Chapter 8

Chapter 8Chapter 8

E-Supply Chains,Collaborative Commerce,

and Intrabusiness EC

© Prentice Hall 2004© Prentice Hall 2004 22

Learning ObjectivesLearning Objectives

1.1. Define the e-supply chain and describe Define the e-supply chain and describe its characteristics and components.its characteristics and components.

2.2. List supply chain problems and their List supply chain problems and their causes.causes.

3.3. List solutions to supply chain problems List solutions to supply chain problems provided by EC.provided by EC.

4.4. Define c-commerce and list its major Define c-commerce and list its major types.types.

5.5. Describe collaborative planning and Describe collaborative planning and Collaboration, Planning, Forecasting, and Collaboration, Planning, Forecasting, and Replenishing (CPFR), and list their Replenishing (CPFR), and list their benefits.benefits.


Learning Objectives Learning Objectives (cont.)(cont.)

6.6. Define intrabusiness EC and Define intrabusiness EC and describe its major activities.describe its major activities.

7.7. Discuss integration along the Discuss integration along the supply chain.supply chain.

8.8. Understand corporate portals and Understand corporate portals and their types and roles.their types and roles.

9.9. Describe e-collaboration tools Describe e-collaboration tools such as workflow and groupware.such as workflow and groupware.


How General Motors Is How General Motors Is Collaborating OnlineCollaborating Online

The ProblemThe ProblemInformation regarding a new car design has to be shared among a pool of approximately 20,000 designers and engineers in hundreds of divisions and departments at 14 GM design labs, some of which are located in different countries


How General Motors Is How General Motors Is Collaborating Online Collaborating Online

(cont.)(cont.)Communication and collaboration with the design engineers of the more than 1,000 key suppliers could mean 4 years to completion of a model



(cont.)(cont.)The SolutionThe Solution

GM began by examining over 7,000 GM began by examining over 7,000 existing legacy IT systems, reducing existing legacy IT systems, reducing that number to about 3,000 and that number to about 3,000 and making them Web enabled making them Web enabled A computer-aided design (CAD) A computer-aided design (CAD) program that allows 3D design program that allows 3D design documents to be documents to be shared online shared online by by both the designers (internal and both the designers (internal and external) and engineers external) and engineers



(cont.)(cont.)Collaborative and Web conferencing Collaborative and Web conferencing software tools have radically changed software tools have radically changed the vehicle review processthe vehicle review processGM electronically sends its GM electronically sends its specifications for the seat to the specifications for the seat to the vendor’s product data system vendor’s product data system allowing:allowing:

SearchingSearchingDesigningDesigningToolingToolingTesting in real timeTesting in real time

This expedites the process and cuts This expedites the process and cuts costs by more than 10%costs by more than 10%



(cont.)(cont.)The ResultsThe Results

It now takes less than 18 months to It now takes less than 18 months to bring a new car to market bring a new car to market The change has produced enormous The change has produced enormous savings savings Shorter cycle time enables GM to Shorter cycle time enables GM to bring out more new car models bring out more new car models more quickly, providing the more quickly, providing the company with a competitive edge company with a competitive edge



(cont.)(cont.)What we can learn…What we can learn…

Applications of EC that help reduce costs and increase profits

collaborative commerceimprovements along the supply chainB2E


E-Supply ChainsE-Supply Chains

The success of organizations depends on their ability to manage the flow of materials, information, and money into, within, and out of the organizationSupply chain involves activities that take place during the entire product life cycle including the movement of information, money and individuals involved in the movement of a product or a service


E-Supply Chains E-Supply Chains (cont.)(cont.)

Supply chain: The flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers

E-supply chain:E-supply chain: A supply chain A supply chain that is managed electronically, that is managed electronically, usually with Web technologiesusually with Web technologies





Supply chain partsSupply chain partsUpstream supply chain

activities of a manufacturing company with its suppliers

Internal supply chainin-house processes for transforming the inputs from the suppliers into the outputs

Downstream supply chainactivities involved in delivering the products to the final customers



Managing supply chainsManaging supply chainsE-supply chain management (e-E-supply chain management (e-SCM): SCM): The collaborative use of The collaborative use of technology to improve the technology to improve the operations of supply chain activities operations of supply chain activities as well as the management of as well as the management of supply chainssupply chains



The success of an e-supply chain depends on:

The ability of all supply chain partners to view partner collaboration as a strategic assetInformation visibility along the entire supply chainSpeed, cost, quality, and customer serviceIntegrating the supply chain segments more tightly



E-supply chain consists of six processes:1. Supply chain replenishment2. E-procurement3. Collaborative planning4. Collaborative design and product

development5. E-logistics6. Use of B2B exchanges and supply

webs



Major infrastructure elements and tools of e-supply chains are:

ExtranetsIntranetsCorporate portalsWorkflow systems and toolsGroupware and other collaborative toolsEDI and EDI/Internet


Supply Chain Problems Supply Chain Problems and Solutionsand Solutions

Typical problems along the supply Typical problems along the supply chainchain

Slow and prone to errors because of Slow and prone to errors because of the length of the chain involving the length of the chain involving many internal and external partnersmany internal and external partnersLarge inventories without the ability Large inventories without the ability to meet demandto meet demandInsufficient logistics infrastructureInsufficient logistics infrastructurePoor quality Poor quality


Supply Chain Problems Supply Chain Problems (cont.)(cont.)

Bullwhip effect:Bullwhip effect: Erratic shifts in Erratic shifts in orders up and down supply chainsorders up and down supply chains

Creates Creates production and inventory problemsStockpiling can lead to large inventories

Effect is handled by information sharing—collaborative commerce



Need for information sharing Need for information sharing along the supply chain including along the supply chain including issues on:issues on:

product pricinginventoryshipping statuscredit and financial informationtechnology news



Information systems are the links that enable communication and collaboration along the supply chainInformation and information technology are one of the keys to the success, and even the survival in today’s economy



Major solutions provided by an EC approach and technologies

Order takingOrder fulfillmentElectronic paymentsInventories can be minimizedCollaborative commerce


Collaborative CommerceCollaborative Commerce

Collaborative commerce Collaborative commerce

(c-commerce):(c-commerce): The use of digital The use of digital technologies that enable technologies that enable companies to collaboratively plan, companies to collaboratively plan, design, develop, manage, and design, develop, manage, and research products, services, and research products, services, and innovative EC applicationsinnovative EC applications


Collaborative CommerceCollaborative Commerce (cont.)(cont.)

Major benefits are: cost reduction, increased revenue, better customer retentionAs a result of:

fewer stock outsless exception processingreduced inventory throughout the supply chainlower materials costsincreased sales volumeincreased competitive advantage



Collaboration can be done both between and within organizations. Collaborative platform can help in communication and collaboration between

headquarters and subsidiariesfranchisers and franchisees

The platform provides around the globee-mailmessage boards and chat roomsonline corporate data access






Collaborative Commerce Collaborative Commerce ((cont.)cont.)

Information sharing between retailers and suppliers: P&G and Wal-Mart

Wal-Mart provides P&G access to sales information on every item P&G makes for Wal-MartAccomplished done electronically

P&G has accurate demand informationWal-Mart has adequate inventory


Collaborative CommerceCollaborative Commerce Example: Target Example: Target

Retailer–supplier collaboration: Target Corporation

Conducts EC activities with 20,000 trading partnersExtranet enables Target to reach many more partners, and to use applications not available on the traditional EDIBusiness customers create personalized Web pages


Collaborative CommerceCollaborative Commerce Example: Target Example: Target (cont.)(cont.)


Collaborative CommerceCollaborative CommerceExample: AdaptecExample: Adaptec

Reduction of design cycle time: Adaptec, Inc.

Adaptec outsources manufacturing tasks, concentrating on product research and developmentAn extranet-based collaboration and enterprise-level supply chain integration software incorporates automated workflow and EC toolsA reduction in its order-to-product-delivery time from 15 weeks to between 10 and 12 weeks


Collaborative CommerceCollaborative Commerce Example: CaterpillarExample: Caterpillar

Reduction of product development time: Caterpillar, Inc.

Cycle time along the supply chain was long because the process involved the transfer of paper documents among managers, salespeople, and technical staffImplemented an extranet-based global collaboration system


Collaborative CommerceCollaborative Commerce Example: Caterpillar Example: Caterpillar (cont.)(cont.)

Remote collaboration capabilities between the customer and product developers have decreased cycle time delays caused by rework time

Suppliers are connected to the system so that they can deliver materials or parts directly to Caterpillar’s shops or directly to the customer if appropriate

The system also is used for expediting maintenance and repairs



Collaborative commerce and Collaborative commerce and knowledge managementknowledge management

Knowledge management : the process of capturing or creating knowledgeGathering and making available experts’ opinions, as well as providing them to partnersLearning is also facilitated by KM



Barriers to c-commerce—Barriers to c-commerce—lack of defined and universally agreed-on standards

technical reasons involving integration, standards, and networkssecurity and privacy concerns over who has access to and control of information stored in a partner’s databaseinternal resistance to information sharing and to new approacheslack of internal skills to conduct collaborative commerce


Collaborative Planning Collaborative Planning and CPFRand CPFR

In collaborative planning, business partners—all have real-time access to point-of-sale order information

manufacturerssuppliers distribution partnersother partners


Collaborative Planning Collaborative Planning and CPFR and CPFR (cont.)(cont.)

Collaborative planning, Collaborative planning, forecasting, and replenishment forecasting, and replenishment (CPFR):(CPFR): Project in which suppliers Project in which suppliers and retailers collaborate in their and retailers collaborate in their planning and demand forecasting planning and demand forecasting to optimize flow of materials to optimize flow of materials along the supply chainalong the supply chain



CPFR provides a standard framework for collaborative planning

Improve demand forecasting for all of the partners in the supply chain and then communicate forecasts using information-sharing applicationsSuppliers and retailers also coordinate the related logistics activities






Collaborative Planning: Collaborative Planning: APSAPS

Advanced planning and scheduling Advanced planning and scheduling (APS) systems:(APS) systems: Programs that use Programs that use algorithms to identify optimal algorithms to identify optimal solutions to complex planning solutions to complex planning problems that are bound by problems that are bound by constraintsconstraints


Collaborative Planning: Collaborative Planning: PLMPLM

Product lifecycle management Product lifecycle management (PLM):(PLM): Business strategy that Business strategy that enables manufacturers to control enables manufacturers to control and share product-related data as and share product-related data as part of product design and part of product design and development effortsdevelopment efforts


Collaborative Planning Collaborative Planning and Fulfillmentand Fulfillment


Internal Supply Solutions, Internal Supply Solutions, Intrabusiness, and B2EIntrabusiness, and B2E

Intrabusiness EC:Intrabusiness EC: E-commerce E-commerce activities conducted activities conducted within within an an organization organization

Business-to-employee (B2E):Business-to-employee (B2E): Intrabusiness EC in which an Intrabusiness EC in which an organization delivers products or organization delivers products or services to its employeesservices to its employees


Internal Supply Solutions, Internal Supply Solutions, Intrabusiness, and B2E Intrabusiness, and B2E

(cont.)(cont.)Representative applications of B2E include:

1. Providing field representatives with electronic communication tools

2. Training and education provided over intranets

3. Employee use of electronic catalogs and ordering forms



(cont.)(cont.)4. Electronic tools for communication,

collaboration, and information discovery

5. Offering corporate stores on the intranet that sell the companies’ products to employees, usually at a discount

6. Systems that disseminate information or allow employees to manage their fringe benefits via the intranet



(cont.)(cont.)Activities between business units

Large corporations consist of independent units, called strategic business units (SBUs)—transactions can be easily automated and performed over the organization’s intranetSpecial network may be constructed to support communication, collaboration, and execution of transactions



(cont.)(cont.)Activities among corporate Activities among corporate employeesemployees

A system by which employees can collaborate on an individual (sometimes nonbusiness) levelVia classified ads, corporate equipment may be sold to employees for private use


Integration along the Supply Integration along the Supply Chain Example: Toshiba USAChain Example: Toshiba USA

Toshiba created a Web-based order Toshiba created a Web-based order entry system for product parts using entry system for product parts using an extranet and intranets an extranet and intranets

Dealers can place orders for parts Dealers can place orders for parts until 5:00 P.M. for next-day delivery until 5:00 P.M. for next-day delivery without extra charge without extra charge Dealers can check accounts Dealers can check accounts receivable balances and pricing receivable balances and pricing arrangements and read service arrangements and read service bulletins, press releases, and so on bulletins, press releases, and so on Sales reps can interact more Sales reps can interact more effectively with dealerseffectively with dealers


Integration along the Supply Integration along the Supply Chain Example: Toshiba USA Chain Example: Toshiba USA

(cont.)(cont.)


Integration along Integration along the Supply Chain (cont.)the Supply Chain (cont.)

Enabling integration and the role of standards and Web services

Integration involves connectivity, compatibility, security, and scalabilityApplications, Applications, data, processes, and interfaces must be integratedMiddleware, standards and protocols have been developed to facilitate integration


Corporate (Enterprise) Corporate (Enterprise) PortalsPortals

Corporate (enterprise) portal:Corporate (enterprise) portal: A A gateway for entering a corporate Web gateway for entering a corporate Web site, enabling communication, site, enabling communication, collaboration, and access to company collaboration, and access to company informationinformationCorporate portals offer employees, business partners, and customers an organized focal point for their interactions with the firm


Corporate (Enterprise) Portals Corporate (Enterprise) Portals (cont.)(cont.)

Types of corporate portalsTypes of corporate portalsGeneric portalsGeneric portals

portal for suppliersportal for customersportal for employeessupervisor portalsmobile portals—accessible via mobile devices, especially cell phones and PDAs



Functional portalsFunctional portalsInformation portals:Information portals: Portals that Portals that store data and enable users to store data and enable users to navigate and query these datanavigate and query these data

Collaborative portals:Collaborative portals: Portals that Portals that allow collaboration allow collaboration



Corporate portal Corporate portal applicationsapplications

knowledge bases and learning toolsbusiness process supportcustomer-facing (front-line) sales, marketing, and servicescollaboration and project supportaccess to data from disparate corporate systems

personalized pages for various userseffective search and indexing toolssecurity applicationsbest practices and lessons learneddirectories and bulletin boardsidentification of expertsnewsInternet access





Justifying portalsJustifying portalsOffer a simple user interface for finding and navigating content via a browserImprove access to business content and increase the number of business users who can access information, applications, and peopleOffer the opportunity to use platform-independent software


Collaboration-Enabling Collaboration-Enabling Tools:Tools:

WorkflowWorkflowWorkflow:Workflow: The movement of The movement of information as it flows through the information as it flows through the sequence of steps that make up an sequence of steps that make up an organization’s work proceduresorganization’s work procedures

Workflow systems:Workflow systems: Business process Business process automation tools that place system automation tools that place system controls in the hands of user controls in the hands of user departments to automate information departments to automate information processing tasksprocessing tasks


Collaboration-Enabling Tools:Collaboration-Enabling Tools:Workflow Workflow (cont.)(cont.)

Workflow management:Workflow management: The The automation of workflows, so that automation of workflows, so that documents, information, and documents, information, and tasks are passed from one tasks are passed from one participant to the next in the participant to the next in the steps of an organization’s steps of an organization’s business processbusiness process



Three major categories of workflow applications:

Collaborative workflowproject-oriented and collaborative types of processes

Production workflowmission-critical, transaction-oriented, high-volume processes

Administrative workflowcross between collaborative and production



Benefits of workflow management systems

Improved control of business processesImproved quality of servicesLower staff training costsImproved user satisfaction


Collaboration-Enabling Tools:Collaboration-Enabling Tools:GroupwareGroupware

Groupware:Groupware: Software products Software products that support collaboration, over that support collaboration, over networks, among groups of networks, among groups of people who share a common task people who share a common task or goal or goal

Provide Provide a way for groups to share resources and opinions


Collaboration-Enabling Tools: Collaboration-Enabling Tools: Group Decision Support Group Decision Support

Systems Systems (GDSS)(GDSS)Virtual meetings:Virtual meetings: Online meetings Online meetings whose members are in different whose members are in different locations, frequently in different locations, frequently in different countries countries

Group decision support system (GDSSGroup decision support system (GDSS)): : An interactive computer-based system An interactive computer-based system that facilitates the solution of that facilitates the solution of semistructured and unstructured semistructured and unstructured problems by a group of decision makersproblems by a group of decision makers


Collaboration-Enabling Tools: Collaboration-Enabling Tools: GDSS GDSS (cont.)(cont.)

Major characteristics of a GDSSIts goal is to support the process of group decision makers by providing automation of subprocesses using information technology toolsIt is a specially designed information systemIt encourages generation of ideas, resolution of conflicts, and freedom of expression


Collaboration-Enabling Tools: Collaboration-Enabling Tools: GDSS GDSS (cont.)(cont.)

GDSSs improve the decision-making process by:

providing structure to the planning processsupport parallel processing of information and idea generationmake larger meetings possible


Collaboration-Enabling Tools:Collaboration-Enabling Tools:TeleconferencingTeleconferencing

Teleconferencing:Teleconferencing: The use of electronic The use of electronic communication that allows two or more communication that allows two or more people at different locations to have a people at different locations to have a simultaneous conferencesimultaneous conference

Video teleconference:Video teleconference: Virtual meeting in Virtual meeting in which participants in one location can which participants in one location can see participants at other locations on a see participants at other locations on a large screen or a desktop computerlarge screen or a desktop computer


Collaboration-Enabling Tools:Collaboration-Enabling Tools:Teleconferencing Teleconferencing (cont.)(cont.)

Data conferencing:Data conferencing: Virtual meeting in Virtual meeting in which geographically dispersed groups which geographically dispersed groups work on documents together and to work on documents together and to exchange computer files during exchange computer files during videoconferencesvideoconferencesWeb conferencing is conducted on the Internet

few as two and as many as thousands of peopleallows users to simultaneously view something interaction takes place via messaging or a simultaneous phone teleconferenceis much cheaper than videoconferencing because it runs on the Internet


Collaboration-Enabling Tools Collaboration-Enabling Tools (cont.)(cont.)

Real-time collaboration (RTC) tools help companies bridge time and space to make decisions and collaborate on projects by supporting synchronous communication of graphical and text-based information



Interactive white boardsInteractive white boardsAnother type of groupware where all participants join in the useUsers can view and draw on a single document “pasted” onto the electronic whiteboard on a computer screenUsers can save digital whiteboarding sessions for future use



Screen sharing:Screen sharing: Software that Software that enables group members, even in enables group members, even in different locations, to work on the different locations, to work on the same document, which is shown same document, which is shown on the PC screen of each on the PC screen of each participantparticipant





Instant video—a Instant video—a video chat room that allows users to chat in real time, seeing the person they are communicating withIntegration and groupware suites

Lotus Notes/DominoMicrosoft NetMeetingNovell GroupWise



Virtual reality (VR):Virtual reality (VR): System that System that delivers interactive computer delivers interactive computer generated 3D graphics to a user generated 3D graphics to a user through a head-mounted display through a head-mounted display



Implementation issuesImplementation issuesAn effective collaborative environment is necessaryConnecting collaborative tools with file management products on an organization’s intranet is necessaryProtocols to change the read-only Web to a truly collaborative environment


Managerial IssuesManagerial Issues

1. How difficult is it to introduce e-collaboration?

2. How much can be shared with business partners? Can they be trusted?

3. Who is in charge of our portal and intranet content?

4. Who will design the corporate portal?5. Should we conduct virtual meetings?


SummarySummary

1. The e-supply chain, its characteristics, and components: Digitized and automated flow of information throughout the supply chain and managing it via the Web

2. Supply chain problems and their causes: access to inventories, lack of supplies when needed, need for rush orders, deliveries of wrong materials or to wrong locations, and poor customer service.


Summary Summary (cont.)(cont.)

3. Solutions to supply chains problem provided by EC: automate/expedite order taking, speed order fulfillment, provide e-payments, control inventories, provide for correct forecasting and scheduling, and improve collaboration among partners

4. C-commerce: Definitions and types: planned use of digital technology by business partners.



5. Collaborative planning: concentrates on demand forecasting and on resource and activity planning along the supply chain. CPFR: business strategy that develops standard protocols and procedures for collaboration.

6. Intrabusiness: all EC initiatives conducted within an organization.



7. Integration along the supply chain: critical to the success of companies.

8. Types and roles of corporate portals: for suppliers, customers, employees, and supervisors.

9. Collaborative tools: workflow, groupware, GDSS, devices that facilitate product design

Documents

Chapter 8