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Supply Chain Management & eCommerce Technology presented by: Nachiappan Annamalai Overview • • • • Supply Chain Management - Whazzit SCM today - Problems Solutions - e-Commerce Examples of present systems tradematrix.com - i2 Technologies • e-Commerce - Application to SCM Framework • Future of SCM & e-Commerce • Suggestions World Internet Population 3/99 • World Total • Africa 158.50 MILLION 1.14 million • Asia/Pacific 26.97 million • Europe 36.55 million • Middle East .88 million • Canada & USA 88.33 million • South America 4.63 million Effective SCM involves • Managing Supply Chain as a single entity • Recognizing end user service requirements Customer Utility = f(time, quantity, place) • Recognizing time as basis of competitive advantage • Effective use of Inventory • Continuos Improvement Time Involved in the Process Effects of Time Consuming SCM • • • • • • • Excessive Inventory - $ 30 Billion ( Grocery Supply Chain alone) Poor Product forecast Poor Capacity Planning Poor Customer Service High Corrective Costs - Overtime, Subcontracting, Trans. Prob. Optimized Supply Chain as a Whole entity - Not Possible Internationalization - Not possible Distribution Other Problems • • • • Demand Forecast Updating Order Batching Price Fluctuation Shortage gaming Demand Forecast Updating • Amplification of Fluctuation when ones goes up the Supply Chain • Lead Time importance Order batching • Orders in Batches - Compulsion - Time & Cost Constraints - Transportation Problems - FTL - Full Truck Load • Overlapping of Order Cycles - Leads to more variability • MRP Jitters Price Fluctuations • Forward Buy • Role of Price Fixing - Erratic Demand • Variation in Buying Quantity is much bigger than the variation of the Consumption rate Shortage Gaming • Phantom Orders - When & Why does it Occur • Examples - Motorola and its Distributors Air touch Communication & Baby Bells - IBM Aptiva Model - Assumption of Retailers Counteractions • One and only best Solution E-Commerce - Information Sharing - Channel Alignment - Operational efficiency - Intelligent Optimization Agents - Transaction Processing - Money Transactions I2 Technologies - Tradematrix.com an efficient SCM e-Commerce system Services the System Provides • • • • • • • Direct & Indirect Procurement RFQ - (Request for Quote) Collaboration Demand Collaboration Holisitic Customer Management Buyer & Seller Services Service Providers Marketing Services Tradematrix.com - Framework • Front end - Portal - Customer Management - Communication Systems - Money Transactions • Back end - Optimization - Transaction Processing System The Process of Commerce • Buyers and sellers find each other – Communication: advertising and marketing – Intermediaries (dealers, distributors, reps) • Negotiation – Agents (buyers, lawyers) • Transaction – Contract – Payment (or many payments) The Process of Commerce • Order fulfillment – Manufacture – Delivery • Post-sale events – Customer service – Reorder, restock • Accounting – Are we making a profit? • Data analysis – Who’s buying the stuff? The eCommerce Process • Transaction – Transaction processing, Databases – Electronic Payment Systems, – Computer Security, – System Reliability • Order fulfillment – Manufacture (manufacturing systems) – Delivery (tracking systems) eCOMMERCE TECHNOLOGY • • • • • • Networks Internet Programming Multimedia Databases Transaction processing • • • • • Security Electronic payment Search engines Intelligent agents Data mining The eCommerce Process • Which of the steps are “bittable”? • Buyers and sellers find each other – Communication (via Networks, the Internet, Programming and Information Retrieval) – Human-Computer Interaction, Multimedia – Intermediaries • Disintermediation • Negotiation – Electronic Negotiation, Intelligent agents The eCommerce Process • Post-sale events – Customer Service and Help Facilities – Reorder, restock • Accounting – Transaction processing – Interoperability between online and legacy systems • Data analysis – Data Mining Ideal e-Business System • Front End - Portal - Communication Systems - Interface with Mobile Devices & GPS - for access to real time info. - Money Transaction - Customer Management Systems • Back End - Optimization - Decision Support Systems & Intelligent Agents - Transaction Processing System - Prioritizing Systems - Shows Contradictions - Forecasting System with Responder- Capability to match System Dynamics Manufacturing Services • Front End System Functions - Product Design & Quality Specification - Customer Management & Communication System - Money Transactions • Back End - Standard time & Least Cost - Supply Time - Optimization - CNC Machine Code Conversion - Route data to CNC Machine would lead to total automation - paperless industry