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Slide 6.1
Chapter 6
Supply chain management
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.2
Learning outcomes
• Identify the main elements of supply chain
management and their relationship to the
value chain and value networks
• Assess the potential of information systems to
support supply chain management and the
value chain.
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.3
Management issues
• Which technologies should we deploy for
supply chain management and how should
they be prioritized?
• Which elements of the supply chain should be
managed within and beyond the organization
and how can technology be used to facilitate
this?
• What are the practical issues with online
supply chain management?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.4
SCM – some definitions
• Supply chain management (SCM) The
coordination of all supply activities of an
organization from its suppliers and partners to
its customers
• Upstream supply chain Transactions
between an organization and its suppliers and
intermediaries, equivalent to buy-side ecommerce
• Downstream supply chain Transactions
between an organization and its customers
and intermediaries, equivalent to sell-side ecommerce
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.5
SCM – some definitions
• What’s Supply Chain Management?
– The design, planning, execution, control, and
monitoring of supply chain activities with the
objective of creating net value, building a
competitive infrastructure, leveraging
worldwide logistics, synchronizing supply with
demand, and measuring performance globally.
-APICS Dictionary, http://en.wikipedia.org/wiki/Supply_chain_management
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.6
(a) Benefits of supply chain management, (b) realization of benefits.
Note respondents could select all benefits that apply
Figure 6.1
Source: PMP (2008)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.7
(a) Benefits of supply chain management, (b) realization of benefits.
Note respondents could select all benefits that apply (Continued)
Figure 6.1
Source: PMP (2008)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.8
Members of the supply chain: (a) simplified view, (b) including
intermediaries
Figure 6.2
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.9
SCM Mini Case Study
Read the Mini Case Study 6.1 on pp. 331-332
and discuss these questions:
1. How did Premier Farnell manage its supply
chain?
2. What can e-business/e-commerce do with
SCM?
3. What a role did IT played in Premier Farnell’s
SCM?
4. What can we learn from this case study?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.10
Table 6.2
Objectives and strategies for effective consumer response (ECR)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.11
Figure 6.3
Inter-organizational process flow for introduction of a new product
Source: excerpted from Toward the interorganisational product information supply chain – evidence from the retail and consumer goods industry by C. Legner and J. Schemm © 2008.
Used with permission from Association for Information Systems, Atlanta, GA, 404-713-7444, www.aisnet.org. All rights reserved. http://www.allbusiness.com/technology/computernetworks-electronic-data-interchange/10593039-1.html
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.12
BluescopeSteelConnect transactional site
(www.bluescopesteelconnect.com)
Figure 6.4
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.13
SCM Trends
Read the Box 6.3 on p. 339 to discuss these
questions:
1. What are the two fundamental principles
presented by Braithwaite?
2. What are the three key points observed by
Braithwaite?
3. What would be the future of SCM?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.14
Figure 6.5
A typical supply chain for a B2B company
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.15
SCM Case Study
Read the Case Study 6.1on pp. 341-345 and
answer questions on p.345.
1.What is the key features of SIMON?
2.What improvement did Elemica produced
over SIMON?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.16
Figure 6.6
Elemica trading platform (www.elemica.com)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.17
Push and Pull SCM
Push SCM—emphasis distribution product to
passive customers
Pull SCM—emphasis delivery of values to
customers who actively involved in product and
service specification
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.18
Figure 6.7
Push and pull approaches to supply chain management
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.19
Figure 6.7
Push and pull approaches to supply chain management (Continued)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.20
Value Chain
• A model that considers how supply chain
activities can add value to products and
services delivered to the customer.
• A tradition value chain model was
proposed by Porter in 1980
• A new value chain model was proposed by
Deise et all in 2000
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.21
Two alternative models of the value chain: (a) traditional value chain
model, (b) revised value chain model
Figure 6.8
Source: Figure 6.4(b) adapted from Deise et al. (2000)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.22
Value Chain Analysis
• A framework that decomposes an
organization into its individual activities and
determines value added at each stage.
• Activities can be divided into 3 categories
– Create value as perceived by customers
– Create no value but required by product
development/production
– Those that don’t add value at all.
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.23
Value Chain Networks
• Also called external value chain—The link
between an organization and its strategic
and non-strategic partners that form its
external value chain.
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.24
Members of the value network of an organization (adapted from Deise
et al. 2000)
Figure 6.9
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.25
Restructuring Supply Chain
• A SCM can be viewed from control
perspective-internal and external.
• Vertical integration—supply chain activities
are undertaken and controlled by the
organization
• Virtual integration—majority of supply chain
activities are undertaken and controlled by
third party
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.26
The characteristics of vertical integration, vertical disintegration and
virtual integration
Figure 6.10
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.27
Use e-Business to Restructuring
Supply Chain
• E-business can help provide the right
information to the right entity at the right
time in a secure manner.
• Adoption rate of e-business—not high
particular not in SMEs
• REID (Radio Frequency Identification
Microchip) and SCM
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.28
Figure 6.11
E2open (www.e2open.com)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.29
Popularity of different e-business applications in Europe according to
company size
Figure 6.12
Source: European Commission (2008)
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.30
Case Study
• Read the case study on pp. 363-364 and
discuss the question on p. 364
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.31
Figure 6.13
A typical IS infrastructure for supply chain management
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.32
SCM Implementation
• Data standardization and exchange
• Read the Box 6.5.
– What is GDSN?
– What are the steps for partners to exchage
information?
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.33
SCM Strategy Process
• SOSTAC approach—ref.p.371, Table 6.3
• Managing Partnerships
– It’s advised that a company should
• Focus on core competencies
• Reduce their number of suppliers
• Develop strong partnership relationships
– Strategic options for partnerships
• Ref. p. 373, table 6.4
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.34
Figure 6.14
Alternative strategies for modification of the e-business supply chain
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009
Slide 6.35
Case Study
• Read the Case Study on pp. 374-375
• Use a industry of your choice to evaluate
the benefits and risks of applying REID in
the sector
Dave Chaffey, E-Business and E-Commerce Management, 4th Edition, © Marketing Insights Limited 2009