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CCAA

e-Commerce Supports SMESupply Chain Activities in Wales

Mike OShea

Clemdale Associates

February 2003


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e-Commerce Supports SME Supply Chain Activities in Wales 2

Main Activities of WDA

Regional SME Programme To provide an Independent Source of

information on e-Commerce related

subjects. To provide businesses with

Development and ImplementationSupport and Expertise

To promote an active e-CommerceBusiness Community in Wales.


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e-CommerceA convergence of different methods of

business communication into a single

concept Use linked to the re-engineering of

business processes

Driven by business to control costs,enhance efficiency & gain competitiveadvantage


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The Changing Business

Environment New market conditions:

Specialisation

Subcontracting Global Sourcing

Technological developments in the areas ofproduction, transportation and

communications More elaborate capabilities of people to

exploit the possibilities


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Global Sourcing Trends Increase in supplier/purchaser relationships mediated

by computer networks - little face to face interactionand low costs;

Increase in strategic alliances and partnershipsthrough use of Electronic Communications leads to: long term and more co-operative relationships

expanded use of electronic commerce and EDI

early involvement by suppliers in new product development

a dramatic reduction in the supplier base

agreements on a schedule of price reductions by suppliers

Achievement of best price, quality, delivery andflexibility


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e-Commerce improves

Business Performance

Electronic Commerce

Global Sourcing &

Selling

Strategic

Partnerships

Cost ControlCustomer Service


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Implementing e-Commerce Building the business case

customer / supplier analysis

business analysis and cost justification - not justpaper procedures but strategic improvements

evaluation of technology and systems options

Secure commitment - internally & externally


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Implementing e-Commerce Develop an Implementation Strategy

agree objectives that support business needs

identify individual and joint responsibilities spell out timescales and milestones

Review business processes

understand the process flows document methods of operation

identify process improvements


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Implementing e-Commerce Agree an approach following evaluation of :-

the process

the information the data elements required

Choose an ICT Infrastructure and Software

Pilot, Test, Go Live

Review Project and Development Strategy


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Projects UndertakenSector No. of

ProjectsProposalPrepared

Phase IBusinessAnalysis

Phase II FullDevelopment/

Implementation

Manufacturing 9 9 6 6

Office/ Ind Services 7 7 4 4

Electrical/ Electronics/Telecommunications

6 6 3 2

Industrial Engineering 6 6 1 2

Plastics (various) 4 4 2 1

Food Processing 3 3 2 1

Distribution/ Logistics 3 3 2 1

Freight Forwarding 2 2 1 1

Textiles 2 2 1 1

Agriculture related 2 2 2 2


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Business Relationships28%

72%

Customers

Suppliers


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Applications Developed10%

18%

12%

24%

28%

8%

Warehousing Controls , JIT

Product Catalogues/Pricing

Orders & Order Amendments

Schedules & Forecasts

Payments & Invoicing

Despatch, Delivery Logistics


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Business Advantages for SMEsCost

SpeedAccuracy

ImprovedTrading

Relationships ReducedLead Times

Reduced Errors Reduced StockIncreased Market

Share Lower OverheadsValue


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Main Benefits Reported

0 20 40 60 80 100

Cost S avings

Time Savin gs

Competitive Advantage

Improved Cu stome r/Supplie r Rel ations

Widene d use of el ectronic Systems

Increased tradin g opportuntie s

Improved usefulness of systems

Better customer service

Employme nt Growth/rete ntion

Improved accountabili ty

Ben eficiaries - own organisation

Ben eficiaries - customers

Ben eficiaries - supplie rs

Significant

Moderate

None


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Main Inhibitors Cultural Resistance - changing

Lack of management awareness - improving

Reluctance to invest business nottechnology

Weak commercial incentiveunderstandingbusiness opportunity and benefits

Systems development - complexities Bureaucracy - Public Sector improving

Security secure trading issues


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Summary

Utilising e-Commerce in the

supply chain is a business not atechnology issue


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Mike OShea

Clemdale Associates

February 2003


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Case Studye-Commerce in Supply Chain Management

Mike OShea

Clemdale Associates

February 2003


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CPM Gifts LimitedE-Commerce Project

Case Study

www.cpm-gifts.com


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Company Overview The company was formed in 1985 in

Cardiff and currently employs 55 people

CPM produce an extensive range ofpersonalised products: Ceramics and glassware decoration

Textile print automatic and manual Computerised design studio

Warehouse in Cardiff


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Key Customers Clinton Cards

BHS

Tesco

Duty Free Operators Worldwide

London Souvenirs WRU (Welsh Rugby Union)


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Project ObjectivesThree Primary Objectives

To provide a solution for an on-line supply

chain system utilising the web; To complete a detailed business analysis for

integrating the website with both productionand commercial systems;

To implement online marketing supports toenable a one-stop shopping experience.


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The Challenges To present the entire product range online to

best advantage to maximise sales andrevenue potential;

To integrate the customer ordering processwith internal systems;

To manage supply chain activities more cost

effectively; To introduce new product ranges facilitated

by an e-Commerce environment.


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Guiding Principles Ensure that all potential customers have

information which is relevant to them;

Customise the sytem for each profile ofcustomer;

Provide several ways of accessing productdata as quickly and easily as possible;

Provide marketing ideas as to how theproduct range may be used and extended.


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Types of Content

CPM Home Page andcorporate identity

Textiles

Ceramics

Glassware Gifts

Souvenirs Named gifts

Gifts for all seasons

Name droppers

Memorabilia

10 main types of content presented:


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Systems Overview & FeaturesSystems development based on:

Visitors to the CPM website will be able to orderany of the CPM range online

Range of products will include the personalisationof Named Mugs

The visitor will be able to select a mug from thestock range and add it to their shopping cart

They will specify the name they want on the mug Once they have finished shopping they will go to

the checkout and complete their order


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Systems Overview & Features Completed orders are collected by CPM on a regular

basis throughout the day

Any orders for Personalised Named Mugs areautomatically identified and stored in a local database

These orders are held in a queue until there aresufficient orders to meet the production criteria

The Art department is automatically notified that abatch of orders is ready and can be released


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Systems Overview & Features Releasing the orders automatically populates

the the appropriate template with the text forthe mugs required.

Internal paperwork is raised and the ordersproceed through the Named Mug productionprocess.

At the end of the production process thesystem automatically generates thepaperwork required to complete the orderand despatch it to the customer.


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Business Benefits Strategic, marketing and overall business objectives

met;

New line of business implemented for personalised

products; Integration of online ordering and production

achieved for Named Mugs;

Key personnel up-skilled to operate and administer

new systems; e-culture introduced throughout CPM;

Key customers retained and business relationships

improved.


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Supply Chain Performance

Improvements Increased business turnover and better cash flow

facilitated by on-line payments;

More orders and broader client base;

e-Commerce has enabled immediate communicationwith organisations and in particular with internationalmarkets;

New business ventures and channels to market

established; Worldwide access to supply chain and competitors;

Niche market for personalised products establishedand growing.


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Supply Chain Performance

Improvements Increased market transparency through use

of electronic catalogue;

Business activities and structures re-engineered to provide a more competitivepartnership position

Closer and more efficient co-operation in

production and scheduling activities Long term strategic benefits through locking

in main customers via e-Commerce.


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