D-BP-ISP An Electronic B2B Procurement and ERP Integration Model for SC Optimization.
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Transcript of D-BP-ISP An Electronic B2B Procurement and ERP Integration Model for SC Optimization.
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D-BP-ISP
An Electronic B2B Procurement and ERP Integration Model for SC
Optimization
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ERP 1
• Cross-functional Integration and Support
• Management of Core Business Processes– Accounting/Finance– HR/Payroll– Manufacturing– Sales/Distribution
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ERP 2
• ERP
• APS
• B2B procurement
• BI
• CRM
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CRM
ERP
B2B Procurement
BISCM
Tier 1 Suppliers
N Tier Suppliers
Customers
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D-BP-ISP Model
• Step 1 - Definition of SCM
• Step 2 - Business Process Integration
• Step 3 - Information Integration
• Step 4 - Systems Integration
• Step 5 - People Integration
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HOW TO ADD MORE VALUE
SC OPTIMIZATION
ERP + B2B PROCUREMENT
D-BP-ISP
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SC Defined
A set of integrated business processes throughout the enterprise and/or extended enterprise that optimize the delivery of goods, services, and information from suppliers to customers.
The Gartner Group
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SCM Dimensional Definition
SCM
SCP
OrderFulfillment
ProductDevelopment
CustomerService
SCE
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Step 3 – Information Integration
This step focuses on Information sharing
functionality necessary for enabling SCM.
This step is mainly reflected in ERP Systems
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ERP System Information Sharing
• Real-time visibility of information flow and effective reporting capability
• Robust information back-office for most enterprises.
• Provides Key Performance Indicators(KPIs)
• Provide advanced planning and scheduling (APS) functionality
• Limited to historical business, hard to anticipating advantageous emerging business opportunities in the supply chain.
• Provides little support on extended integration among trading partners in the supply chain.
FunctionalityFunctionality DrawbackDrawback
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Step 3 – Information Integration Continued…
The information integration must be extended
to external trading partners for optimal
management and execution of the supply
chain.
Solution
Interenterprise and Intraenterprise real-time
data sharing.
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Step 4 – Systems Integrations
This step focuses on extending the benefit of
ERP to B2B procurement and vice versa.
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B2B Procurement
• Definition – “a set of purchasing processes extended to electronic trading communities with the goal of buying products, services and information.”
• Electronic trading communities – Internet, Intranet, Extranet.
• B2B Procurement Applications – Product catalogs and e-marketplaces
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B2B Procurement Benefits for SCM Optimization
• Providing real-time product quoting • E-marketplaces create an open sourcing
environment • Electronic trading communities reduce
user training costs and other costs through the Web
• Applications are usually designed to keep customer profiles
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ERP & B2B Procurement Integration• Goal - Achieving SCM optimization.• ERP provides efficiency on the back-end
phases while B2B procurement provides efficiency on the front-end phases of procurement.
• Online B2B workflow capabilities are extended to ERP
• B2B can be customized to individual buyer needs and ERP provides the backbone
• Trading partners can utilize each other’s system resources.
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B2B Procurement and ERP Systems Integration
ERPInformationBackbone
Web Clients
B2B ProductCatalogs
Bidding &Auction
B2BProductCatalog
B2BProductCatalog
E-Marketplace
Transport –HTTP over TCP/IPApplication-ORBs, MOMs, XMLData- ODBC,JDBC,DB Gateways
Integration Brokers:E-link, ActiveEnterprise, Inconcert
Intranet Extranet Internet
Web Clients
Web Clients
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Security Issues in Systems Integration
• Authentication should be strictly enforced at the firewall and application levels.
• Authorization should work in conjunction with authentication and should be based on roles.
• Confidentiality need to be implemented through S-HTTP, SSL and Public Key Encryption, etc.
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Step 5 – People Integration
This step focuses on the human capital
necessary to realize a successful integration of
B2B procurement and ERP.
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Three Roles of People Integration
• Business people
• IT professional
• Consultants
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Business People Qualifications
• Provide and continuously communicate the vision on how they will collaboratively achieve their SCM and business objectives.
• Ensure that resources are committed to accomplishing SCM optimization.
• Exhibit leadership • Program and project competencies• Solid understanding of information and network
technologies.
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IT People Qualifications
• Possess the most knowledge & experience of ERP with its infrastructures, systems and applications.
• Have solid experience & knowledge of Internet-based technologies and architectures.
• Have system integration experience & knowledge. • Possess good communication and teaming skills
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Consultants
• Play mediation roles in time of program and project conflicts
• Bring rare, scare specialty or technical skills that do not have long-term value to an organization
• Serve as mentors and coaches for the business people as well as the IT Professionals.
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Extended EnterpriseInternet Domain
D-BP-ISP
Extranet Domain
Manufacturer/ServiceOrganization
Intranet Domain
Wholesalers1st Tier Suppliers
DistributorsN Tier
Suppliers
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Major ERP, B2B, SCM Vendors
Oracle PeopleSoft
J.D.Edwards SAP Ariba
Harbinger CommerceOne
Elcom Manugistics
i2 Technologies
ERP B2B SCM
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Conclusion
• SCM optimization will be used as one of the enterprise strategies.
• D-BP-ISP is an integration model that enables SCM optimization by integrating B2B procurement and ERP.