Supply Chain e-Financing and e-Logistics by umsymums35

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									Supply Chain e-Financing and e-Logistics
APEC Symposium on the Assessment and Benchmark of Paperless Trading
Professor Syming Hwang Department of Business Administration National Chengchi University syming@nccu.edu.tw September 2005

Agenda
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Background
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eBusiness Benchmark Program

 

Supply Chain e-Financing Supply Chain e-Logistics

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Conclusions

eBusiness Benchmark Program
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Goal
 



Scope
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foster e-Business capability of the private sector Sustain competitiveness of the IT industry IT Industry


Project A – International e-Procurement



Benchmark Industry




Project B –
Domestic e-Procurement Project C – Supply Chain e-Financing

Expanded to the banking industry and logistics industry





Program
 

Government funded 1/3 of project expenses Government invest in standard and infrastructure



Project D –
Supply Chain e-Logistics Project E – Engineering Collaboration

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eBusiness Benchmark Program

E-Procurement: Project A & B
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E-Procurement (1999-2001)
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Project A
 

3 Int’l e-Supply Chains with 42 Contract Manufacturers Increase purchasing volume by 15% 15 domestic IT leading manufactures with their upstream 4000 suppliers Reduced order processing time and inventory level Increased order-fill-rate Responsiveness to their downstream customers etc.

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Project B
   



Project A & B honored with 2003 eAsia Award



What’s next….
 

Both focus on the IT industry alone What about e-Logistics and E-Financing?

Supply Chain E-Financing Challenges and Scope
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Challenges
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IT supply chains lack the capability of e-Payment A/R factoring delayed availability of capital for suppliers who have already secured PO from first-tier manufacturers to purchase raw materials Required Letter of Credit, collateral and guarantors to obtain loans





Supply Chain e-Financing (Project C)



Time Frame: 2001-2003
To bring in players in the bank industry to provide e-Cash Flow services, focused on e-Payment, and e-Finance issues, on the foundation of existing Project A and B



8 Banks, 11 first-tier manufacturers and 2700 suppliers participated in the project

3-Multi Models
  

Multiple Financing Products differentiated on transaction types Multiple e-Banking Offerings from different financial institutions Multinational Operation for capital management.

Benchmark




E-Financing Network  Increased to 52 banks, 300 manufacturers and 4500 suppliers  Volume of e-Financing increased from $350 million* in 2003 to $1.75 billion in 2004 Liquidity turnover  Simplify Credit Approval Process


No need for collateral



Fast Financing: IT industry saves 1-2 weeks while non-IT industry saves up to 3 months  Better terms for suppliers Paperless trading  $ 4 million saving in HR  Per Transaction Cost: $43.5 -> $1.5




Honored with 2004 eAsia Award
* all amount in USD

Supply Chain e-Logistics Challenge and Scope


Challenge


Changing OBM pricing strategies and reduced margin requires the firsttier manufacturers to set up overseas operation for agility
 

Take advantage of lower cost
Responsive to local demands



Core competence relies on the ability of single PO hub to dispatch orders to different locations Therefore global logistics is the next killer app in IT supply chain Time Frame: 2001-2003 Scope: Integrate logistics service providers, IT manufacturers, the banking industry into e-logistic hubs





Supply Chain e-Logistics (Project D)
 



Highlight: Inventory and Shipment Visibility

Implementations


Scale


9 IT manufacturers and one logistic integration application service provider (LI-ASP) were selected to build their e-logistics hub, networking with 1000 suppliers and 200 LSPs, as well as 7 international LSPs. E-Shipment E-Clearance E-inventory CPFR…. Standard Adoption and Consortium LI-ASP model



E-Logistics Apps
   



Address many-to-many links problem
 

Benchmark


Project participants


IT Manufacturers


50% reduction of shipment exception cost, increased inventory turnover by 2 folds, and 40% decrease in inventory volume. order fill rate was increased 6% to 20%, and the overall fill rate was above 90% 90% of OTD rate and 70% of paperless trading that saves 26,000 manhours monthly.



OBMs




LSP




Overall Synergy
  

increase the visibility diffusion of e-business capability to members of the supply chains induce new business models for LSPs based on these e-business capabilities.

Lessons learned


For e-business project such as paperless trading, the public sector and the private sector should cooperate
 

The public sector could take initiative and invest in the infrastructure The private sector is encouraged to innovate.



Standards
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Adopt international standards

facilitate standard consortium



Benchmark and Assessment
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KPIs and benchmark as alignment tool and project assessment Government should invest in program governance mechanism

Glossary
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CPFR: Capacity Planning, Forecasting and Replenishment


 

EMS: Electronic Manufacturing Services
LSP: Logistics Service Provider OBM: Original Brand Manufacturer

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 

OEM: Original Equipment Manufacturer
OTD: On Time Delivery PO: Purchase Order


								
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