Download Supply Chain Management and the eMarketplace

Enterprise Resource Planning, 1st
Edition by Mary Sumner
Chapter 9:
Supply Chain Management and the
eMarketplace
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-1
Objectives
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Examine the supply chain participants
Acknowledge the interrelationships
among business processes that
support the supply chain
Understand the role of ERP in
supporting eBusiness
Recognize how business intelligence
tools are used in decision analysis
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-2
Supply Chain Management
(SCM)
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Integrated planning of the activities in a
supply chain
Planning and control of flow of goods,
services, money, and information
Allows customers and suppliers to
partner together
– Maximize responsiveness and flexibility
– Reducing costs and paperwork
– Gain sustainable competitive advantage
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-3
Supply Chain Relationships
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Can be maintained by manufacturer
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Cross-docking
Creates linkages between supplier and
retailer
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Continuous replenishment
Can link into POS systems
Lower costs
Better customer service
Increased profitability
Information sharing along supply chain
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Translates sales transactions into production
processes and material requirements
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-4
Supply Chain Management
(SCM), continued
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Benefits
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Cost reduction
Inventory reduction
Cycle time improvement
Improved customer service
Integration requires commitment to strategy,
process, organization, and technology
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What linkages should be established
Communications
Data integration
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-5
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-6
Partnership Evolution
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VMI
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Responsibility of inventory management on
supplier
Supplier monitors level and replenishes
inventories
No risk of stockouts
Quicker response time
Retailer reduces inventory and administration
costs
Supplier gets more business
No expedited orders
Returned goods to supplier drops
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-7
SCM Evolution
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Electronic linkages facilitate JIT systems
Reduced costs, improved response time,
increased responsiveness to customer
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-8
eBusiness Value Chain
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Evolution of virtual value chain
– Provides information-based channels
– Changed from transaction-based to
contract-based relationships
– Moved from vertically integrated to
selective sourcing
– Core firm outsources all parts of its
business
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-9
eProcurement
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eProcurement
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RFBs on web
Bidding more competitive
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Free-market bidding levels playing field
Increased choices
Reduced transaction costs
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-10
B2B Hubs
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B2B hubs
– Spot sourcing of operating inputs
– Systematic sourcing of inputs
– Bring suppliers of similar or
complementary products together at one
web site
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One-stop shopping
– Automate transactions and reduce costs
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-11
eSupply Chain
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Facilitates real-time updates across chain
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From consumers to suppliers
Greater ability to fill orders
Better understanding of customer needs
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-12
Business Intelligence with ERP
Data
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Data warehouse
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Repository for making management decisions
Data integrity accomplished by cleaning
Consistent formatting applied
Data mart
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Data storage for specific set of users
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Special data analysis
Data mining
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Analysis of data for trends, sales forecasting,
inventory management
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Identifies problem, develops research, collects and
analyzes data
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-13
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-14
Future of ERP
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Increased integration through SCM
ASPs will provide cost efficiency and access
to latest technology
Netsourcing
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Renting ERP services, applications, and
infrastructure over web
Additional risks in migration, contracts
Internal IT capabilities must be maintained
Application software integration of legacy
systems with ERP
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Plug and play
Flexible, modular
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-15
Case: Data Solutions
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Specializes in network implementation
and management
– Provides network services to companies
with no internal networking analyst or IT
manager
– Uses legacy accounting software for
financial accounting and financial
management
– Added billing package for client services
– Wants CRM
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-16
Case: TechKnowledge
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Disitributor of presentation
technologies
Wants to netsource back-office
functions
– Has no internal IT capability
– Wants and ERP vendor via hosting
arrangement
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-17
Featured Article: Leveraging the ERP
Backbone?
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Dow Corning implemented SAP’s Business
Information Warehouse
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Integrate global business processes
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Improve business intelligence
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Consolidate internal and external information
Replaced legacy systems on mainframes
Beta-tested system
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Gain efficiency and reduce costs
Wanted to fully automate
Important to evaluate software with all details decided
Hopes to facilitate rapid scale-up of data
warehouse capabilities
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Vital to business intelligence infrastructure
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-18
Summary
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Supply chain management offers an
integrated planning and control of goods,
services, money, and information between
suppliers and customers
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Produces lower costs and reduced inventories
Improves customer service
Increases profitability
Virtual value chains provide informationbased channels
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Contract-based
Applies selective sourcing instead of vertical
integration
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-19
Summary, continued
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eProcurement employs web-based
RFBs
– More competitive and more choices of
suppliers
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eSupply chains facilitate real-time
updates, responding to customer
needs
Business intelligence is increased by
mining data warehouses and data
marts
© Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Mary Sumner
9-20