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Page 1
Welcome! researchdp&c
Page 2
“Education in Pursuit of Supply Chain Leadership”
researchdp&c
DISTRIBUTION
PLANNINGAND
CONTROL
RESEARCH
e-BUSINESS
AND ITS ROLE IN THE SUPPLY
CHAIN
Page 3
Meet David F. Ross, PhD, CFPIM
13 Years Manufacturing and Distribution Industries
17 Years MRP II, ERP, Enterprise Business Systems
CPIM (1988), CFPIM (1996)
6 Years APICS CPIM Instructor
1991 Romey Everdale Award
3 Books on SCM/Logistics -Foundation Book for MPR CPIM Exam
Meet Your
Session Leader
Page 4
Goals and ObjectivesSummary of
Session Goals
and Objective
s
A Broad, Executive Introduction to e-Business
Nature of Today’s Competitive Environment
Defining e-Business Terms
Four Phases of e-Business
Today’s Technology Toolsets
Benefits of e-Business
Page 5
What Has Happened To e-Business?
Rise and Fall of the
“New Economy”:
1999 – Estimates Business-to-Consumer (B2C)
would exceed $450 billion by 2004
Business-to-Business (B2B) would exceed $5 trillion by 2004
Companies would spend $1.7 trillion in technology just to get in the game
If you were not trading through the Web you would
be “Amazoned” or “Enroned” and sink into irrelevance!
Page 6
What Went Wrong?
e-Business
Post-Mortem:
Over-excessive optimism
Technologies that were not yet ready
Problems with connectivity and interoperability
Huge infrastructure cost
Invalid business models and faulty practices
Risk, risk, and more risk!
Page 7
Internet Is Here To Stay!
Key Indicator
s:
Changes in technology infra-structures and interoperability
Expanding Usage and Popularity
Utilization by software developers
Declining costs
End of hype – growth of real productivity
Page 8
The Business World Has Changed
Power of the customer demanding personalization, super service, convenient solutions, product and service customization, low cost
Abandonment of strategies based on the vertical integration of resources
Explosion in global trade and outsourcing has changed the basics of competition
Key Drivers of Business
and Technology Today:
Page 9
The Business World Has ChangedKey
Drivers of Business
and Technology Today:
Companies need to be agile, lean, efficient, and more responsive to the customer, spawning virtual organizations and interoperable processes
Product cycle management that requires leveraging collaborative supply chain relationships
The Internet has truly revolutionized everything – the supply chain is the medium for competitive advantage
Page 10
Conventional Supply Chain
Stage 1
Supplier
RawMaterials
Stage 2
PrimaryManufacture
BulkProcessing
Stage 5
Retailer
DirectSales
Stage 3
FinalAssembly
Stage 4
Wholesaler
SupplyChannel
Stage 6
Customer
ConsumptionFinishedGoods
Product Flow
Materials and Finished Goods
Transportation and Delivery
Serial flow of goods and information through the Supply
Chain
Page 11
The Bull Whip Effect
Chained Pairs
Relationship Model:
Manufacturer1st Tier
Supplier2nd TierSupplier
Requirements Flow
Materials Flow
Requirements Flow
Materials Flow
Distributor
Requirements Flow
Materials Flow
Manufacturer
Materials Flow
Requirements Flow
Retailer
(Pair 1) (Pair 2)
(Pair 3) (Pair 4)
Page 12
Today’s Networked Value Stream
SupplyFunctions
Enterprise Boundaries
Supplier
Customer
Supply ChainEcosystem
Demand
DigitalData
Fulfillment
Internet Linkages
Customer
Functions
CoreCompanyEnablers
Supply ChainEcosystemSupplier
Supplier
Supplier
Supplier
Supplier
Supplier
Customer
Customer
Customer-focused, collaborative, agile, scalable, fast flow, digitized
networks
Page 13
Defining Terms
Defining Key e-
Business Terms:
☛ e-Business An inclusive term used to describe all of the business relationships driven by and operating with the Internet
☛ e-Commerce Refers to the process of performing transactions utilizing the Internet
☛ e-Fulfillment Activity of physically delivering products and services placed in the network supply system through e-commerce transactions
Page 14
Defining Terms (cont.)
☛ Business-to-Business (B2B)Use of Internet, e-commerce applica-tions that enable companies to sell goods and services to other businesses
☛ Business-to-Consumer (B2C) Use of internet, e-commerce applica-tions that enable companies to sell goods and services directly to the customer
☛ e-Procurement Automation and integration of the purchasing process through the use of Internet B2B trading exchanges
Defining Key e-
Business Terms:
Page 15
Defining Terms (cont.)
☛ Collaborative CommerceA business strategy that seeks to utilize Internet technologies to enable closer collaboration and interoper-ability of channel network partners
☛Trading Exchanges
e-Marketplaces Web sites (both private and public) focused on optimizing, synchronizing, and automating selling, buying, and fulfillment.
Defining Key e-
Business Terms:
Page 16
Four Phases Of e-Business
Incr
easi
ng
Bu
sin
ess
Val
ue
Increasing Business System Complexity
I-Marketing
e-Commerce
e-Business
e-Collaboration
1995-1998
1997-2000
1998-2003
2001-2005
-Marketing medium- Product &
service repository- Static
content
- Transactions- Customer
interaction- On-line catalogs,
bidding and personalization- B2C models- Electronic
payment
- B2B models- Extended value
chain- Procurement &
resource management- CRM- Virtual
marketplaces- ERP integration- Core competency- Content mgmt.
- Convergence of B2B models-Global
knowledge exchanges- Interoperative
value chains- Collaborative
processes- Speedy, agile,
scalable supply chains- Real-time
information sharing partners
Phase 1
Phase 2
Phase 3
Phase 4
Page 17
I-MarketingLeveragi
ng the Web for
Marketing
Products and
Services:
Goal: Provide information about company product/service wrap through the Internet
Characteristics:☛ Brochureware: information browsers
☛ Static text and graphics
☛ Access to printed product/service publications
☛ Catalogs and pricing
☛ Not transaction capable
☛ No interaction possible with the customer
Page 18
e-Commerce StorefrontPerformin
g Transactio
ns and Interactio
n Using the Web:
Goal: Provide customers with ability to buy and sell using the Internet
Characteristics:☛ Web-site personalization, self-service,
interactive shopping carts, bid boards, credit card payment, on-line communities
☛ Budding and auctioning
☛ e-Tailing and consumer portals
☛ Consumer care/customer management
☛ Web-site branding
☛ Electronic bill payment
Page 19
e-Business MarketplacesPerforming
Business-to-
Business Transactio
ns:
Goal: The transaction of products and services between businesses (B2B)
Characteristics:☛ Resembles traditional business
purchasing: long-term, symbiotic, and relationship based
☛ Uses e-Commerce functions and business transaction types
☛ Focused on the use of trading exchanges
☛ Used for MRO purchasing
☛ Slow expansion to production inventory purchasing
Page 20
Types Of Exchange
Three Types of Trading
Exchange
Independent ExchangeA many-to-many marketplace composed of buyers and sellers networked through an independent intermediary
Private ExchangeA closed marketplace dominated by a channel master composed of internal business units and preferred business partners linked by a single point of contact, coordination, and control
Consortium ExchangeA some-to-many marketplace consisting of a few powerful companies organized into a consortium and their trading partners
Page 21
e-Collaboration MarketplaceUsing the
Internet to
Activate the
Supply Chain:
Goal: The enablement of value chains based on collaborative and synchronized supply channel networks
Characteristics:☛ Activation of interoperable business
systems
☛ Expansion beyond transaction management to true collaboration
☛ Provide for greater supply chain visibility and connectivity
☛ Communication of forecasts, inventories, capacities, and supply chain events
Page 22
e-Marketplace Regions
Val
ue
of I
nte
rnet
Con
nec
tion
Supply ChainManagement
CollaborativeProduct
Commerce
CollaborativeStrategicPlanning
CollaborativeForecasting &Replenishment
CollaborativeChannel
Management
Supply ChainCollaboration
CollaborativeInventory
Management
CatalogManagement
B2BTransactions
Basic B2BCommerce
Complexity of Internet Connection
Page 23
Three Regions of
e-Collaboration Market-
places:
e-Marketplace Regions
Basic B2B CommerceProvides marketing information and transaction functions via the Web – tactical advantage
Supply Chain Management
☛ Collaborative Channel Management: serve customers with different value, and link supplier selection and transportation visibility with customer service functions
☛ Collaborative Inventory Management: provide inventory visibility beyond supplier chained-pairs
Page 24
e-Marketplace Regions (cont.)
Supply Chain Collaboration
☛ Collaborative Forecasting and Replenishment: real-time broadcasting of demand across the supply chain
☛ Collaborative Product Commerce: deployment of cross-channel teams of developers and engineers to accelerate the time from product conception to product roll-out
☛ Collaborative Strategic Planning: provide for the development of channel vision and strategy
Three Regions of
e-Collaboration Market-
places:
Page 25
Today’s Technology Toolsets
LogisticsFinancials
Procure-ment
Sales &Marketing
Manu-facturing
ProductiveResources
ERPSystem
Supply ChainManagement
EnterpriseBoundary
1. Channel capability-to-promise2. Collaborative planning3. Supply chain event management4. e-Logistics5. Message-centric visibility6. Inbound WMS/TMS
APSCPC
CRM
1. e-Selling/e-Service2. CPFR3. Sales force automation4. Collaborative demand planning5. e-Product configuration6. POS integration7. Data Warehousing8. Outbound WMS/TMS
E-Finance
e-Business Universe
Portals
B2Be-MRO
DataWarehouse
EDI
Page 26
e-Business Enablers & Benefits
Channel Function
Technology Enabler Channel Benefit
Channel Supply Management
Reduced inbound channel inventories and total costsAlignment of channel demand/ supplyDirect feed of requirements data into ERP backboneMetrics for event notification and exception management
Multi-partner ERP data integrationEDI, Web-driven synchronized channel requirementsCollaborative supplier baseB2B exchangese-Logistics/4PL services
Product and Service Processing
Capacity optimizationFlexible/agile manufacturingAlignment of demand with material planning Supply chain visibilityMinimize channel inventories
Collaborative product and service wrap designCollaborative planning, CPFR initiativesCollaborative supplier basee-Procurement initiatives
Page 27
e-Business Enablers & Benefits
Channel Function
Technology Enabler Channel Benefit
Channel Customer Management
Proactive e-RelationshipsMarket of oneResponsible and reliable fulfillment channel functionsMass customizationChannel demand transparency
e-CRMData Warehousinge-Service/Call centersMarketplace metricsReal-time, digital customer demand feedback
Channel Support Activities
Better utilization of channel assetsEffective channel decision- makingResponsive and reliable fulfillment channel functionsScaleable channel aligned with actual demand
e-Logistics/4PL servicesCustomized delivery channels“Real options” managementXML, Java, wireless communications technologiesInteroperable IT platforms
Page 28
e-Marketplace Regions (cont.)Today’s e-
Business Marketpla
ce Benefits:
Increased market supply and demand visibility
Price benefits from increased competition
Increased operational efficiencies
Improved partner and customer segmentation
Improved supply chain collaboration
Synchronized supply chains
Page 29
What’s NextFuture of
e-Business:
Terrorism, war and recession has hurt e-business
The hype and empty promises have soured the concept
Continued requirements for cost management and workflow efficiencies
Continued push for supply chain partner collaboration
Technology advancements for interoperability and low cost
Page 30
What’s NextFuture of
e-Business:
Heavy focus on the procurement side
Growing power of PTXs and CTXs
Growth of a portfolio concept to e-business and trading exchanges
Power of e-Differentiation
Page 31
e-Business Enablers & Benefits
Enabling the Enabling the Supply Supply Chain Chain
UniverseUniverse
Page 32
ThanksFor
Attending! researchdp&c