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  • 1. Supply Chain Management - Information Systems Completed for Prof. Steve DeLurgio’s Supply Chain Management Class Purpose: The purpose of this document is to provide a glossary of common terms which describe how Information Technology is being used strategically to improve competitive positions through the Supply Chain. By Susan Conroy Juneane Cooper Tiffany Flackes James Klanke Todd Scheerer Anil Tata 1
  • 2. Artificial Intelligence Definition and “Artificial intelligence (AI) is a branch of computer science and engineering that description deals with intelligent behavior, learning, and adaptation in machines. Research in AI is concerned with producing machines to automate tasks requiring intelligent behavior. Examples include control, planning and scheduling, the ability to answer diagnostic and consumer questions, handwriting, speech, and facial recognition. As such, it has become an engineering discipline, focused on providing solutions to real life problems, software applications, traditional strategy games like computer chess and other video games. (1) A common application of Artificial Intelligence is Computational Intelligence which has applications in Supply Chain Management and deserves explanation: Computational Intelligence involves iterative development or learning (e.g. parameter tuning e.g. in connectionist systems). Learning is based on empirical data and is associated with non-symbolic AI, scruffy AI and soft computing. Methods mainly include: • Neural networks: systems with very strong pattern recognition capabilities. • Fuzzy systems: techniques for reasoning under uncertainty, have been widely used in modern industrial and consumer product control systems. • Evolutionary computation: applies biologically inspired concepts such as populations, mutation and survival of the fittest to generate increasingly better solutions to the problem. These methods most notably divide into evolutionary algorithms (e.g. genetic algorithms) and swarm intelligence (e.g. ant algorithms). “ (2) How it is used "One of the areas where AI ( specifically, neural networks ) provides tremendous benefit to the supply chain is in forecasting. Briefly, it replaces the need to manually build complex formulas. It can also be used to complete complex logistical challenges such as truck routing. " -- [HCLIV] (3) In addition, many artificial intelligence applications exist in supply chain management in the following technological areas: • “Shared Plan and Activity Representation • Intelligent Process Management • Knowledge-Based Planning • Adaptive Systems Approaches to Planning • Constraint Management Technology • Knowledge-Based Workflow • Intelligent Agent Technology • Intelligent Activity and Process State Visualization • Modular, Distributed Systems Integration Architectures” (4) 2
  • 3. Many of these technological areas make the process of prediction and automation simple and effective in terms of the supply chain as a system. What its Artificial Intelligence is playing a larger and larger role in supply chain significance management. Many of the technology applications identified above have provided or impact has effective solutions for small and large businesses. A prime example is an excerpt been on SCM from AI Bynes Column: performance, Global Competition, “For the past decade, Wal-Mart has famously invited its major suppliers to jointly and/or the develop powerful supply chain partnerships. These are designed to increase product effectiveness flow efficiency and, consequently, Wal-Mart's profitability. of organizations Many companies have stepped up to the challenge, starting with the well-known Wal-Mart/Procter & Gamble alliance, which incorporated vendor-managed inventory, category management, and other intercompany innovations. P&G even fielded a dedicated account team in Bentonville, AR. In a very creative approach, the team members represented key P&G functions: sales/marketing, distribution/supply chain management, IT, and finance. In the eyes of one P&G vice president who was centrally involved at the time, Wal-Mart's CFO became a key customer as P&G's objective became maximizing Wal-Mart's internal profitability.” (5) In which The use of artificial intelligence has been especially popular for the retail industry industries is with the largest retailer, Wal-Mart applying several instances to forecast sales, this shipments, warehouse distribution, vendor needs, and customer preferences. Other improvement areas where artificial intelligence in supply chain management is popular include a popular or manufacturing, food service, and transportation logistics (including rail, truck, air, effective tool and ship) or technology Bibliography 1) http://en.wikipedia.org/wiki/Artificial_intelligence 2) http://en.wikipedia.org/wiki/Artificial_intelligence 3) http://logistics.about.com/od/logisticstopics/a/ailogistics.htm 4) http://logistics.about.com/gi/dynamic/offsite.htm? zi=1/XJ&sdn=logistics&zu=http%3A%2F%2Fwww.aiai.ed.ac.uk%2Fproject %2Fplan%2F 5) http://hbswk.hbs.edu/archive/3616.html (AI Byrnes Column - Supply Chain Management in a Wal-Mart World 8/4/2003 3
  • 4. Business Data Messaging Definition and Business data messaging is efficient data exchange between businesses, both internal description and external. Secure and consistent data transmission requires use of data messaging communication standards or tools that can communicate across multiple standards. How it is used The RosettaNet is one data messaging standard and is described on its website as “facilitating speed, efficiency and reliability, enabling greater collaboration and improved communication between trading partners. By streamlining the exchange of business information, companies reduce costs while also realizing gains associated with inventory reduction, order processing time, product cycle time-to-market and customer satisfaction. Universally accepted and proven through successful implementations, RosettaNet standards provide a common language for transactions and the foundation for integrating critical processes among partners within the global trading network.” IBM’s Websphere is one software tool that can communicate across multiple protocol standards. On their website, Websphere offers the following benefits: “ WebSphere® Message Broker delivers an advanced Enterprise Service Bus providing connectivity and universal data transformation for both standard and non-standards-based applications and services to power your service- oriented architecture. WebSphere Message Broker transforms and enriches in-flight information to provide a level of intermediation between applications that use different message structures and formats. WebSphere Message Broker enriches and distributes real-time information from disparate sources of information through a network of access points, and provides a powerful new means to unify organizations. WebSphere Message Broker integrates with multiple sources of data such as databases, applications, and files to perform any type of data manipulation, including logging, updating, and merging. WebSphere Message Broker simplifies the integration of existing applications with Web services by transforming and routing SOAP messages, as well as logging of Web services transactions. WebSphere Message Broker includes the functionality of WebSphere Event Broker. WebSphere Event Broker is available as a separately orderable product for customers requiring publish and subscribe capabilities and other distribution capabilities using multiple protocols without the powerful and adaptable transformation features provided by WebSphere Message Broker. WebSphere Message Broker with Rules and Formatter Extension extends the capabilities of the Message Broker to offer continuity and compatibility for existing WebSphere MQ Integrator, V2.1, customers who require IBM Rules and Formatter nodes. WebSphere Message Broker supports a number of different transport options to extend the reach of your enterprise to include mobile, telemetry, and pervasive options. Customers using WebSphere Message broker may benefit from the range of complementary products that can work with it within the business.” What its 4
  • 5. significance Laurie Sullivan described the impact of business data messaging improvements at or impact has GM in Information Week, “Few companies have pursued machine-to-machine been on SCM communication harder than General Motors Corp. The automaker is rolling out an performance, ambitious program to migrate its more than 7,000 suppliers to Covisint Connect, a Global data-messaging service based on electronic business XML and business-object Competition, document standards. The rollout follows GM's decision earlier this year to test the and/or the ebXML spec in 14 areas, ranging from parts procurement to engineering. GM will effectiveness support ebXML through Covisint Connect in an effort to replace traditional of electronic data interchange transmissions to communicate advanced ship notices, organizations forecasts, and inventory levels with its suppliers. The service is being offered through Covisint LLC, an independent E-business service provider for the automotive industry.. The move is expected to remove cost, reduce complex transactions, and promote interoperability in the automotive supply chain. The messaging platform acts like middleware to give multiple partners the ability to use the Internet or disparate software to connect through the Covisint hub. "This is the lifeline of our procurement organization," says Bob Booth, process information officer for worldwide purchasing from order to delivery at GM. "We use EDI to send forecasts, ship notifications, and verify inventory levels. When we migrate to ebXML, clearly there is an opportunity to send other messaging over this network-- like purchase orders, invoices, and financial information reporting to streamline our worldwide purchasing."” In which Industries such as automotive where continuous data exchange is required to industries is maximize the responsiveness of a complex supply chain with many companies. this improvement a popular or effective tool or technology http://www-306.ibm.com/software/integration/wbimessagebroker/ http://www.informationweek.com/story/showArticle.jhtml?articleID=18902702 Bibliography http://www.rosettanet.org/rosettanet/Rooms/DisplayPages/LayoutInitial 5
  • 6. Business To Business Definition and “Business-to-business electronic commerce (B2B) typically takes the form of description automated processes between trading partners and is performed in much higher volumes than business-to-consumer (B2C) applications. For example, a company that makes chicken feed would sell it to a chicken farm, another company, rather than directly to consumers. An example of a B2C transaction would be a consumer buying grain-fed chickens at a grocery store. B2B can also encompass marketing activities between businesses, and not just the final transactions that result from marketing. B2B also is used to identify sales transactions between businesses. For example a company selling photocopiers would likely be a B2B sales organization as opposed to a B2C (business to consumer) sales organization.” 1 http://en.wikipedia.org/wiki/B2b “Business to Business is all about product and materials procurement, and the basic inescapable fact is that the supply chain is the vehicle/conduit through which B2B and actually all commerce is ultimately consummated.” 2 http://logistics.about.com/library/weekly/aa102300.htm. Additionally, this link contains other links to the Logistics and Supply Chain Management site and explores the relationship between supply chain management and B2B E-Commerce. How it is used “Improved Supply Chain Visibility: By achieving B2B integration throughout the supply chain, companies are able to improve visibility, manage key business processes and optimize business activity for gains in operational efficiency and productivity.” Associated Press Financial Wire, October 3, 2006 “Electronic commerce has emerged as a significant and rapidly growing component of U.S. economic exchange. Jupiter Communications forecasts that business-to- business (B2B) e-commerce will reach 6.3 trillion USD or nearly 42 percent of all B2B commerce by 2005 (Dembeck, 2000). The opportunities to reduce procurement costs through B2B e-commerce have motivated firms in many industries to band together to create electronic supply networks (Ansberry, 2000). While it will not be known for years who the winners and losers will be in this economic transformation, it is widely expected that B2B e-commerce will significantly alter the competitive landscape of many industries (Benjamin and Wigand, 1995).” 3 http://www.firstmonday.org/issues/issue7_11/standifird/index.html What its “Most companies are woefully inadequate in their automation and staff support for significance global trade. To keep up with global trade growth and increased competitive or impact has pressures, corporations are finding they must make significant changes in how they been on SCM run and technology-enable their global supply chain operations.” 4 performance, http://www.aberdeen.com/summary/report/benchmark/RA_GlobalTrade_BE_3172.a Global sp Competition, and/or the This link opens a PowerPoint that analyses the economic impact of B2B e- effectiveness commerce. It addresses the value of integrating B2B e-commerce into an of organization. 5 www.is-frankfurt.de/uploads/down110.ppt organizations 6
  • 7. And finally, the following is an excellent link describing B2B and the “direct effect on the structure of downstream industry activities”. 6 http://www.firstmonday.org/issues/issue7_11/standifird/index.html Click on this link to read how B2B is shaping our new economy. 7 http://supplychain.ittoolbox.com/pub/AW100901.pdf In which “Although most of the predicted consequences of the internet-revolution in the 90s industries is did not become reality, the internet has lead to sustainable changes in the this organization of most industries. In particular, this is true for business-to-business improvement (B2B) relations between firms. An obvious 'proof' for this is the rising number of so- a popular or called electronic markets - especially for B2B transactions - since several years.” 8 effective tool http://papers.ssrn.com/sol3/papers.cfm?abstract_id=540782 or technology This link describes the impact B2B has made on the auto industry. 9 http://www.touchbriefings.com/pdf/977/transport2.pdf Bibliography 1 http://en.wikipedia.org/wiki/B2b 2 http://www.firstmonday.org/issues/issue7_11/standifird/index.html 3 http://logistics.about.com/library/weekly/aa102300.htm 4 http://www.aberdeen.com/summary/report/benchmark/RA_GlobalTrade_BE_3172.a sp 5 www.is-frankfurt.de/uploads/down110.ppt 6 http://www.firstmonday.org/issues/issue7_11/standifird/index.html 7 http://supplychain.ittoolbox.com/pub/AW100901.pdf 8 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=540782 9 http://www.touchbriefings.com/pdf/977/transport2.pdf 7
  • 8. Capacity Collaboration Definition and “International scientific collaboration—where scientists description work with their counterparts in other countries towards a common research goal—is growing as a percentage of all scientific activity. Researchers from developing countries are taking part in and benefiting from this activity. International collaboration takes a number of forms, including sharing of research data, joint experimentation, conferences and other meetings, building of databases, standards-setting, and equipment sharing. A research problem that spans the globe, such as global climate change or infectious disease control, can be one of the primary motivating forces behind international collaboration, followed by the location of specific resources, unique expertise, and the location of large-scale equipment.” 1 http://www.rand.org/pubs/monograph_reports/2005/MR135 7.0.pdf How it is used “International collaboration is replacing other models as the preferred method of building scientific capacity in developing countries and it appears to be producing results. Researchers from scientifically advanced countries collaborating with developing country counterparts report that these activities are building international-level scientific capacity in those countries. Indicators show that the amount of collaborative research between advanced and developing country scientists is rising. The number of scientific papers published between scientists from these countries has been rising as well.”2 http://www.rand.org/pubs/monograph_reports/2005/MR135 7.0.pdf What its “Although legal boundaries are a ready method of significance classification, relying on nation-states as a grouping for or impact has scientific activity does not represent the whole picture. been on SCM Often, a world-class capability exists in what would performance, otherwise be called a developing country. An example cited Global by scientists with whom we spoke is mathematics research Competition, in India, which is considered among the best in the world. and/or the 8
  • 9. effectiveness Other examples are China, which does world-class of seismology research, the Philippines, which is an organizations international leader in rice research, and Chile, which has developed strength in astronomy. In these cases, expertise grows out of deliberate government policies to support S&T capacity building, actions by international development organizations, the unique geography, ecology, history, or social conditions in a country, or the presence of special research equipment and laboratories. An examination of fields of specialization shows that the position of a country on a list of scientifically developing or lagging countries does not always reflect these pockets of excellence. Scientists from scientifically developing and lagging countries often work and study in the scientifically advanced countries. The links established between scientists create connections that often result in contact over many years’ time. Moreover, scientists from SDCs and SLCs working in advanced countries do not necessarily represent a net “brain drain.” Often these scientists retain close ties with laboratories in their countries of origin, help to channel resources there, and frequently train young scientists from their home country. While a large percentage of these scientists choose to reside in an advanced country, for some countries an increasing number return home to establish labs or otherwise enrich existing scientific research (NSF, 2000).” 3 http://www.rand.org/pubs/monograph_reports/2005/MR1357.0.pdf In which “Policymakers and economists continue to see science industries is and technology as an engine of economic growth. In this advanced industrialized countries, S&T has been shown to improvement contribute significantly to economic growth and productivity a popular or enhancement. Economists have yet to demonstrate the effective tool same concentration of benefit for developing countries. or technology Despite the lack of a theoretical or quantitative link between S&T investment and development in developing or underdeveloped countries, many policymakers assume that benefits will accrue from such investments. Specific cases where this has occurred, starting with Japan and more recently experienced in South Korea, India, and Brazil, suggest that S&T investments can help economic growth.”4 http://www.rand.org/pubs/monograph_reports/2005/MR1357.0.pdf 9
  • 10. Bibliography 1 http://www.rand.org/pubs/monograph_reports/2005/MR135 7.0.pdf 2 http://www.rand.org/pubs/monograph_reports/2005/MR135 7.0.pdf 3 http://www.rand.org/pubs/monograph_reports/2005/MR1357.0.pdf 4 http://www.rand.org/pubs/monograph_reports/2005/MR1357.0.pdf 10
  • 11. Collaborative Planning, Forecasting & Replenishment (CPFR) Definition and Collaborative Planning, Forecasting and Replenishment (CPFR) is a business description practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demand. How it is CPFR links sales and marketing best practices such as category management to used supply chain planning and execution processes, CPFR increases availability while reducing inventory, transportation and logistics costs. The CPFR reference model is designed to fit many scenarios. Any individual CPFR program must adapt the model to the particular needs of the trading relationship. Of the alternative approaches that have been documented, four specific scenarios have dominated large-scale CPFR deployments. To better assist companies who are contemplating CPFR initiatives, or are engaging trading partners in their programs, the CPFR guidelines now provide detailed descriptions of these specific scenarios. Retail Event Collaboration In many retail environments, promotions and other retail events generate the largest swings in demand, and as a result, the majority of out-of-stocks, excess inventory and unplanned logistics costs. Consequently, retailers in these highly promoted channels have focused their collaboration efforts on retail events, where their financial opportunity is greatest. 11
  • 12. The Retail Event Collaboration scenario of CPFR provides an industry-standard approach to this process. Trading partners develop a collaboration strategy and a joint business plan for promotions, typically on an annual or quarterly basis. They then work together to determine the impact of planned events on consumer demand and retail distribution. As events occur, promotional orders are placed, and delivery takes place. Then the event is executed in stores. Along the way, exceptions related to event planning or execution may be identified and resolved. The process concludes with an evaluation of event performance. The VICS Retail Event Collaboration Business Process Guide describes this scenario in more detail. DC Replenishment Collaboration DC replenishment collaboration is a CPFR scenario that enhances continuous replenishment programs such as co-managed inventory or vendor-managed inventory (VMI). Conventional replenishment programs typically calculate order requirements in a short lead-time horizon. A single trading partner entity manages the entire process. By contrast, DC Replenishment Collaboration offers a joint order commitment process at multiple horizons beyond a single lead-time. DC Replenishment Collaboration enables manufacturers to adopt a make-to-demand policy, while allowing retailers to minimize their inventory liability and stock-out risk. Trading partners typically collaborate on DC withdrawal forecasts, manufacturer-to-retailer DC forecasts, or both. The output of collaboration is an order or series of orders that are committed over a time horizon. The buyer and seller support order generation with their buying/re-buying and production and supply planning organizations respectively. DC Replenishment Collaboration extends the replenishment process beyond the buyer’s DC and seller’s finished goods warehouse to encompass all the nodes in the supply chain – from the store shelf to raw materials. The benefits attributed to DC replenishment collaboration include: Greater visibility to improve replenishment accuracy Out-of-stock reduction Overstock reduction Production capacity aligned to meet customer demand DC replenishment collaboration also seeks to increase the efficiency of the flow of product between trading partners, especially in supply chains that have long supply cycles, heavy, bulky or regulated goods, or complex transportation requirements. Product flow benefits include optimized order quantities that minimize the operations costs of picking, loading and unloading and product put-away. 12
  • 13. Store Replenishment Collaboration As with DC Replenishment, conventional store replenishment programs are executed by a single trading partner over a single lead-time horizon. Many retailers are now sharing more responsibility for the store-level availability of products via store-level collaboration initiatives. Store Replenishment Collaboration leverages the insights of both the retailer and manufacturer to drive an optimal replenishment plan. Trading partners typically collaborate on store POS forecasts. Other collaboration points that influence replenishment include: Store clustering Replenishment parameters Presentation stock Assortment optimization The output of Store Replenishment Collaboration is an order or series of orders that are committed over a time horizon. The buyer and seller support order generation with their replenishment planning/buying re-buying and production and supply planning organizations respectively. Store collaboration is focused on the closest link to the consumer and consequently directly influences shelf availability. The benefits attributed to Store Replenishment Collaboration include greater visibility to consumer take-away, improved replenishment accuracy, improved in-stocks, overstock reduction, and improved promotional execution. Trading partners have a direct view of how consumers are responding to new products, existing shelf distribution and promotional take-away. Manufacturers and upstream suppliers leverage this information throughout the supply chain for improved operational execution. Collaborative Assortment Planning Some industries, such as fashion apparel and accessories, follow a seasonal rhythm of demand. As a result, collaborative planning in this market segment typically has a horizon of a single season and is performed at seasonal intervals. The nature of fashion and other short lifecycle products implies that there is minimal discrete historical data to utilize in the planning cycle. Hence, there is a heavy dependence on collaborative interpretation of industry trends, consumer tastes and macroeconomic conditions. Collaborative Assortment Planning is a process that allows retailers and suppliers to better coordinate their merchandising decisions to drive maximum profitability for both constituencies. Trading partners jointly develop an assortment plan, which contains both visual representations of the product and financial models. The output of this collaboration process is a planned purchase order containing item commitments at the UPC (style/color/size) level for each delivery point in the retailer’s enterprise. The planned order is electronically shared in advance of a market or show, where sample products are viewed by the buyer and seller and final merchandising decisions are made. 13
  • 14. What its significance CPFR enhances the way that companies do business. The process is by no means a or impact has magic bullet, but it is a piloted and proven way of achieving four crucial objectives been on SCM necessary for growth: reducing working capital, reducing fixed capital, reducing performance, operating expense, and growing sales. Global Since the 1998 publication of the VICS CPFR guidelines, over 300 companies have Competition, implemented the process. Numerous case studies of CPFR projects document in- and/or the stock percentage improvements of 2 to 8% for products in stores, accompanied by effectiveness inventory reductions of 10 to 40% across the supply chain. of organizations In which CPFR has influenced industry sectors beyond retail, hard goods, apparel and industries is consumer packaged goods (CPG). The RosettaNet Collaborative Forecasting this standard for high-technology companies and the Chemical Industry Data Exchange improvement (CIDX) Supply Chain Collaboration process are prominent examples. a popular or effective tool or technology Bibliography http://www.vics.org/committees/cpfr/CPFR_Overview_US-A4.pdf 14
  • 15. Consortium Software Applications Definition and “The Telecommunications Information Networking Architecture (TINA) description Consortium is a multinational worldwide consortium, which aims at defining and validating an “open” architecture for telecommunications services in the emerging broadband, multimedia and “information super-highway“ era. The architecture is based on distributed computing, object orientation, and other concepts and standards from the telecommunications as well as the computer industry, e.g., ODP, IN, TMN, and CORBA. It is applicable to various networks, broadband (e.g., ATM) or narrowband. A large part of the TINA consortium's activity is devoted to validating the TINA architecture's current specifications through auxiliary projects, collaborative worldwide demonstrations, and implementations carried out by the consortium's core team. The vision of the TINA-C effort is, in short, to define and validate a consistent architecture for “open” telecommunications – addressing the needs from “traditional” and “new” services, as well as operations management type services, and the need for flexibility for new technologies. This vision implies a software architecture that offers the following: reusable software components; supports network-wide software interoperability; eases service construction, testing, deployment, and operation; and hides from the service designer the heterogeneity of the underlying technologies and the complexities introduced by distribution.” 1 Communications Magazine, IEEE; Nov. 1995; Vol. 33: Issue 11; pgs. 78-83 How it is used “The intention is to make use of recent advances in distributed computing (e.g., ITU Open Distributed Processing, OMG Object Management Architecture, and OSF Distributed Computing Environment) and object-oriented analysis and design, in order to achieve a drastically improved interoperability, a better reuse of software and specifications, and a flexible place- ment of software on computing platforms. The TINA Consortium will also define how IN and TMN are “integrated” (related) within this common distributed framework. Last but not least, the Consortium aims at working with closely related organizations, e.g., the Digital Audio Video Interoperahility Council (DAVIC), in order to harmonize the various software architectures specified so far.” 2 Communications Magazine, IEEE; Nov. 1995; Vol. 33: Issue 11; pgs. 78-83 What its “A new software joint venture spearheaded by India's largest software firm, Tata significance Consultancy Services (TCS), and a consortium of Chinese companies with Microsoft or impact has as a junior partner could pave the way for Indian and Chinese technology firms to been on SCM combine their skills and jointly penetrate the global IT market. The prospect of the performance, two Asian giants forming a potentially unbeatable combination has been the dream Global of many in their corporate circles, even while it has been a nightmare for American Competition, labor unions and outsourcing critics who say America has and/or the already lost 4oo,ooo high-quality technology jobs to India and China. The deal, effectiveness which is expected to be signed within the year, will aim to "create China's first of world-scale software company, which will serve as a model for other Chinese organizations companies," said S. Ramadorai, CEO of TCS, after a letter of intent to this effect 15
  • 16. was signed by all parties in Beijing. The new entity created by the joint venture will not only serve local Chinese clients but also look at expanding into international markets such as Japan, South Korea and the United States, TCS officials said. "The objective of the joint venture is twofold," said Girija Pande, TCS's regional director for the Asia Pacific region. On one hand it will give NASDAQ-listed TCS, which is expected to control about 7o percent of the new company, "preferential access" to the huge IT projects the Chinese government is poised to undertake. And in exchange TCS will coach its new Chinese partners--Beijing Zhongguancun Software Park Development Co., Ltd., Uniware Co., Ltd. and Tianjin Huayuan Software Park Construction and Development Co., Ltd., which will own about 25 percent of the new venture-in the processes and methods that have allowed TCS to become India's largest software company with $ 1.7 billion in revenues, Pande said.” 3 TITLE: Looking to the Future, India and China Target Software SOURCE: New Perspect Q 23 no1 Wint 2006 In which “With China currently poised to undertake massive IT-related projects, industries is including computerizing its huge but lumbering banking system, expanding this its telecommunications networks, developing various e-government improvement a popular or initiatives and modernizing its heavy industries such as steel, energy and effective tool mining, the Chinese government was keen to leverage TCS's experience in or technology handling large-scale, complicated projects. Beyond that is the obvious goal of using the lessons learned from TCS to carve out a piece of the expanding market in software and services exports for China.” 4 TITLE: Looking to the Future, India and China Target Software SOURCE: New Perspect Q 23 no1 Wint 2006 Bibliography 1 Communications Magazine, IEEE; Nov. 1995; Vol. 33: Issue 11; pgs. 78-83 2 Communications Magazine, IEEE; Nov. 1995; Vol. 33: Issue 11; pgs. 78-83 3 TITLE: Looking to the Future, India and China Target Software SOURCE: New Perspect Q 23 no1 Wint 2006 4 TITLE: Looking to the Future, India and China Target Software SOURCE: New Perspect Q 23 no1 Wint 2006 16
  • 17. Costing, Pricing, and Revenue Management Modeling (D) Definition Revenue Management (RM) is the optimal allocation of customer demand to and constrained products. description “Determining and updating the availabilities of different products to different customer segments subject to business and physical constraints in order to maximize operating profit.” (1) “At its heart, RM comprises a set of business process models in which certain decisions are made. These decisions govern what products a firm sells, to whom the products are sold and how the firm combines its resources to deliver its products.” (2) Cost modeling is the subject that tries to give proper mathematical dynamics to the cost process in order to be able to include it in the pricing of products or strategies. • New product: Maxager Technology Announces Maxager 7.3. Product allows variable and fixed cost components to be interactively modeled for specific products, customers, markets, salespeople and production facilities. (3) Price modeling is “... the spectrum of pricing strategies and tactics, which can be used in business relationships between suppliers and buyers. The price of a product is not limited to a direct quotation, which consists of the amount, currency and tax, but it is the result of a system of price components and rules. … it [price] is one of the four controllable variables of the marketing mix: product, promotion, price and place.” (4) How it is Cost modeling is used to help managers predict the impact of cost component used changes. Price modeling, similarly, is used to help managers do a scenario type analysis on the impact of different pricing structures. Revenue management encompasses both to determine the optimal amount, cost and price of a product to produce and sell, and helps managers determine to whom a product should be sold. What its Improved efficiencies through better planning and cost management; better service significance through the delivery of the right products to the right market at the right price; enables or impact has a company to be competitive, especially in an increasingly global business been on environment. SCM performance, Global Competition, and/or the effectiveness of organizations In which All industries have benefited from costing, pricing, and revenue management industries is modeling in one form or another, including the airline industry, manufacturing, this service industries, telecommunications, agriculture and trade, transportation and improvement utilities, leisure and hospitality, government a popular or effective tool or technology Bibliography 1) http://www.demingcenter.com/html_files/roi/PDF/Bob_Phillips.pdf 17
  • 18. 2) http://www.findarticles.com/p/articles/mi_m1094/is_2_34/ai_54405332/print 3) (http://news.thomasnet.com/fullstory/801254); for more information about Maxager 7.3, visit www.maxager.com 4) http://www2002.org/CDROM/refereed/516/ 18
  • 19. Cross-enterprise Integration Definition and Software that allows businesses to integrate information from various systems description across the enterprise. How it is used James Markarian describes the evolution of cross-enterprise integration software platforms as “recently matured with a broad array of native connectivity to virtually any enterprise data source: - Relational, mainframe and flat file data - Packaged applications (Siebel, SAP, Oracle, etc.) - Analytic systems (SAP BW, SAS, Informatica, etc.) - Cross-enterprise metadata - Web logs, clickstream and Radio Frequency Identification (RFID) data - EAI and messaging systems (webMethods, IBM WebSphere MQ, TIBCO, etc.) - Hierarchical structures (complex flat files, etc.). The advantage is obvious. Your programmers don’t need to manually code every line. Most of the connectivity you need is pre-built. And it’s reusable, saving you time and money. DI platforms have similarly evolved with multi-application read/ write access. This translates to data capture, transformation, and updates among any combination of sources and targets. Fetch data from your e-commerce engine on-the-fly and propagate it to your general ledger, inventory and logistics systems, and data warehouse. Feed information from Customer Relationship Management (CRM) applications to your call center to equip your agents with real-time customer data.” What its Informatica, a leading provider of cross-enterprise integration software, describes significance or the benefits in one industry, the energy industry, as follows: impact has been on SCM “While these companies are rich in information and IT solutions, they are often performance, unable to leverage the full value of their data, which is often locked in disparate Global silos across the organization. The quality of the data in these silos is often poor. Competition, Supply availability, system capacity, and real-time market price metric data from and/or the multiple sources must be accessed, discovered, cleansed, integrated, and delivered effectiveness of to the right place at the right time to drive key business initiatives such as: organizations “Reducing costs by increasing operational efficiency by integrating new systems with disparate IT infrastructures, and by ensuring that legacy data is properly understood, cleansed, and converted to meet the parameters of newly installed systems. Another benefit is “Establishing a robust regulatory compliance framework by pulling data (e.g., emissions, pricing, and trading information) from many disparate sources to simplify and accurately report on regulatory compliance issues, while ensuring that frontline managers and executives have real-time access to reliable, high-quality information. One more benefit is “Improving responsiveness to industry changes by harnessing data that is locked in individual information silos throughout the organization and creating a set of common, flexible data services that can support multiple operational systems.” Informatica solutions for the energy and utilities industry handle the complex, mission-critical data integration and data quality requirements of companies in this industry. 19
  • 20. Informatica solutions provide energy and utilities companies with: • Complete, accurate, and timely information to increase business confidence in the quality of data • End-to-end data quality management to satisfy the requirements of regulators and the business • Secure, scalable data integration platform to reduce risk • Collaborative lifecycle management to speed project delivery • Service-oriented architecture to increase flexibility With Informatica solutions, companies in the energy and utilities industry can access, discover, cleanse, and integrate the data residing in their numerous systems and deliver this data throughout the enterprise to: • Increase business confidence and decision-making capabilities-even during tumultuous times • Reduce the complexity of IT environments by bringing together disparate systems that track and manage data related to production, usage, and other areas • Adhere to regulatory compliance standards-including those related to physical and cyberspace security, environmental performance, rate information, and asset management-with clear audit trails and high data reliability • Improve customer service initiatives, identify new customer sectors, and better understand customer preferences • Increase operational efficiency, productivity, and responsiveness to business demands” In which Energy, Financial Services, Government, Public Sector, Healthcare, Life Sciences, industries is this Manufacturing, Retail, Telecommunications, and Transportation. improvement a popular or effective tool or technology Bibliography http://www.bijonline.com/index.cfm?section=article&aid=167 http://www.informatica.com/solutions/industry/energy_utilities/default.htm http://www.cbronline.com/article_news.asp? guid=140FEA27-3E72-4448-895D-2AFAB4B4D91E 20
  • 21. Customer Ordering and Status Notifications Definition and The following is written by Oracle and describes how they provide solutions “that description allow you to synchronize plans with your customers and suppliers, collaborate in real time both inside and outside your enterprise, execute plans, adapt to a dynamic environment, and measure performance to objectives.” 1 http://www.oracle.com/media/peoplesoft/en/pdf/brochures/e1_scm_b_scm_05_05.p df How it is used Companies that utilize technology to handle customer ordering and status notifications look for software “that facilitates all stages of supply chain management, from planning through execution.” They need software that “helps streamline everything from the earliest sales forecasts to customer’s acknowledgements of orders received.” Additionally, these companies need resources that “model complex supply chain scenarios, factoring in all relevant costs and all potential supply and demand constraints.”1 http://www.oracle.com/media/peoplesoft/en/pdf/brochures/e1_scm_b_scm_05_05.p df The following paper describes a “fictional account of a process manufacturer that faces a touch competititive challenge,” and how technology can be used to streamline supply chain management demands. 1 http://www.oracle.com/media/peoplesoft/en/pdf/brochures/e1_scm_b_scm_05_05.p df What its The following is how Microsoft Dynamics provides solutions that allow companies significance to positively increase their response to customers needs. Microsoft Dynamics is a or impact has software that “gives people across your supply-chain visibility into customer been on SCM demand and the delivery of goods—helping them make faster, better business performance, decisions and take the best course of action when adjustments are necessary. With Global features such as automatic notification, they easily can keep tabs on inventory, Competition, helping sustain optimal item levels without tying up funds in the warehouse. Your and/or the team can plan purchasing at favorable terms and in a timely manner, controlling effectiveness costs and ensuring that your organization meets its customer commitments. And they of can connect closely with operations to make sure manufacturing has the materials it organizations needs to deliver products on time.” “The members of your team who work directly with customers play an essential role in your business. Microsoft Dynamics solutions can give those employees the information, capability, and control to satisfy customers and strengthen your company’s competitive advantage.” “Microsoft Dynamics’ supply-chain strengths can help your team fulfill customer commitments with greater reliability and accountability, and deliver the products and services customers want, when they need them. Sales associates can set customer expectations realistically and provide customers efficiently with the information they 21
  • 22. need to make an informed buying decision. Get products to your company and ship to your customers in the most effective time frame to ensure satisfaction while managing costs. And help service staff respond to customer needs efficiently, helping build customer loyalty.” “You want to make sure that your products and services meet customer expectations today and in the future. Business information, reports, and analytical tools provided in Microsoft Dynamics supply-chain management solutions help you identify customer behaviors and market trends, and meet emerging needs before the competition does. Use the same tools to verify that sales and service operations and other supply chain-related business activities are being performed profitably and your people are reaching their individual and team goals.” “Extend and integrate your systems easily for the most effective supply-chain and business management. Microsoft Dynamics solutions work with the technologies familiar to many businesses—they are developed to work with and like other Microsoft products. This allows you to incorporate your technical resources, creativity, and working processes into one flexible SCM infrastructure, deriving the best value from your technology investment.” “Once information is entered into your integrated business management solution, it’s accessible where it’s needed. No matter whether your employees in shipping, inventory, or sales are serving customers, working with vendors, or researching business details—they can do so with fewer delays and distractions than finding information in a disconnected system.” “Snap-in software tools bring information such as order status or line-item details directly into e-mail or word processing programs, so employees can help keep the supply chain flowing without switching between complicated applications or having to track down information.” “You can use Microsoft BizTalk Server in SCM, manufacturing, and other lines of business to connect to legacy systems within your own organization or other companies.” “When you integrate Microsoft Dynamics with portal technology, you can offer collaborative business capabilities in a secure manner to individuals inside and outside of your organization. Connect people and processes across companies at the convenience of a Web browser or their desktops for optimal SCM productivity.” “Microsoft Dynamics solutions give businesses a cost-effective way to integrate SCM with radio frequency identification (RFID) technology so you can engage effectively even with the largest customers and suppliers.” 2 http://www.microsoft.com/dynamics/businessneeds/supply_chain_management.msp 22
  • 23. x#EQG In which Although large businesses benefit from enhancing the customer’s experience industries is through technology, the following is a link to how small and medium sized this enterprises have utilized technology to improve their ability to keep up with improvement customer demands. 3 http://www.crm2day.com/library/pdf.php?pdf=50155-0.pdf a popular or effective tool or technology Bibliography 1) http://www.oracle.com/media/peoplesoft/en/pdf/brochures/e1_scm_b_scm_05_05.p df 2) http://www.microsoft.com/dynamics/businessneeds/supply_chain_management.msp x#EQG 3) http://www.crm2day.com/library/pdf.php?pdf=50155-0.pdf 23
  • 24. Customer Relationship Management (CRM) Definition Customer relationship management (CRM) covers methods and technologies used and by companies to manage their relationships with clients. Information stored on description existing customers (and potential customers) is analyzed and used to this end. Automated CRM processes are often used to generate automatic personalized marketing based on the customer information stored in the system. How it is Customer relationship management is a corporate level strategy, focusing on creating used and maintaining relationships with customers. Several commercial CRM software packages are available which vary in their approach to CRM. However, CRM is not a technology itself, but rather a holistic approach to an organization's philosophy, placing the emphasis firmly on the customer. CRM governs an organization's philosophy at all levels, including policies and processes, front of house customer service, employee training, marketing, systems and information management. CRM systems are integrated end-to-end across marketing, sales, and customer service. A CRM system should: • Identify factors important to clients. • Promote a customer-oriented philosophy • Adopt customer-based measures • Develop end-to-end processes to serve customers • Provide successful customer support • Handle customer complaints • Track all aspects of sales • Create a holistic view of customers' sales & services information There are three fundamental components in CRM: • Operational - automation of basic business processes (marketing, sales, service) Operational CRM provides automated support to "front office" business processes (sales, marketing and service). Each interaction with a customer is generally added to a customer's history, and staff can retrieve information on customers from the database as necessary. According to the Gartner Group, operational CRM typically involves three general areas: Sales Force Automation, Customer service and Support and Enterprise marketing automation. • Analytical - analysis of customer data and behavior using business intelligence 24
  • 25. Analytical CRM analyses data (gathered as part of operational CRM, or from other sources) in an attempt to identify means to enhance a company's relationship with its clients. The results of an analysis can be used to design targeted marketing campaigns, for example: • Acquisition: Cross-selling, up-selling • Retention: Retaining existing customers (antonym: customer attrition) • Information: Providing timely and regular information to customers Other examples of the applications of analyses include: • Contact optimization • Evaluating and improving customer satisfaction • Optimizing sales coverage • Fraud detection • Financial forecasts • Price optimization • Product development • Program evaluation • Risk assessment and management • Strategic Marketing • Operational marketing • Collaborative - communicating with clients Collaborative CRM focuses on the interaction with customers (personal interaction, letter, fax, phone, Internet, e-mail etc.) Collaborative CRM includes: • Providing efficient communication with customers across a variety of communications channels • Providing online services to reduce customer service costs • Providing access to customer information while interacting with customers What its CRM covers all interaction and business with customers. A good CRM program significance allows a business to acquire customers, provide customer services and retain valued or impact has customers. been on SCM Customer services can be improved by: performance, • Providing online access to product information and technical assistance Global around the clock Competition, • Identifying what customers value and devising appropriate service strategies and/or the for each customer 25
  • 26. effectiveness • Providing mechanisms for managing and scheduling follow-up sales calls of • Tracking all contacts with a customer organizations • Identifying potential problems before they occur • Providing a user-friendly mechanism for registering customer complaints • Providing a mechanism for handling problems and complaints • Providing a mechanism for correcting service deficiencies • Storing customer interests in order to target customers selectively • Providing mechanisms for managing and scheduling maintenance, repair, and on-going support For a CRM solution to be very efficient and effective it needs to be integrated with the Supply Chain Management system of the organization. This will enable a better customer satisfaction by setting realistic customer expectations for available to promise for deliveries and avoid stock outs by predicting the customer demand and improving the customer experience. In which Companies in various industries have realized the importance of the customer loyalty industries is and customer service is as critical as acquiring new customers and hence have made this significant investments in the CRM initiatives. Some of the examples are Retailers, improvement Banks, Financial firms, Airlines, industrial manufacturing, Non-Profit organizations. a popular or effective tool or technology 26
  • 27. Data Mining Definition and “Data mining (DM), also called Knowledge-Discovery in Databases (KDD) or description Knowledge-Discovery and Data Mining, is the process of automatically searching large volumes of data for patterns such as association rules. It is a fairly recent topic in computer science but applies many older computational techniques from statistics, information retrieval, machine learning and pattern recognition.” (1) How it is used “Data mining has been defined as "the nontrivial extraction of implicit, previously unknown, and potentially useful information from data" [4] and "the science of extracting useful information from large data sets or databases" [5]. It involves sorting through large amounts of data and picking out relevant information. It is usually used by businesses and other organizations, but is increasingly used in the sciences to extract information from the enormous data sets generated by modern experimentation. Metadata, or data about a given set of data, are often expressed in a condensed data mine-able format, or one that facilitates the practice of data mining. Common examples include executive summaries and scientific abstracts. Although data mining is a relatively new term, the technology is not. Companies for a long time have used powerful computers to sift through volumes of data such as supermarket scanner data, and produce market research reports. Continuous innovations in computer processing power, disk storage, and statistical software are dramatically increasing the accuracy and usefulness of analysis.” (2) What its “Although the term "data mining" is usually used in relation to analysis of data, like significance artificial intelligence, it is an umbrella term with varied meanings in a wide range of or impact has contexts. Unlike data analysis, data mining is not based or focused on an existing been on SCM model which is to be tested or whose parameters are to be optimized. performance, Global In statistical analyses where there is no underlying theoretical model, data mining is Competition, often approximated via stepwise regression methods wherein the space of 2k possible and/or the relationships between a single outcome variable and k potential explanatory effectiveness variables is smartly searched. With the advent of parallel computing, it became of possible (when k is less than approximately 40) to examine all 2k models. This organizations procedure is called all subsets or exhaustive regression. Some of the first applications of exhaustive regression involved the study of plant data.[6] Data dredging Data dredging or data fishing are terms one may use to criticize someone's data mining efforts when it is felt the patterns or causal relationships discovered are unfounded. 27
  • 28. Data dredging is the scanning of the data for any relationships, and then when one is found coming up with an interesting explanation. The conclusions may be suspect because data sets with large numbers of variables have by chance some "interesting" relationships. Fred Schwed [7] said: "There have always been a considerable number of people who busy themselves examining the last thousand numbers which have appeared on a roulette wheel, in search of some repeating pattern. Sadly enough, they have usually found it." Nevertheless, determining correlations in investment analysis has proven to be very profitable for statistical arbitrage operations (such as pairs trading strategies), and correlation analysis has shown to be very useful in risk management. Indeed, finding correlations in the financial markets, when done properly, is not the same as finding false patterns in roulette wheels. Some exploratory data work is always required in any applied statistical analysis to get a feel for the data, so sometimes the line between good statistical practice and data dredging is less than clear. Most data mining efforts are focused on developing highly detailed models of some large data set. Other researchers have described an alternate method that involves finding the minimal differences between elements in a data set, with the goal of developing simpler models that represent relevant data. [8] When data sets contain a big set of variables, the level of statistical significance should be proportional to the patterns that were tested. For example, if we test 100 random patterns, it is expected that one of them will be "interesting" with a statistical significance at the 0.01 level. Cross validation is a common approach to evaluating the fitness of a model generated via data mining, where the data is divided into a training subset and a test subset to respectively build and then test the model. Common cross validation techniques include the holdout method, k-fold cross validation, and the leave-one- out method.” (3) In which Data mining has found applications in all data intensive industries. The world wide industries is web has made data mining an industry in itself. Industries which have profited from this data mining include advertising, retailing, manufacturing, Customer Relationship improvement Management, construction, engineering, warehouse management, manufacturing, a popular or city/state/federal government, chemical, pharmaceutical, food & beverage, paper, effective tool metal, life sciences, natural products, automotive, international trade, finance, and or technology insurance related industries. Bibliography 1) http://en.wikipedia.org/wiki/Data_mining 2) http://en.wikipedia.org/wiki/Data_mining 3) http://en.wikipedia.org/wiki/Data_mining 28
  • 29. 4) W. Frawley and G. Piatetsky-Shapiro and C. Matheus, Knowledge Discovery in Databases: An Overview. AI Magazine, Fall 1992, pp. 213-228. 5) ^ D. Hand, H. Mannila, P. Smyth: Principles of Data Mining. MIT Press, Cambridge, MA, 2001. ISBN 0-262-08290-X 6) ^ A.G. Ivakhnenko, Heuristic Self-Organization in Problems of Engineering Cybernetics, GMDH library, Automatica, 6, 1970, pp.207–219. 7) ^ Fred Schwed, Jr, Where Are the Customers' Yachts? ISBN 0-471-11979-2 (1940). 8) ^ T. Menzies, Y. Hu, Data Mining For Very Busy People. IEEE Computer, October 2003, pp. 18-25. 9) ^ K.A. Taipale, Data Mining and Domestic Security: Connecting the Dots to Make Sense of Data, Center for Advanced Studies in Science and Technology Policy. 5 Colum. Sci. & Tech. L. Rev. 2 (December 2003). 10) ^ Stephen Haag et al., Management Information Systems for the information age, pp. 28. ISBN 0-07-095569-7 29
  • 30. Demand Forecasting and Order Fulfillment Modeling (D) Definition and • “Order fulfillment is in the most general sense the complete process of from description point of sales inquiry to delivery of product to the customer.” 1 http://en.wikipedia.org/wiki/Order_fulfillment • Demand forecasting: predicting future demand for products of a business organization • Demand forecasting and order fulfillment modeling represent the utilization of information technology and statistical analysis to improve forecasting and order fulfillment. This is often accomplished using advanced software packages and information systems. 2 http://www.oracle.com/applications/peoplesoft/scm/ent_one/module/demand_foreca st.html How it is used • Causal analysis used to improve forecasting and expedite order fulfillment efficiently. • Used in a variety of business disciplines, including marketing and sales, production, financial services, purchasing and human resource management. • Demand forecasting programs are used to develop statistically based forecasts to predict and plan future demand. • Critical for tactical planning 3 (http://www.demandplanning.net/documents/dmdaccuracywebVersions.pdf) What its • Demand information drives the supply chain. significance • Demand forecasting and order fulfillment modeling are critical components to or impact has the effectiveness of the organization from a competitive standpoint (domestically been on SCM and internationally) as well as from an internal efficiencies perspective. performance, • Improved top- and bottom-line performance; improved balance of supply relative Global to demand; more efficient use of resources; enables a firm to be more globally Competition, competitive and/or the effectiveness of organizations In which Manufacturing and information technology industries; trade; utilities and industries is transportation; health services this improvement a popular or effective tool or technology Bibliography 1 http://en.wikipedia.org/wiki/Order_fulfillment 2 http://www.oracle.com/applications/peoplesoft/scm/ent_one/module/demand_foreca st.html 3 (http://www.demandplanning.net/documents/dmdaccuracywebVersions.pdf) 30
  • 31. E-Commerce Definition 1,2 and description How it is used What its significance or impact has been on SCM performance, Global Competition, and/or the effectiveness of organizations In which industries is this improvement a popular or effective tool or technology 31
  • 32. Enterprise Resource Planning (ERP) Definition and 1,2,3 description How it is used What its significance or impact has been on SCM performance, Global Competition, and/or the effectiveness of organizations In which industries is this improvement a popular or effective tool or technology 32
  • 33. Leveraged Intelligence Definition Leveraged intelligence is a broad category of applications and technologies for and gathering, storing, analyzing, and providing access to data to help enterprise users description make better business decisions. Leveraged intelligence applications include the activities of decision support systems, query and reporting, online analytical processing (OLAP), statistical analysis, forecasting, and data mining. How it is Businesses make more intelligent and responsive business decisions with more used efficient tapping and leveraging of the combined enterprise wide knowledge from a wide variety of data sources across an enterprise. What its According to Jim Wirth, “More than ever, today’s leading global manufacturing significance companies are using business intelligence to improve their integrated supply chains. or impact has The benefits can range from identifying which supply chain processes result in been on unfavorable variances and why, to reporting and analyzing vital information such as: SCM performance, • days sales outstanding, Global • order backlog, Competition, • time to fill orders, and/or the • inventory days of supply, and effectiveness • order to cash cycle time. of organizations In addition, costs can be reduced by understanding buyer and supplier performance metrics and better management of demand and supply planning” SAS also provides a suite of business intelligence applications as described below: The SAS Supply Chain Intelligence suite As a suite of modular, targeted solutions that leverage existing investments in operational/transactional systems, SAS Supply Chain Intelligence Solutions provides a holistic view and monitoring capability across the extended supply chain while also delivering analytics-based insights and decision guidance that maximize profits. SAS Demand Intelligence Get market-driven planning through accurate demand forecasting and optimal inventory replenishment planning and pricing strategies. This solution is comprised of three integrated components including Demand Planning, Inventory Replenishment Planning and Price Optimization. SAS Value Chain Analytics Obtain financial intelligence at the granular level required to make fact-based decisions for reducing costs and improving profitability throughout the entire delivery process, including looking outside one's own operation in order to achieve maximum benefits. SAS Process Intelligence 33
  • 34. Exploit integrated data and problem solving, monitoring, control, and improvement actions that align with value creation across your enterprise, all from a single, integrated vantage point, resulting in reduced cycle times and time-to-market, increased product quality and throughput, as well as better asset utilization. SAS Supplier Relationship Management Collect, analyze and leverage all aspects of your supplier data and purchasing history, optimizing your strategic sourcing and achieving significant cost savings. This comprehensive, integrated solution helps you achieve substantial returns through three main areas of procurement: strategy alignment and score carding, opportunity exploration and detailed spend analysis with decision support. SAS Warranty Analysis Reduce warranty costs and improve quality by leveraging warranty claims, call center and other data sources to identify fraudulent claims, detect emerging issues, focus problem-solvers and forecast warranty costs. SAS Intelligence Platform A scalable, extensible, robust environment that provides the foundation for creating enterprise intelligence in the overall supply chain. In which Large global manufacturers such as DuPont, GE, Ford, aerospace defense contractors, industries is and the US government’s Defense Logistics Agency. this improvement a popular or effective tool or technology Bibliography http://www.bitpipe.com/rlist/term/Business-Intelligence.html SCORing Big with your Supply Chain Business Intelligence Initiatives, Jim Wirth, January 31, 2006, http://www.b-eye-network.com/view/2308 http://www.sas.com/offices/europe/uk/solutions/sci/index.html 34
  • 35. Peer To Peer Networks Definition “A peer-to-peer (or P2P) computer network is a network that relies primarily on the and computing power and bandwidth of the participants in the network rather than description concentrating it in a relatively low number of servers. P2P networks are typically used for connecting nodes via largely ad hoc connections. Such networks are useful for many purposes. Sharing content files (see file sharing) containing audio, video, data or anything in digital format is very common, and real-time data, such as telephony traffic, is also passed using P2P technology.” “A pure peer-to-peer network does not have the notion of clients or servers, but only equal peer nodes that simultaneously function as both "clients" and "servers" to the other nodes on the network. This model of network arrangement differs from the client-server model where communication is usually to and from a central server. A typical example for a non peer-to-peer file transfer is an FTP server where the client and server programs are quite distinct, and the clients initiate the download/uploads and the servers react to and satisfy these requests.” 1 http://en.wikipedia.org/wiki/P2p Biz2Peer Technologies is a company that provides P2P marketplace platforms conducting supply chain management. Here is their definition of Peer-to-Peer networking. 2 http://www.biz2peer.com/p2p.htm How it is Peer to peer is not as popular as server client networking. “Technically, a completely used pure peer-to-peer application must implement only peering protocols that do not recognize the concepts of "server" and "client". Such pure peer applications and networks are rare. Most networks and applications described as peer-to-peer actually contain or rely on some non-peer elements, such as DNS. Also, real world applications often use multiple protocols and act as client, server, and peer simultaneously, or over time. Completely decentralized networks of peers have been in use for many years: two examples are Usenet (1979) and FidoNet (1984).” 1 http:// en.wikipedia.org/wiki/P2p However, “In contrast to client/server networks, P2P networks promised improved scalability, lower cost of ownership, self-organized and decentralized coordination of previously underused or limited resources, greater fault tolerance, and better support for building ad hoc networks. In addition, P2P networks provide opportunities for new user scenarios that could scarcely be implemented using customary approaches” http://www.idea-group.com/downloads/excerpts/Subramanian01.pdf 3 Supply chain management can be streamlined through peer-to-peer networking. Here is an example of a few companies that explain how it is used: “Biz2Peer explains how they “have solved through our peer-to-peer architecture many of the shortcomings and problems that centralized platforms exhibit, from e- commerce to Supply Chain Management.” 4 http://www.biz2peer.com/strategy.htm Another company that offers peer-to-peer networking solutions for supply chain 35
  • 36. management is Sourceree. “Sourceree is an innovator in the field of web-based supply chain visibility and control systems and was created in February 2000 by Ken Lyon, former VP of International Information Services for UPS Logistics Group.” “The company, which is currently pre-revenue, will shortly bring to market the world's first independent supply chain visibility system, designed to allow multi- national companies to directly monitor and control their global supply chains in ways that will dramatically improve customer service and reduce cost.”5 http://www.prnewswire.co.uk/cgi/news/release?id=29201 What its "Peer-to peer computing will have particular relevance in this complex industry significance (global supply chain). Research among supply chain professionals suggests that the or impact has average global supply chain has as many as 2,000 participants and that their been on complexity is increasing, as companies seek to serve global markets and to pursue the SCM advantages of global sourcing and outsourced manufacturing." 6 performance, http://www.prnewswire.co.uk/cgi/news/release?id=29201 Global Competition, Please see the presentation, “Leveraging Peer-to-Peer Computing Technology in and/or the Supply Chain Management”7 http://e-aec.stanford.edu/presentations/CIFESeed2001- effectiveness Final.pdf of organizations Click on this link to read how P2P is shaping our new economy. 8 http://supplychain.ittoolbox.com/pub/AW100901.pdf In which “Peer-to-peer systems and applications have attracted a great deal of attention from industries is computer science research; some prominent research projects include the Chord this project, the PAST storage utility, the P-Grid, a self-organized and emerging overlay improvement network and the CoopNet content distribution system (see below for external links a popular or related to these projects).” effective tool or “Peer-to-peer networks have also begun to attract attention from scientists in other technology disciplines, especially those that deal with large datasets such as bioinformatics. P2P networks can be used to run large programs designed to carry out tests to identify drug candidates. The first such program was begun in 2001 the Centre for Computational Drug Discovery at Oxford University in cooperation with the National Foundation for Cancer Research. There are now several similar programs running under the auspices of the United Devices Cancer Research Project. On a smaller scale, a self-administered program for computational biologists to run and compare various bioinformatics software is available from Chinook. Academic institutions have also begun experimenting with file sharing: one of the most interesting projects is LionShare.” 9 http://en.wikipedia.org/wiki/P2p Bibliography 1 http://en.wikipedia.org/wiki/P2p 2 http://www.biz2peer.com/p2p.htm 3 http://www.idea-group.com/downloads/excerpts/Subramanian01.pdf 4 http://www.biz2peer.com/strategy.htm 5 http://www.prnewswire.co.uk/cgi/news/release?id=29201 6 http://www.prnewswire.co.uk/cgi/news/release?id=29201 36
  • 37. 7 http://e-aec.stanford.edu/presentations/CIFESeed2001-Final.pdf 8 http://supplychain.ittoolbox.com/pub/AW100901.pdf 9 http://en.wikipedia.org/wiki/P2p 37
  • 38. Real Time Data Management (D) Definition • Ability to process multiple streams of data concurrently; real time means and delivering information almost instantaneously after an event occurs. 1 description http://en.wikipedia.org/wiki/Real_time_business_intelligence • “The definition of “real-time” is relative to an organization’s critical information needs. For some organizations, real-time response may be defined as “within-a- minute”, while for other organizations working in situations where instantaneous response is required it may be as small as a few milliseconds.” “7 Simple Rules For Successful Real-Time Business Intelligence Implementation” by Jaymin Patel 2 http://www.businessintelligence.com/ex/asp/code.151/xe/article.htm How it is To manage inventory; monitor sales; exchange information across platforms and used outside the business, including internationally; data management and compilation. It is used to improve managers’ decision-making capabilities. What its • It is changing the landscape of business and the rules of competition through the significance high-speed delivery of information or impact has • Real time data management helps managers make better business decisions based been on on the most current information SCM “The Real Time Data Management Imperative” by Ken Rugg and Mark Palmer performance, (March 2005); 3 http://www.dbta.com/in-depth/mar05/rugg-palmer.html Global • “IT staffs are also realizing that right time is a better term to use than real time. Competition, Right time implies that different business situations and events require different and/or the response or action times. When planning a right-time processing environment, it effectiveness is important to match technology requirements to the actual action times required of by the business - some situations require close to a real-time action, whereas with organizations others, a delay of a few minutes or hours is acceptable.” “Now is the Right Time for Real-Time BI” by Colin White Article published in DM Review Magazine (Sept. 2004) 4 http://www.dmreview.com/article_sub.cfm?articleId=1009281 In which Nearly every industry, including military; aerospace; manufacturing; trade; industries is agriculture; financial services; health care; telecommunications; government this improvement a popular or effective tool or technology Bibliography 1 http://en.wikipedia.org/wiki/Real_time_business_intelligence 2 http://www.businessintelligence.com/ex/asp/code.151/xe/article.htm 3 http://www.dbta.com/in-depth/mar05/rugg-palmer.html 4 http://www.dmreview.com/article_sub.cfm?articleId=1009281 38
  • 39. Resource Planning Software (L) Link 1 http://en.wikipedia.org/wiki/Enterprise_resource_planning How it is “… to be considered an ERP system, a software package generally would only need used to provide functionality in a single package that would normally be covered by two or more systems. The introduction of an ERP system to replace two or more independent applications eliminates the need for external interfaces previously required between systems.” Typical applications of the software include manufacturing, logistics, distribution, inventory, shipping, invoicing and accounting for a company. Resource planning software also can aid in sales, marketing, delivery, quality management, HRM, CRM and SRM 2 (http://en.wikipedia.org/wiki/Enterprise_resource_planning) What its • Decreased costs through standardization and lower maintenance (one system significance instead of two or more) or impact has • Efficiency and ease of access to information, which allows for greater information been on sharing and reporting capabilities across the organization (all data is typically kept SCM in one database). performance, • Improved global communication and information sharing Global Competition, and/or the effectiveness of organizations In which Many industries utilize resource planning software, including manufacturing, industries is telecommunications, energy, oil and gas, agriculture, mining and construction, health this care, information, trade, government, transportation and utilities improvement a popular or effective tool or technology Bibliography 1 http://en.wikipedia.org/wiki/Enterprise_resource_planning 2 http://en.wikipedia.org/wiki/Enterprise_resource_planning 39
  • 40. Sarbanes/Oxley Definition “The Sarbanes–Oxley Act of 2002 (Pub. L. No. 107-204, 116 Stat. 745, also known and as the Public Company Accounting Reform and Investor Protection Act of 2002 description and commonly called SOX or SarbOx; July 30, 2002) is a United States federal law passed in response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, and WorldCom (now MCI). These scandals resulted in a decline of public trust in accounting and reporting practices. Named after sponsors Senator Paul Sarbanes (D–Md.) and Representative Michael G. Oxley (R– Oh.), the Act was approved by the House by a vote of 423-3 and by the Senate 99-0. The legislation is wide ranging and establishes new or enhanced standards for all U.S. public company boards, management, and public accounting firms. The Act contains 11 titles, or sections, ranging from additional Corporate Board responsibilities to criminal penalties, and requires the Securities and Exchange Commission (SEC) to implement rulings on requirements to comply with the new law. Some believe the legislation was necessary and useful, others believe it does more economic damage than it prevents, and yet others observe how essentially modest the Act is compared to the heavy rhetoric accompanying it.” “The first and most important part of the Act establishes a new quasi-public agency, the Public Company Accounting Oversight Board, which is charged with overseeing, regulating, inspecting, and disciplining accounting firms in their roles as auditors of public companies. The Act also covers issues such as auditor independence, corporate governance and enhanced financial disclosure. It is considered by some as one of the most significant changes to United States securities laws since the New Deal in the 1930s.” http://en.wikipedia.org/wiki/Sarbanes-Oxley_Act SOX not only requires that CEO’s maintain accountability for their financial records but “CIO’s also play a vital role in the signoff of financial statements. CIO’s are not only responsible for ensuring security and reliability of the systems that manage and report the financial data, but are accountable for the implementation and documentation of internal IT controls.” Businesses such as Altiris are developing lifecycle management solutions to help companies balance their SOX demands while they manage their supply chain. 1 http://supplychain.ittoolbox.com/white-papers/the- sarbanesoxley-act-from-an-it-perspective-3244 How it is “Sarbanes-Oxley contains many benefits outside of ensuring balance sheet accuracy; used it provides IT with an opportunity to increase the company’s bottom line. This can be accomplished by discovering all assets within the environment and how they are being used to determine optimization opportunities, reduce maintenance and lease costs associated with unused software and hardware, reduce support costs through standardization, increase awareness of budgeting restrictions, and accurate tracking of strategic purchasing activities. Each one of these activities leads IT organizations to 40
  • 41. eliminate “wasted” capital spending. Sarbanes-Oxley has sped up the need for IT organizations to manage all costs associated with supplying assets and services that make up the corporate IT infrastructure.” 2 http://hosteddocs.ittoolbox.com/altiris010306a.pdf What its “Sarbanes-Oxley has sped up the need for IT organizations to manage all costs significance associated with supplying assets and services that make up the corporate IT or impact has infrastructure.” 3 http://hosteddocs.ittoolbox.com/altiris010306a.pdf been on SCM “Section 404 of the Sarbanes-Oxley Act is focused on the implementation and documentation performance, of internal controls. Currently, Sarbanes-Oxley has not taken into account the requirements Global and strain resting on the Competition, shoulders of IT organizations and their support of key systems. IT is the owner of financial data, applications, and hardware and network components managing and presenting financial and/or the data. Therefore, IT becomes a key component. Many public companies have invested heavily effectiveness in ERP applications, reporting tools, role-and scope-based security, and data storage utilities of to help manage and present financial data while others continue to manage financial data in organizations spreadsheets stored on their desktops. Regardless of the management and storage facilities, companies need to ensure the accuracy, security, and availability of financial data and documented processes through systems management.” “There are three main components associated with managing systems to ensure support of corporate Sarbanes-Oxley initiatives: • System and asset security • System availability • Contingency plans” 4 http://hosteddocs.ittoolbox.com/altiris010306a.pdf In which Some private companies, but mostly publicly traded companies are impacted by SOX industries is and supply chain management demands. “By 2010, Gartner expects that IT spending this will represent 50 percent of most enterprises’ capital budget.” —Gartner, F. O’brien, improvement August 2003 “Corporate spending on IT will continue to increase during the next a popular or several years. Due to Sarbanes-Oxley, IT organizations, if they are not already doing effective tool so, will need to run their operations like a business. Sarbanes-Oxley creates a level of or transparency to the IT organization that has up until now been hidden by balance technology sheets and profit and loss statements. Section 404 of the Sarbanes-Oxley Act requires that the flow of monies be documented and readily available to demonstrate which expenditures were related to IT investments and operational costs. This means IT will need to report on costs associated with IT projects, resources, and asset investments. With increased IT spending, IT becomes an area of focus for investors.” 5 http://hosteddocs.ittoolbox.com/altiris010306a.pdf Bibliography 1 http://supplychain.ittoolbox.com/white-papers/the-sarbanesoxley-act-from-an-it- perspective-3244 2 http://hosteddocs.ittoolbox.com/altiris010306a.pdf 3 http://hosteddocs.ittoolbox.com/altiris010306a.pdf 41
  • 42. 4 http://hosteddocs.ittoolbox.com/altiris010306a.pdf 5 http://hosteddocs.ittoolbox.com/altiris010306a.pdf 42
  • 43. Skills Locators Definition Skills locators are software tools that help businesses assess and develop their human and resource skills. These tools give business leaders greater visibility of the breadth of description skills within their organizations and gaps where skills are lacking. How it is Infobasis, a skills locator software provider, describes the benefits to using their Total used Capability Management (TCM) tool as “designed to help you assess your business objectives and identify the skills you require to achieve them. It ensures that the right people with the right skills are in the right roles at the right time.Simply put, TCM can provide you with an unprecedented level of transparency and control across your organisation, end to end. “ “From the board level… A properly implemented Total Capability Management programme gives senior directors an unprecedented view of: Current and likely future skills gaps by department, geography or role Skills risk and succession planning requirements Business-focused recruitment and training needs “ ”…to senior management… Through Total Capability Management, line managers are presented with a clear picture of staff skills, both within and outside their department. This data can be used to: Build project teams quickly and effectively Standardise job descriptions Re-deploy staff to maximum effect” ”…to individual employees… Total Capability Management also gives individual employees control over their roles and career paths. They can develop: A clear personal learning and development plan An understanding of what skills they currently have A record of their skills achievements beyond formal training” What its The effectiveness of organizations has been significantly improved by skills locator significance software because of improved human resource management. Companies can identify or impact has where they are lacking skills and can test the skills of candidates seeking to fill these been on needs. eSkill, a subscription skills locator service, describes the impact of their SCM service as “an effective method of ensuring your candidates have the skills needed for performance, your jobs before an extensive interview process. eSkill's online testing tool creates Global valid, job-based tests by combining multiple subjects and skill levels as needed into a Competition, single assessment. Save your organization time and money, and reduce the possibility and/or the of hiring bias by giving a pre-hiring skill assessment to every applicant directly over effectiveness the Web. No software other than a browser is needed. For increased assurance that of you are testing whom you intend, after a phone interview have your candidate sign organizations into the test and within minutes know if you should pursue an interview. eSkill is 43
  • 44. based on the latest platforms and technologies to deliver complete test-customizing features with reliable performance using only a browser. An employer can choose from a wide variety of assessments and skill level testing. With eSkill's easy to use product, low risk opportunity, and flat competitive pricing plan, your organization can assess as many prospects and present employees as needed at a controlled cost.” In which Information Technology firms, Government, Public Sector. industries is this improvement a popular or effective tool or technology Bibliography http://www.infobasis.com/products.html http://www.eskill.com/ 44
  • 45. Supply Chain Coordination Definition “… the need for firms to look outside of their organizations for opportunities to and collaborate and coordinate with partners to ensure that the supply chain is both description efficient and responsive to dynamic market needs. Such collaboration and coordination opportunities introduce new challenges and complexities as a result of increased problem scale and scope, and potentially conflicting incentives among different supply chain players.” (1) How it is Supply chain coordination usage can be best described in terms of the models used proposed to resolve the usage issues with supply chain coordination and collaboration. The list below represents models that describe common problems and approaches of supply chain coordination: * “the game-theoretic approach to modeling supply chain competition where market share is based strictly on customer service levels (Boyaci and Gallego 2004). The resulting analysis shows that supply chain coordination is an equilibrium strategy, but not necessarily one that increases supply chain profits. Rather, consumers are the only guaranteed beneficiaries of coordination when supply chains compete strictly on service levels.” * “analysis of vendor-managed-inventory arrangements for component suppliers in assembly operations, where each supplier's inventory performance is affected by other suppliers' abilities to supply components required for assembly operations (Gerchak and Wang 2004). This analysis compares performance under a revenue sharing and inventory subsidy arrangement to a wholesale-price-only contract * “an analysis of sales and raw material discount coordination using a model motivated by Toshiba's global notebook supply chain (Souza, Zhao, Chen, and Ball 2004). This analysis leads to interesting conclusions on the extent of raw material discounts that should be passed along to consumers in a coordinated supply chain. For example, short-term raw material discounts may require longer term end-item discounts in order to increase total supply chain profit” * “a decision model that characterizes the interaction between inventory policies, optimal manufacturer effort, and channel structure when manufacturer and retailer experience asymmetry in stockout costs due to consumer-driven product substitution (Kraiselburd, Narayanan, and Raman 2004). This analysis shows that a vendor- managed-inventory (VMI) strategy can increase channel inefficiency when there is a high likelihood of product substitution and manufacturer effort has little effect on product demand” * “analysis of the effectiveness of the use of quantity discounts for channel coordination under a variety of supply chain cost structures and demand characteristics (Shin and Benton 2004). This study reveals that although quantity discounts can be an effective coordination mechanism, a number of other factors, such as demand variability and the relative inventory cost structures of channel partners” * “a framework for planning and scheduling in supply chains, with a corresponding discussion of a planning and scheduling system implementation at Carlsberg A/S, a Denmark-based beer brewer with global distribution (Kreipl and Pinedo 2004)” * “models and issues for addressing "channel conflict" when a single firm 45
  • 46. simultaneously serves as a direct marketer and a supplier to competing distributors (Tsay and Agrawal 2004). Somewhat surprisingly, the results of this study show that both a reseller and its supplier can be better off when the supplier simultaneously implements a direct sales channel alongside the reseller” * “a model for decentralized coordination of operations-level decisions using a private e-marketplace in which players have limited information about each other (Poundarikapuram and Veeramani 2004). This model enables distributed coordination with near-optimal performance in a fraction of the computing time required for obtaining the optimal centralized solution.” (2) What its The importance of Supply Chain Coordination and Collaboration can not be over significance stated. The models identified previously identify significant problems which occur in or impact has the supplier customer system relationship. The more complex the relationship, the been on more important the need for correct supply chain coordination. The models above SCM strive to optimize costs and profits by streamlining the supply chain system. The performance, more global the supplier customer system relationship becomes, the more important it Global will be to utilize predictive models in terms of supply chain coordination and Competition, collaboration. and/or the effectiveness of organizations In which Industries which have profited from supply chain coordination include advertising, industries is retailing, manufacturing, Customer Relationship Management, construction, this engineering, warehouse management, manufacturing, city/state/federal government, improvement chemical, pharmaceutical, food & beverage, paper, metal, life sciences, natural a popular or products, automotive, international trade, finance, and insurance related industries. effective tool or technology Bibliography 1) http://www.findarticles.com/p/articles/mi_qa3796/is_200404/ai_n9366598 2) http://www.findarticles.com/p/articles/mi_qa3796/is_200404/ai_n9366598 46
  • 47. Supply Chain Planning and Synchronization Solutions Definition and “Planning synchronization refers to the joint design and execution description Synchronization of plans for product introduction, forecasting and replenishment. In essence, planning synchronization defines what is to be done with the information that is shared; it is the mutual agreement among members as to specific actions based on that information. Hence, members in a supply chain may have their order fulfillment plans coordinated so that all replenishments are made to meet the same objective – the ultimate customer demands.” 1 http://www.sauder.ubc.ca/bcom/course_resources/comm442/docs/EbusandSCIntegration_H Lee.pdf. How it is used “Once supply chain members have agreed to share information, the next logical step is to agree on what to do with it. Planning synchronization points to the exchange of knowledge by the partners so that they can collaborate to create synchronized replenishment plans. Establishing ground rules on what to do with shared information and agreeing on critical actions up and down the supply chain can further mitigate problems such as the bullwhip effect. It also goes a long way toward ensuring that all partners achieve full value from the integration exercise. Here, again, the Internet can play a key role. One such example is the Collaborative Planning, Forecasting and Replenishment (CPFR) initiative. In CPFR, both the buyer and the seller make use of the Internet to share forecasts, detect major variances, exchange ideas and collaborate to reconcile differences, so that eventually, both have a common forecast and replenishment plan.” 2 http://www.sauder.ubc.ca/bcom/course_resources/comm442/docs/EbusandSCIntegration_H Lee.pdf. What its “From Nuts to ‘Nets Both consumer and business-to-business companies can The significance Internet achieve the benefits of Internet-driven collaboration. Snack giant Delivers or impact has Nabisco successfully conducted a promising CPFR pilot with been on SCM grocery chain Wegmans. Due to smart promotions, Wegmans had seen an 11% performance, growth of snack nut sales versus a 9% decline at other retailers. By strategically Global sharing demand data and collaborating closely on promotions and replenishment, Competition, Nabisco saw its Planters sales jumped 40%, dramatically increasing its market share and/or the at Wegmans. Moreover, Nabisco’s warehouse fill rate increased from 93% to 97%, effectiveness while inventory dropped by 18%. Several other pilots are now under way at Schnuck of Markets, Kmart, Circuit City, P&G, Kimberly Clark, Sara Lee, and Wal-Mart. In the organizations business-to-business world, Adaptec, a fab-less semiconductor company, and Cisco Systems, the leading networking equipment vendor, are undertaking similar initiatives. The case of Adaptec illustrates the value of internet-based collaboration to a company faced with evolving supply processes, innovative products, and a geographically dispersed supply chain. Using a software application called Alliance (developed by Extricity, now part of Peregrine), the company communicates in real time with its design center in California, its foundry in Taiwan, and assembly plants in Japan, Hong Kong and Singapore, exchanging detailed and complex design drawings, prototype plans, test results, and production and shipment schedules. This greatly facilitates their ability to check demand and supply levels, and respond quickly to potential mismatch problems. It also helps shorten their new product 47
  • 48. development times. With the use of Alliance, Adaptec’s cycle time was cut by more than half.” http://www.sauder.ubc.ca/bcom/course_resources/comm442/docs/EbusandSCIntegration_H Lee.pdf. In which “IP and Knowledge Other new companies have emerged to support new product industries is Sharing designs and new product introduction through collaboration and sharing of this intellectual properties. One example is SpinCircuit in the electronics industry. By improvement creating a Universal Data Network for design data such as EDA CAD libraries, a popular or MUP/ERP and PDM, approved vendor lists, and design data sheets, design effective tool engineers and manufacturing engineers can collaborate to speed up the design and or technology introduction process. The Internet has thus played a key role in supporting companies to “design for supply chain management.” The Internet is also enabling innovative ways to leverage knowledge capital critical to the design process.” http://www.sauder.ubc.ca/bcom/course_resources/comm442/docs/EbusandSCIntegration_H Lee.pdf. http://www.sauder.ubc.ca/bcom/course_resources/comm442/docs/EbusandSCIntegration_H Lee.pdf. Bibliography 48
  • 49. Supply Chain Simulation and Optimization Software (D) Definition “Supply Chain Optimization is the application of processes and tools to ensure the and optimal operation of a manufacturing and distribution supply chain. This includes the description optimal placement of inventory within the supply chain, minimizing operating costs (including manufacturing costs, transportation costs, and distribution costs). This often involves the application of mathematical modeling techniques using computer software.” 1 (http://en.wikipedia.org/wiki/Supply_chain_optimization) Supply Chain Simulation Software is a software system developed for businesses to use in planning and executing supply chain functions; it is used to “visualize a business process” How it is Supply Chain Optimization software is used by supply chain managers, who are used trying to maximize the profitable operation of their manufacturing and distribution supply chain Supply Chain Simulation Software is used to model, simulate, and visualize a business process, whether manufacturing, material handling, logistics or administration. FlexSim Simulation Software is one such PC-based simulation software application.2 (http://www.mfgeng.com/sim.htm). It is used for manufacturing, logistics, material handling, container shipping, warehousing, distribution, mining, supply chain http://www.lionhrtpub.com/orms/surveys/Simulation/Simulation1.html provides a list of several simulation software packages for business and manufacturing. 3 What its Increased efficiencies and cost savings; fewer errors/improved quality; improved significance service; predictability and forecasting improvement or impact has been on SCM performance, Global Competition, and/or the effectiveness of organizations In which Manufacturing; construction; service industries; trade; government; transportation and industries is utilities this improvement a popular or effective tool or 49
  • 50. technology Bibliography 1 http://en.wikipedia.org/wiki/Supply_chain_optimization 2 http://www.mfgeng.com/sim.htm 3 http://www.lionhrtpub.com/orms/surveys/Simulation/Simulation1.html 50
  • 51. Trade Facilitation Definition and “Trade Facilitation is often defined as "the simplification and harmonization description of international trade procedures" with trade procedures being the "activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade". This definition relates to a wide range of activities such as import and export procedures (e.g. customs or licensing procedures); transport formalities; and payments, insurance, and other financial requirements. Work in the area has been carried out by organizations such as UNCTAD, UN ECE or the WCO for several decades.” 1 http://www.wto.org/english/thewto_e/whatis_e/eol/e/wto02/wto2_69.h tm#note2 “Also defined as: streamlining customs and business regulation to give poor countries better access to the markets of Europe, the US, and Japan” How it is used Occasionally, the term is extended to address a wider agenda in economic development and trade and may include: improvement of transport infrastructure, removal of government corruption, reduction of customs tariffs, removal of inverted tariffs, removal of non-tariff trade barriers, and export marketing and promotion.” 2 http://en.wikipedia.org/wiki/Trade_facilitation What its significance “It can be done: the European Commission, a voluble supporter of aid-for-trade, says or impact has the port of Casablanca cut its container processing time from 18-20 days in 1996 to been on SCM performance, a few hours now. And the benefits can be huge. A study by the Asia-Pacific Global Economic Co-operation group of Pacific rim countries suggested a comprehensive Competition, and/or the trade facilitation programme was twice as effective as cuts in tariffs for increasing effectiveness of trade.” organizations 3 http://neweconomist.blogs.com/new_economist/2006/04/trade_facilitat.ht ml In which “As the first generation of trade reforms, consisting mainly of easing of industries is border restrictions to merchandize trade and liberalization of foreign this exchange markets, have been or are being implemented by the majority of improvement developing countries, it is becoming obvious that their successful integration a popular or into the world economy increasingly depends on the realization of a series of effective tool complex, behind-border measures that fall under the heading of trade 51
  • 52. or technology facilitation.” 4 http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/TRADE/0,,cont entMDK:20550369~menuPK:261317~pagePK:148956~piPK:216618~theSiteP K:239071,00.html Bibliography 1 http://www.wto.org/english/thewto_e/whatis_e/eol/e/wto02/wto2_69.h tm#note2 2 http://en.wikipedia.org/wiki/Trade_facilitation 3 http://neweconomist.blogs.com/new_economist/2006/04/trade_facilitat.ht ml 4 http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/TRADE/0,,cont entMDK:20550369~menuPK:261317~pagePK:148956~piPK:216618~theSiteP K:239071,00.html 52
  • 53. Web-Based ERP Systems Definition “(Enterprise Resource Planning) An integrated information system that serves all and departments within an enterprise. Evolving out of the manufacturing industry, ERP description implies the use of packaged software rather than proprietary software written by or for one customer. ERP modules may be able to interface with an organization's own software with varying degrees of effort, and, depending on the software, ERP modules may be alterable via the vendor's proprietary tools as well as proprietary or standard programming languages.” 1 How it is “An ERP system can include software for manufacturing, order entry, accounts used receivable and payable, general ledger, purchasing, warehousing, transportation and human resources. The major ERP vendors are SAP, PeopleSoft, Oracle, Baan and J.D. Edwards. Lawson Software specializes in back-end processing that integrates with another vendor's manufacturing system. See CRM, sales force automation, supply chain management and NRP.” 2 What its Advantages significance or impact has “In the absence of an ERP system, a large manufacturer may find itself with many been on software applications that do not talk to each other and do not effectively interface. SCM Tasks that need to interface with one another may involve: performance, Global • design engineering (how best to make the product) Competition, • order tracking from acceptance through fulfillment and/or the • the revenue cycle from invoice through cash receipt effectiveness • managing interdependencies of complex Bill of Materials of • tracking the 3-way match between Purchase orders (what was ordered), organizations Inventory receipts (what arrived), and Costing (what the vendor invoiced) • the Accounting for all of these tasks, tracking the Revenue, Cost and Profit on a granular level. Change how a product is made, in the engineering details, and that is how it will now be made. Effective dates can be used to control when the switch over will occur from an old version to the next one, both the date that some ingredients go into effect, and date that some are discontinued. Part of the change can include labeling to identify version numbers. Computer security is included within an ERP to protect against both outsider crime, such as industrial espionage, and insider crime, such as embezzlement. A data tampering scenario might involve a terrorist altering a Bill of Materials so as to put poison in food products, or other sabotage. ERP security helps to prevent abuse as well.” (3) Disadvantages “Many problems organizations have with ERP systems are due to inadequate investment in ongoing training for involved personnel, including those implementing 53
  • 54. and testing changes, as well as a lack of corporate policy protecting the integrity of the data in the ERP systems and how it is used. Limitations of ERP include: • Success depends on the skill and experience of the workforce, including training about how to make the system work correctly. Many companies cut costs by cutting training budgets. Privately owned small enterprises are often undercapitalized, meaning their ERP system is often operated by personnel with inadequate education in ERP in general, such as APICS foundations, and in the particular ERP vendor package being used. • Personnel turnover; companies can employ new managers lacking education in the company's ERP system, proposing changes in business practices that are out of synchronization with the best utilization of the company's selected ERP. • Customization of the ERP software is limited. Some customization may involve changing of the ERP software structure which is usually not allowed. • Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage. • ERP systems can be very expensive to install. • ERP vendors can charge sums of money for annual license renewal that is unrelated to the size of the company using the ERP or its profitability. • Technical support personnel often give replies to callers that are inappropriate for the caller's corporate structure. Computer security concerns arise, for example when telling a non-programmer how to change a database on the fly, at a company that requires an audit trail of changes so as to meet some regulatory standards. • ERPs are often seen as too rigid and too difficult to adapt to the specific workflow and business process of some companies - this is cited as one of the main causes of their failure. • Systems can be difficult to use. • The system can suffer from the "weakest link" problem - an inefficiency in one department or at one of the partners may affect other participants. • Many of the integrated links need high accuracy in other applications to work effectively. A company can achieve minimum standards, then over time "dirty data" will reduce the reliability of some applications. • Once a system is established, switching costs are very high for any one of the partners (reducing flexibility and strategic control at the corporate level). • The blurring of company boundaries can cause problems in accountability, lines of responsibility, and employee morale. • Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software. • There are frequent compatibility problems with the various legacy systems of the partners. • The system may be over-engineered relative to the actual needs of the 54
  • 55. customer. “ (4) Results from ERP projects have been mixed. In a Robbins-Gioia 2001 survey, over 51% of customers viewed their ERP implementation as unsuccessful. The same report references a 2001 Conference Board survey in which customers identified 40% of the ERP implementations as failing to deliver their objectives within one year of going live. (5) While there is no doubt that many organizations have experienced signficant benefits from the implementation of ERPs, success data is limited to marketing and advertising propaganda while studies are routinely conducted by universities, consulting firms, the Gartner Group, the Standish Group, and others regarding the failure rate of ERPs. What appears to be the core issue of failed web-based ERP initiatives is the lack of understanding and commitment by the organizations’ executives In which Web Based ERP solutions can be found in the construction, engineering, warehouse industries is management, manufacturing, city/state/federal government, chemical, this pharmaceutical, food & beverage, paper, metal, life sciences, natural products, improvement finance, and insurance related industries. a popular or effective tool or technology Bibliography 1) http://www.answers.com/topic/enterprise-resource-planning 2) http://www.answers.com/topic/enterprise-resource-planning 3) http://en.wikipedia.org/wiki/Enterprise_resource_planning 4) http://en.wikipedia.org/wiki/Enterprise_resource_planning 5) http://www.it-cortex.com/Stat_Failure_Rate.htm 55
  • 56. World Wide Web – Internet (WWW) Definition and The World Wide Web ("WWW" or simply the "Web") is a global, read-write description information space. All the resources and users on the Internet that are using the Hypertext Transfer Protocol (HTTP) form the World Wide Web. Text documents, images, multimedia and many other items of information, referred to as resources, are identified by short, unique, global identifiers called Uniform Resource Identifiers (URIs) so that each can be found, accessed and cross referenced in the simplest possible way. The term is often mistakenly used as a synonym for the Internet itself, but the Web is actually something that is available via the Internet, just like e-mail and many other Internet services. How it is used The Internet is a startling global network of connected servers. A few key technological principles of simplicity, extensibility, and well-defined interfaces have enabled easy online connectivity to computers anywhere in the world. The Web began as a standard interface to allow document sharing over the Internet. It's true that this document-oriented Web page approach to information sharing doesn't lend itself naturally to interactive user interfaces for business software. But the ability to provide easy access to business functionality to anyone anywhere in the world with an Internet connected PC and a free or built-in Web browser is staggeringly compelling. What its The Internet technologies have enabled the following: significance or impact has Collaboration been on SCM performance, The key to understanding the future impact of the Internet on business is to realize Global that e-commerce tends to refer to the buying and selling, transaction-making Competition, activities of business. But obviously people engaged in business do many varied and and/or the complex things beyond the sheer acts of buying and selling. There are large effectiveness supporting areas of operations in any non-trivial enterprise that have historically of grown to rely on business software for the efficiency, automation, and analytical organizations power computers offer. Enterprise Resource Planning, Supply Chain Management, and Customer Relationship Management are among the large, well known categories of software applications that attempt to address key operational needs of businesses. One emerging way to think of these business activities is in terms of collaboration. ERP promotes collaboration between key back-office departments and functions to run the core operational elements of a business. SCM aims to optimize collaboration with and among a company's various suppliers. CRM seeks to enhance collaboration with a company's customers in the sales and support contexts. The use of Internet- based technology that promotes collaboration in business has come to be called collaborative commerce’. It cuts across the lines of traditional ERP, SCM and CRM, and adds a new dimension as well. Collaborative commerce suggests an entire new domain of applications that becomes possible with the help of Internet technology. Collaborative Commerce 56
  • 57. With its ubiquitous availability, low entry-barrier, standard interface, loose coupling, and security infrastructure, the Web promises to be the ideal technology platform for software-based business collaboration. E-business as a concept is being redefined to include not just transaction making, but other collaborative activities that leverage the Web as well. Let's take order tracking as an example: Providing a customer with ready and accurate order status for an order that comprises many complex steps of fulfillment is a big value-added service many businesses strive to offer their customers. Often whole departments of workers may be involved. Offering customers Web-browser (and perhaps Web-service) visibility to their order status is an ideal interface. Accurately supplying the status of a complex process might require several internal applications interacting with each other. Web service interfaces provide the ideal model. Fulfilling the order may require complex collaboration with other enterprises. Employees from other enterprises may need to directly participate via Web-browsers, and/or their applications may need to talk to internal applications via Web services. All this internet-based collaboration ultimately delivers the service to the customer in an optimal and efficient manner. In which The internet technology has proliferated into all the businesses. It has created some industries is niche internet based businesses in retailing such as Amazon and some auction based this businesses such as eBay. Most of the retailers such as a book seller, Barnes and improvement Noble, home improvement retailers such as Home Depot and Lowes have invested a popular or heavily in these technologies. The Financial industry has also invested heavily in effective tool these technologies to enable internet banking and Stock trading. or technology Bibliography http://en.wikipedia.org/wiki/World_Wide_Web http://www.acm.org/ubiquity/views/s_kownslar_1.html 57