Business Applications Environment

15. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 Our Primary Goals for the Next Six-Seven Weeks! Understand the “drivers” of the “global value chain model” Study logistics/transportation history in the context of manufacturing, production, demand, and social change since the early 20 th century

16. George Mason University The School of Public Policy Policy Analysis Center Copyright © R.A. Sommer, 2001 Course Material http://bambam.gmu.edu/PUBP716