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Supply chain management (SCM) is management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.
Supply Chain Management Role of Information Technology in Supply Chain Management INTRODUCTION • Supply chain management (SCM) is concerned with the flow of products and information between supply chain members' organizations. • Recent development in technologies are helpful to coordinates the activities to manage the supply chain. The cost of information is decreased due to the increasing rate of technologies. ELECTRONIC COMMERCE Electronic commerce, commonly known as e- commerce refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks It also includes the entire online process of developing, marketing, selling, delivering, servicing and paying for products and services. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage E-COMMERCE IN SUPPLY CHAIN •Increases the efficiency in operations •Better customer service •Quick process to information. •Better customer service. •Reduced paper work. •Increased productivity •Cost efficiency. •Competitive advantage. Cont: • Information Sharing, Convenience, And Control • Higher Margins • Quick Comparison Shopping • Information Sharing, Convenience, And Control Business Model The plan implemented by a company to generate revenue and make a profit from operations. The model includes the components and functions of the business, as well as the revenues it generates and the expenses it incurs. Business To Business - B To B • What Does Business To Business - B To B Mean? Business conducted between companies, rather than between a company and individual consumers. • Business To Business - B To B An example of a B2B company is a firm that makes parts that are sold directly to an automobile manufacturer. Business To Consumer - B To C • What Does Business To Consumer - B To C Mean? Business conducted between companies and individual consumers, rather than between two companies. • Business To Consumer - B To C A retailer like Wal-Mart is an example of a B to C company Customer To Customer - C To C • What Does Customer To Customer - C To C Mean? A type of business model that facilitates interaction between customers. Customer to customer businesses provide individuals with a place to converse, exchange and interact with other people. • Customer To Customer - C To C Many C2C businesses have online operations. Online auctions and classifieds such as e-bay are examples of very successful customer to customer business models. These sites don't look to directly sell goods to their members, instead the customers are exchanging with other customers. Enterprise resource planning (ERP) Enterprise Resource Planning (ERP) is a system which brings all the decision making information from all the departments in a company into one single place in order to increase efficiency, productivity and profit of the company. FEATURES • Integrates internal and external management information across an entire organization • Facilitates the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside • It involves finance, manufacturing, sales and service, customer relationship management, etc Cont: • It is an integrated system that operates in real time (or next to real time), without relying on periodic updates. • A common database, which supports all applications. E-Procurement E-procurement is the business-to-business purchase and sale of supplies and services over the Internet. This includes management of correspondence, bids, questions and answers, previous pricing, and multiple emails sent to multiple participants. E-Procurement helps to reduce the transactional costs, achieving faster & automated transactions, helps the buyer to focus more on strategic part of procurement. Online Sourcing/ Procurement Process E-Procurement Tools E-Catalogues In normal case of business scenario, supplier visits end users and buyers and provide their product information through Product catalogues. These catalogues normally contain product specifications, rates, validity of rates, discounts, minimum order quantity etc. E-Marketplaces This is the single point entry meeting place for buyers and suppliers. Here buyers post their requirements and suppliers can quote against the requirements posted by the buyers. Features of a e-marketplace can vary from plain transactional trading to enabling suppliers and buyers to collaborate in the areas of supply chain planning, product designing & development, knowledge sharing. E-Reverse Auctions English Reverse Auctions In this type of reverse auction buyer opens the auction with the price of the item and seeks lower bid. Bidders outbid each other by placing lower bids. The auction ends when no body is able to quote lesser than the lowest quote. It is time bound bidding. The buyer may reserve the price above which he is not willing to pay. In case of winner of the bid is not able to supply the full quantity the buyer can go for second lowed bidder to fulfill the quantity. Sometimes buyer may impose the condition of supplying full quantity in the auction. Now a days there is new focus on Request for Proposal (RFP) and Request for information (RFI). So this area now a days called e-Sourcing or RFx Model. Request for Quotation (RFQ) is a request for supplier to quote for a particular product or service. The buyer sets the requirements and specifications in the document. The supplier has to quote in the prescribed format specified by the buyer. Request for Proposal (RFP) is a request by a buyer for supplier for submitting the proposal. RFP asks suppliers to propose how they would meet the buyer’s product or service need. This approach is largely used when the supplier is having greater expertise than buyer. Request for Information (RFI) implies that there is no commitment from either side. Buyer asks for the information from supplier and evaluate whether they might go for particular service or job with a particular supplier. Self Service Procurement: Self service procurement passes on the procurement jobs to end users. Materials procured under self service are normally non strategic, under contract and with fixed pre negotiated prices. Self service procurement frees the buyer from transaction procurement and helps him to focus on strategic procurement. Benefits Improved Process efficiencies Manual procurement is labour intensive and time consuming process. Switching to e-procurement helps companies to reduce employees’ cost, paper and redundancy and cycle times Reduction in errors Manual processes are always prone to errors. In manual processes as and when the information is transferred at many occasions it is re-written or re- typed at various stages Auction pay online is the best way to increasing the value of an item in non natural but against the market trend. Open (little or no restriction) Private (few bidders) Suppliers log onto Can place multiple Goods the website via a bids for the same delivered password product according protected access during an event To bidder screens convenience Benefits of E-Auctions Opportunities to find unique items and collectibles Lower prices Secure bidding environment Bidders can be monitored Time benefits: reduction in postage, paperwork, photocopying Convenience Identities of bidders are usually hidden Limitations of E-Auctions Possibility of fraud Limited participation Security Auction software Long cycle time Monitoring time Equipment for buyers Order fulfillment costs The Largest Global Shopping Portal in the World Started with online books. Started with online user auctions. Started with a search engine. Started with a search engine. ELECTRONIC MARKETS E-marketplaces are emerging to serve each point of every industry's supply chain E-markets are highly collaborative E-Business models that organize complex business processes between multiple participants into a virtual commerce community E-MARKETPLACES : VALUE CREATION efficient transactional processes new business relationships new business models new businesses E-MARKETPLACES: CATEGORIES Horizontal Vertical Private (sell side, buy side) Public BENEFITS TO BUSINESSES Extend the presence and reach of a company Facilitate doing business with anyone, anytime, anywhere Aggregation of content and facilitation of workflow lead to significant reduction in transaction costs Cycle times are reduced and deliveries are quicker Improves relationship with trading partners Market efficiencies Better inventory management Better visibility leading to predictability BENEFITS TO BUYERS Aggregation of multiple suppliers Direct access to suppliers and through dynamic pricing Location and tracking of new suppliers Provides more negotiating power Leads to quick response buyers BENEFITS TO SUPPLIERS Provides reach to vast, untapped global markets True value of products can be realized through aggregation and participation of buyers Enables to support JIT practices Leads to quick response suppliers E-MARKETS: DESIGN ISSUES NEGOTIATIONS Distributed Negotiations Integrative Negotiations Auctions DESIGN OF USER INTERFACES Business objects in SCM The Business Objects Supply Chain Management application provides visibility into performance across the supply chain that can help you measurably improve the effectiveness of your supply chain operations and better deliver on corporate mandates, such as lowering costs and improving return on working capital. Business Objects will give an integrated, dynamic view of our sales, supply chain, and customers. Business Objects benefits We can evaluate, monitor, and improve our supply chain performance and efficiency. Help to gain visibility over constantly changing operations as we continuously plan sourcing, manufacturing, delivery, and returns. It will provide you with hundreds of prebuilt analytics that can answer thousands of key business questions and help to gain deeper business insight. Quickly gain deeper business insight Gain industry best practices Standardize on terminology and data Minimize risk and speed your implementation Importance of business objects The Best Choice on the Market Today The Business Objects suite of enterprise analytic applications is the most comprehensive Product offering on the market today. With insightful analytics, an unparalleled framework Supporting customized development, and an integrated data warehouse, Business Objects Provides your organization with the insight you need to extend your competitive advantage E logistics : Internet Impact to Logistics management WHAT IS E-LOGISTICS? E logistics = information liquidity The ability to acquire and use information when it is needed, what is needed, and in an appropriate context. • Assessable • Meaningful • Timely • Complete E LOGISTICS PLAYERS Players in space-examples Manugistics, Manhattan Associates, EXE technologies(SSA Global), Descartes, SAP etc. Strengths Domain knowledge, proven solution components, customer base, critical mass, existing partnership Weaknesses Old tech infrastructure DRIVERS IN THE LOGISTICS INDUSTRY Global sourcing and distribution Industry segmentation Increasingly IT driven Growing acceptance of outsourcing logistics Market leaders continuously raising the bar: space management, inventory management, JIT, continuous replenishment program(CRP), vendor partnership, VMI etc. E LOGISTICS SERVICES Freight exchange/auction Purchasing portal Automated billing and settlement Lane optimization Documentation Automated booking Service failure notification and resolution Automated tracking and tracing International trade compliance and landed cost Product development collaboration Pricing, revenue and profitability management E marketing E fulfillment Data mining(performance management) E LOGISTICS-VALUE PROPOSITION Logistics exchanges will bring price efficiency to the most segmented market Load matching and other optimization tools will improve asset utilization E logistics will greatly improve the industry’s information liquidity Collaborative product development and revenue management tools will allow business to improve its return on investment Integrated supply chain execution and collaboration tools will dramatically reduce business interaction costs and achieve a learner, quicker and more reliable supply chain BENEFITS OF E LOGISTICS Business benefits - On-time delivery and fulfillment, lead time reduction - Customer service improvements, increased collaboration and coordination - Increased sales IT benefits - Reduces time for data entry, management and integration - Plug and play, easy integration with existing and third- party systems - Transaction processing and monitoring Network effect benefits - Lower transportation cost, improved capacity utilization - Flexible and responsive supply chains(co-mingling, merge-in-transit) - Single point of connection for participants Any Questions …???
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