Introduction To E-Supply Chain Management

The advent of supply chain management: architecting the supply chain for competitive advantage

ContentI -II -III-IV-

Chapter 1

I- The rise of supply chain management

• In past what occurred outside of the four walls of the business was of secondary importance in comparison to the execution of strategies designed to effectively manage internal engineering, manufacturing, marketing, Seles and finance activates.• In contrast, a company's ability to look outward to its channel

alliances to gain access to sources of unique competencies, physical resources and marketplace value is now the measure of success.• Once a backwater of business management , creating ”chains” of

business partners has become one of a successful company's most powerful competitive strategy

II- Evolution of supply chain management• Logistics has always been about managing of the needs of

individual companies for product and service acquisition with the resources available from suppliers, on the one side, and distribution functions to meet the demand of the customer.

- stages of supply chain management

1. Logistics decentralization2. Total cost management3. Integrated functions4. Supply chain management5. e-supply chain management

1- first stage

• Logistics decentralization was a minor problem for most companies. By the early 1960s, however, changes in the business climate were forcing executives to rethink their logistics strategy.• To begin with ,expanding product lines, demand for shorter

cycle time, and growing competition had begun to expose the dramatic wastes and inefficiencies of logistics decentralization.

2- second stage

• The first, can be described as the concerted effort made by companies to centralize logistics functions into a single management system.• Second, it was hoped that centralization would facilitates

the application of the total cost concept to logistics. The objective of this strategy is to strive to minimize the total cost of logistics, rather than focus on reducing the cost.

3- third stage

• During the 1980s, enterprise executives became increasingly aware that focusing solely on the total cost of logistics represented a passive approach to channel management.

4- forth stage

• In the mid-1990s, the Integrated logistics and supply channel management to embrace the new realities of the marketplace.• The acceleration of globalization, the increasing power of

the customer demanding ever higher levels of service and suppliers agility, organizational reengineering, third-party outsourcing, and the growing of information technologies bad forced businesses to look beyond the integrated logistics paradigm in search for new strategic models

5-fifth stage

• Today the application of internet technology has the SCM concept to a new dimension• The highest level would be achieved by utilizing the power

of the internet the channel functions of the entire supply network into a single, enterprise, capable of optimizing core competencies and resources from anywhere at any time in the supply chain to meet market opportunities.

III- Defining e supply chain management

A. SCM definitionB. e-SCM definition

A- SCM definition

The integration of these activities through improved supply chain relationships to achieve a sustainable competitive advantage.

Life cycle processes comprising physical , information , financial , and knowledge flows whose purpose is to satisfy end-user requirements with products and service from multiple linked suppliers.

design, maintenance , and operation of supply chain processes for satisfaction of end user needs.

B- e-SCM definition

The emerging strategic capabilities of SCM and empowering technologies to be found in the internet provide the central themes of the book.

is a tactical and strategic management philosophy that seeks to network the collective productive capacities and resources of intersecting supply chain systems through the application of interne technologies in the search for innovation solutions and the synchronization of channel capabilities dedicated to the creation of unique , individualized sources of customer value.

IV- Characteristics of E-SCM

A. e-SCM enables a whole new view of the function of information in the supply chain

B. e-SCM enables enterprises to form customer-winning relationships with the supply chain

C. supply chain synchronization: trimming is everything

A- e-SCM enables a whole new view of the function of information in the supply chain1. Utilization of e-information2. Supply chain event management3. “real options” management4. Supply chain system integration5. Collaborative relationship

1- Utilization of e-information

• Today’s best companies are able to capitalize on e-information by architecting systems that permit real-time, simultaneous, rather than serial, use of supply chain data

2- Supply chain event management

• The ability of e-information to extend visibility and a degree of control throughout the supply chain has been facilitated by growth of numbers of real time software applications, • called supply chain process management (SCPM) and supply chain

event management (SCEM), that combine supply chain visibility, out-of-bounds alerts, alert resolution logic, and workflow enabled business rules• The goal of SCPM/SCEM is to empower companies with more

effective methods of managing supply chain processes and processes and providing managers with a window into key events and metrics in time to make corrective action.

3-“real options” management

• For companies in the supply chain to use time-based information to mitigate risks in designing channel processes or collaborative efforts.• On the customer service side, e-information enables

companies to integrate customer directly into their business system, while at the same time enabling the application of performance tools necessary to provide a perfect order every time, including the execution of all value-added service and billing.

4-Supply chain system integration

• The impact of e-SCM is measured by the depth and breadth of connectivity existing among channel members. • Integrative IT tools such as (XML, java, integrated operating

platforms, component-based e-business applications, wireless communications and others), are now providing leading-edge companies with the real-time information and interoperable networks necessary to improve customer service.

5-Collaborative relationship

• The goal is to facilitate channel collaboration on all levels, from product design to customer service, by exploiting real-time data through enter-enterprise internet-enabled network.

B- e-SCM enables enterprises to form customer-winning relationships with the supply chain

1. Establish a web-enabled network of channel partners2. Network-in customers3. Accelerate and improve decision making by integrating

business partners4. Meeting customer expectations

1-Establish a web-enabled network of channel partners• For most forward-looking companies, the key to success is managing a

network of partners generating an environment of trust between trading partners• Ex: DELL

2-Network-in customers

• In past companies met customer demand by offering fixed product lines, standardized prices, and relatively undifferentiated, one-size-fits-all solutions determined by the need of the average customer.• Today every customer is unique. Individual customers come to a supplier

expecting to receive customize product/service solutions that embody the attributes they value the most. And more and more customers are expecting to increase the velocity of the manufacturing, fulfillment, and associated services by utilizing the internet.

3- Accelerate and improve decision making by integrating business partners• In a competitive environment, your best customers are only

a click away from your competitor is critical.• “speed” is not about just doing thigh fast but also about

doing them better.• With the use of internet, customers order information can

move at the speed of light to each member of the supply network• The goal is to decide how the requirement should best be

delivered from alternate inventory stocking centers before the customer clicks over to a competitor.

4-Meeting customer expectations

• According to A.T. Kearney-sponsored survey of critical issues driving retail customers. The issue of price placed third among consumer requirements.• These service included everything form in-store assistance,

to the availability of customer service and product assembly and integration services.• The second most critical factor was product quality.• In the third place was the price.

C- supply chain synchronization: trimming is everything1. Develop a supply chain strategy that provides for avenues

of ongoing supply chain synchronization2. Provide for the establishment of avenues for e-SCS

operations excellence3. Identify and implement the right enabling technologies4. Design and implement new forms for organizational

relationship

E-SCS

advantages• Ability to network companies in a supply chain community• Ensuring that supply channel costs are minimized• Capturing the most profitable customers• Securing access to the most value-added suppliersGoal of e-SCS: utilize technology to achieve a direct linkage between demand and supply at all points in the channel network.

1-Develop a supply chain strategy that provides for avenues of ongoing supply chain synchronization

• An effective e-SCS strategy requires that channel trading partners begin by defining the objectives to be pursued by each individual channel node as well as the entire supply chain acting as a unified market-satisfying force.

2-Provide for the establishment of avenues for e-SCS operations excellence• The foundation for effective e-SCS is constructed on the

ability of entire supply chain networks to achieve superlative levels of collaborative operations excellence• Real collaborative operations excellence requires trading

partners to develop technology and organizational method to coordinate performance target complexity

3-Identify and implement the right enabling technologies• The basis of effective e-SCS can be found in the ability of

trading partners to synchronize their business systems.• Utilizing technology tools to achieve channel

synchronization is the objective of the logistics function

Thanks… The End