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  • 1. 1998 NSF WORKSHOP ON SUPPLY CHAIN MANAGEMENT IN ELECTRONIC COMMERCE FINAL REPORT Prepared by Sherman Bai Department of Industrial and Systems Engineering University of Florida Gainesville, FL 32611 TEL: (352) 392-7152 FAX: (352) 392-3537 April 2, 1999
  • 2. Table of Contents 0. Executive Summary------------------------------------------------------------- 3 1. The Workshop ------------------------------------------------------------------ 4 2. Major points of presentations-------------------------------------------------- 4 3. The important issues identified------------------------------------------------ 7 4. Enabling Technologies--------------------------------------------------------- 9 5. Recommendations to NSF for future Research Agenda------------------- 12 2
  • 3. EXECUTIVE SUMMARY This is the final report of the 1998 NSF Workshop on Supply Chain Management in Electronic Commerce (eCommerce) held at the University of Florida in October 1998. Many leading academic researchers and industry practitioners attended the workshop. The major objective of the workshop was to identify the research topics that have high potential impact and to make recommendations to NSF regarding future research directions. Based on the inputs from the workshop participants through technical presentations and panel discussions, we identified the following research areas that would lead to significant improvement in supply chain management and eCommerce: • Complexity engineering in manufacturing logistics, supply chain management and eCommerce • Industry standards for eCommerce and supply chain management • Plug-and-play technology and supply web infrastructure • Distributed decision making for supply chain management and eCommerce • Predictive models of supply chain operations and eCommerce • Social and economical behavior of eCommerce • A Web-based test bed for eCommerce and supply chain technologies 3
  • 4. 1. THE WORKSHOP The 1998 NSF Workshop on Supply Chain Management in Electronic Commerce was hosted by the Department of Industrial and Systems Engineering of the University of Florida, at the Holiday Inn University Center Hotel in Gainesville, Florida, from October 19 to 21, 1998. There were 70 participants from industry and academia, who are representatives of many companies and institutions including Intel, GE, IBM, Lucent Technologies, Chrysler, Andersen Consulting, Ernst & Young, DLA, MIT, Duke University, University of Michigan, Northwestern University, Stanford University, University of Rochester, University of Toronto, Cornell University, etc. Twenty-three speakers gave technical presentations and took part in panel discussions (see the next section for the major points of presentations). From the National Science Foundation, Dr. Larry Seiford, Director of the Production Systems and Operations Research Program, and Dr. Louis Martin-Vega, Director of the Division of Design, Manufacturing and Industrial Innovations (DMII), attended the workshop. The workshop objectives included (1) establishing a dialogue among industry, academia, and government funding agencies on the subject of supply chain management and eCommerce; (2) collecting expert inputs from industry and academia on future research directions in the area; (3) identifying issues which may generate high impact on the practice of supply chain management and eCommerce; and (4) setting an agenda for future academic research on high impact topics. 2. MAJOR POINTS OF PRESENTATIONS In this section, we list the major points made by the speakers in their presentations at the workshop. The transparencies of the presentations may be found at the workshop web site: 1. John Birchak, Intel Corporation, “Supply Chain Management Challenges at Intel Corporation”  Complexity of supply chain organizations in eCommerce is evolving in an organic fashion. Visibility and stability of supply chain operations are critical. Visibility reduces risks and uncertainty.  Standards of business documentations and procedures are needed for the development of eCommerce and supply chain technologies.  Predictive models will be very helpful for the analysis and evaluation of supply chain and eCommerce operations. 2. Eric Lien, GE Information Services, "The eCommerce Evolution of Supplier & Trading Partner Relationships"  Globalization of supply chain operations is a key characteristic of eCommerce transactions.  Using gateway technology to integrate legacy systems is a fundamental building block for the open trading partner network for eCommerce. 4
  • 5.  Many companies have adopted a communication infrastructure of three levels: intranet, extranet, and Internet. Intranet handles the communication within a company; Extranet is for the information sharing among business partners; and Internet is for end customers and the information sharing with the general public.  Complexity of supply chain operations is a challenge to effective management. Internet connectivity and new business models could help alleviate the difficulty. 3. Phillip Church, Defense Logistics Agency (DLA), DoD, “Supply Chain Integration With Emerging Technology”  Supply chain integration for DoD procurements have reduced costs and improved efficiency.  Forming business alliances with prime vendors streamlined the DoD supply channels.  Electronic transactions using the Electronic Mall have significantly improved the flexibility and efficiency of the DoD supply chain operations. 4. Werner Graf and Ram Viswanathan, Ernst & Young, “Supply Chain Collaboration on Internet”  Complexity of supply chain operations makes the collaboration among business partners very difficult.  Integration of supply chain management systems and coordination of supply chain collaborations on Internet are fundamental technologies for the future supply chain operations in eCommerce. 5. J. Marty Tenenbaum, VeoSystems, “From Supply Chains to Supply Webs: Building Open Trading Partner Networks”  Complexity of supply operations in many industries makes the supply chain structure impractical.  Supply web structure and Plug-and-Play technology allow business-trading partnership to emerge and dissolve dynamically with maximum flexibility and minimum overhead.  Common Business Library allows business and customer alike to publish their products, services and requests dynamically.  Open trading partner networks should be based on the plug-and-play technology and supply web infrastructure. 6. Stanley Su, University of Florida, “Information Infrastructure for Supply Chain Management”.  Supply chain management in eCommerce is extremely complex from the software technology point of view.  Plug and play technology is essential for Internet connectivity for eCommerce.  Rule-based distributed decision making allows flexible implementation of business decision procedures.  Supply chain integration in eCommerce is the key technology and it has a long way to go before it becomes commercially available. 7. Ken Janoski, Andersen Consulting, “Global Supply Chain Management Through eCommerce”  Supply chain integration benefits all business partners in a supply channel.  Web-based systems allow real-time information sharing and distributed decision making. 5
  • 6. 8. Gary Sullivan, IBM, “Global supply chain management and internetworking.”  PROFIT -- the implementation of supply chain integration for IBM Semiconductor manufacturing – has significantly improved the responsiveness, flexibility and efficiency of the supply chain operations.  Global supply chain synchronization and optimization could significantly improve the efficiency of supply chain operations. 9. John Kay, Chrysler Corporation, “Coordination of Supply chains.”  AIAG – a supply chain management initiative of the automotive industry – has helped in understanding of supply chain relationship and the establishment of the standards of supply practice in the automotive industry.  Chrysler’s practice of supply chain coordination has generated impact on the responsiveness and flexibility of its supply operations.  A fundamental understanding of supply chain relationships: Do not control supply chain, but collaborate along supply chain. 10. Robert Young, North Carolina State University, “Global Virtual Production Planning for Transmission Production at Ford.”  Implementation of virtual enterprise concept for Ford global manufacturing has improved the flexibility of production flows and the utilization of production capacity.  Development of information technology system has proven to be crucial for global virtual production network.  Implementation of fuzzy constraint network technology allows production managers to make distributed local decisions by selecting among a small number of feasible solutions. 11. Mark Fox, University of Toronto, “Managing the Dynamics of the Supply Chain: An Artificial Intelligence Perspective.”  Agent technology is developed for distributed decision making. Such capability of local decisions is important for mitigating the complexity of supply chain management and eCommerce.  Machine negotiation and automated auction could improve the efficiency of supply chain coordination in eCommerce. 12. Anna Thornton, MIT, “Variation Risk Management in the Extended Enterprise.”  Quality assurance plays an important role in supply chain coordination. Using the Internet for sharing information of product quality could improve the responsiveness to quality problems in design, manufacturing and customer services.  Coordination of product quality along supply chains should receive more attention in the age of eCommerce. 13. Phil Lederer, University of Rochester, “Pricing and Supply Chain Management in eCommerce.”  Economic factors that drive supply chain development include reduced IS costs, operations efficiency and new contract forms.  Agent problems for distributed decisions in supply chain management appear to be a promising area of research.  Pricing and segmentation strategies are important for enterprises engaging in eCommerce. 6
  • 7. 14. Abhijit Deshmukh, University of Massachusetts, “Intelligent Agents for Supply Chain Coordination.”  On-line bidding and automated auction have become more accepted by consumers in eCommerce.  Supply chain agent and cooperative negotiation are technologies that apply the principles of bidding and auction to generate distributed solutions for supply chain management in eCommerce. 15. Maureen Lojo, Cornell University, “Electronic Exchange of Equipment Performance Data in Semiconductor Manufacturing."  A study of supply chains for semiconductor equipment reveals that sharing equipment performance data could improve the efficiency of production systems along supply chains.  Technology link in supply chain operations affects product quality and production system performance. 16. Paul Zipkin, Duke University, “Inventory Theory and Supply Chain Management.”  Evaluation of alternative supply operation structures should receive more attention from researchers.  Analytical models are needed for the evaluation of contracts, information, controls, stock positioning, returns, incentives, pricing, collaboration, trust, etc.  Integration of supply chain management with ERP systems will determine the usefulness of the research results in this area. 17. Robert Savit, University of Michigan, “Agent Based Models of Supply Chains.”  Supply chain operations have distributed systems and nonlinear dynamics.  A study of agent based models with adaptive decision making demonstrates that supply chain operations may have chaotic behavior. 18. Stanley Gershwin, MIT, “Complex Production Systems Analysis and Control by Decomposition Methods.”  Complexity is a difficult issue in studying manufacturing systems and supply chain problems.  A study at Boeing demonstrated that decomposition methods are effective for production flow control in complex manufacturing systems. 19. David Simchi-Levi, Northwestern University, “Coordinating Production, Distribution and Transportation Decisions in the Supply Chain.”  The Bullwhip Effect in supply chain operations could be mitigated by careful coordination and information sharing.  Distribution strategies and information systems are necessary components for complex supply operations. 20. Grace Lin, IBM, “Modeling and Analysis of IBM Supply Chains.”  IBM PC supply operation is complex, which could be characterized by the large product varieties, complex supply systems and delicate supply relationships.  Information overload and information sharing and protection are important issues to address in supply chain management and eCommerce.  Accuracy Forecasting techniques and intelligent decision methodology are needed to be able to provide detailed information at the right time to the right place. 21. Jin Wang, Auburn University, “Coordination of Batch Demand Supply Chains.” 7
  • 8.  Stochastic queuing models are used to analyze supply chains operations with quality inspections and finite number of reentries. 22. Van Parunak, ERIM, “Supply Chain Engineering as a Source of Research Topics.”  There is a tradeoff between firm performance and supply chain performance. It is important to establish a positive correlation between these two measurements.  It is important to realize that supply chains need to be designed and reengineered in order to improve their performance. Techniques are needed to diagnose problems along supply chains. 23. Michael Caramanis, Boston University, “Distributed production control technology.”  Distributed production flow control strategy is an area of research that appears to be effective in complex manufacturing systems. 3. THE IMPORTANT ISSUES IDENTIFIED During the workshop, the panels discussed many potential road-blocks and technical challenges in Supply Chain Management and eCommerce. They are summarized in the following. • Complexity. In order to efficiently deliver products and services via eCommerce, companies need to reengineer their supply operations to meet the requirement of speed and flexibility of eBusiness. To improve the responsiveness of the supply operations, it is important to have the integration from last tier suppliers to the end customers. Such an integration or coordination will result in managing a tremendous system which includes customers, customer’s customers, suppliers, supplier’s suppliers, segmentation, communication, information, productions, inventories, transportations, qualities, prices, partnerships, and interdependencies. All these elements are coupled with shorter and shorter lead times. The complexity of the supply chain management problems is the ultimate challenge. Complexity increases risks and inefficiencies. Complexity decreases responsiveness and stability. The complexity of supply chains and the changing nature of eCommerce are outstripping human ability to assimilate and react. The complexity of supply chains severely decreases the visibility within and between enterprises. The lack of visibility increases risk, cost, and time. More computing power by itself will not solve the problems. New business models and technologies are needed to help assimilate, simplify and manage supply chain complexity. • Data overload and Information Starvation. The number of Web sites on Internet is increasing with exponential speed. If we want to find any information on the Internet today, we need to use one of the keyword-based search engines. Keyword search worked well when there were hundreds or thousands of Web-pages on the Internet. But now there are more than five hundred million pages on the Internet, not including dynamically created pages. So, keyword search does not work. Imagine that search engines give us 100,000 hits and we have go through all those pages manually. We should realize that the contents of the Web-pages are data. Some of the data become useful information to us only when they match with our information needs. 8
  • 9. The useful information is buried deeply in the data mines today and becoming more and more difficult to find. • Lack of industry standards. In order to improve the efficiency of supply chains, information must be shared across companies’ boundaries. In order to automate Internet transactions, computers must understand data content. In order to facilitate such “inter-enterprise” and “machine-to-machine” business transactions, it is necessary to establish business infrastructures and technical standards. Today, the lack of such infrastructures and standards has severely hindered the efficiency of business transactions in eCommerce. • Legacy systems and interoperability. Most companies, if not all, have existing software systems for different business functions, which may have evolved over many years based on subsystems developed in house or from different vendors. They may require different operating systems, different data formats and different communication protocols. In order to share information along a supply chain, these legacy systems must be integrated in some way for them to talk to each other and to communicate with the outside world. In recent years, a tremendous amount of effort has been put into developing new computer and communication technologies. Many industry alliances and consortia have been formed within different industries to develop industry specific solutions, which may implement particular data types and require specific communication protocols. In supply chain management and eCommerce, the solution technologies from different industries must be effective in sharing information. • Lack of predictive models of supply chains and eCommerce. The lack of predictive models to analyze supply chains and eCommerce might be the reason for the low visibility and chaotic situations in supply operations of many industries today. New models are needed to help with the development of new generation of supply chain and eCommerce technologies. Currently, most development in this area is done by trial and error. If the models are too simple, they cannot be practically applied. If the models are too complex, few people will understand them. Important attributes of models need to be understood by most people involved in supply chain management and eCommerce. • Lack of automation of eCommerce transactions. Today, the form of communication on the web is primarily machine-to-human. That is, most of the web pages are designed to be viewed by a person. The computer can help with locating web sites by keyword search, but it does not understand the content of the web pages. As a result, most of the eCommerce transactions require manual inputs from human operators or consumers. Such manual manipulation severely impedes the effectiveness of eCommerce transactions • Lack of intellectual property protection and knowledge management. Many companies are still reluctant to share technical information with business partners. One of the reasons is the lack of a mechanism to value the intellectual property and 9
  • 10. the lack of incentive structure to encourage such information sharing. In order to encourage business partners along supply chains to share business information and knowledge, standardized accounting procedures are needed for valuing intellectual property. Better methods are needed for capturing and reusing knowledge through information sharing. 4. ENABLING TECHNOLOGIES In order to remove the roadblocks to further advance the technologies of supply chain management and eCommerce, the following enabling technologies are needed. • Industry standards of business documentation. Business communication is based on mutually understandable business languages. In order to make such business languages universally understandable, we need to standardize the format of purchasing orders, payment methods, catalog information, marketing information, technical specifications of products, catalog search interface, price check interface, etc. Such standardization is the foundation of business process automation and the integration of eCommerce processes. The eCommerce technical standards include:  Product content standards – standardizing catalog information, marketing information, technical specifications of products, and content transport mechanisms.  Business content standards – standardizing the general business profile and the detailed business profile.  Logistics standards – standardizing product distribution information, spare parts requests, shipment tracking interfaces, order status inquiry interfaces, and forecasting information.  General framework standards – standardizing interchange formats, standards notation, and content use.  Sales and marketing standards – standardizing catalog search interface, availability look-up interfaces, price check interfaces, credit availability interfaces, manufacturer authorization, order interfaces, promotion locator interfaces, sales-out, sales-in information format, manufacturer demo/NFR request, price protection, promotion rules, and product change notifications.  Customer service standards – standardizing RMA interface and flow, credit interface and flow, and warranty interface and flow. • Computer-to-computer integration and Internet transaction automation. Making all the content on the Web accessible and understandable to computers, as well as people, is the fundamental step toward eCommerce automation. There is also a need for standardized computer languages to implement business documents so that computers can understand them. The web systems could then be integrated in such a way that content-specific search, rather than keyword-search, could be implemented. Then, computerized agents have something to look for and comparison-shopping can be realized. Internet transaction automation requires also transaction protocols, data mapping and integration, runtime processors and connections to enterprise systems. 10
  • 11. • Plug & play commerce and open trading partner networks. The real opportunity in eCommerce is to create new business models based on the computer-to-computer integration over the Web. Using eCommerce standards, each company could publish its products and services on the Internet. It could form business partnership in a plug- and-play fashion with other companies using the same standards on the Web. The business alliances are in the form of open trading partner networks -- each company may participate in many business alliances simultaneously. Such business alliances may merge and dissolve dynamically according to market condition changes. As a result of plug-and-play technology, the components of web systems are reusable at the level of whole company processes. • Distributed decision making. The supply chains and Internet trading partnerships consist of many loosely connected companies and consumers. Different companies and consumers may have different objectives and constraints. Business decisions are made collectively by many decision-makers through different forms of negotiations and compromises. No one will be in a position to enforce central control. New analytical models and technologies are needed to facilitate the distributed decision making process. Effort should be made in the development of agent technology, negotiation protocols, distributed database, and distributed web computing. There is also a need for information system architecture where functions are distributed across a network environment in response to dynamic market changes. • Modularity, integrability and scalability. Due to the complexity of the supply chain and eCommerce systems, the solution technologies have to be modularized, integrable and scalable. Subsystem modules may be developed for separate business functions and then be integrated into an overall system in a plug-and-play fashion. The eCommerce technologies need to be scalable to be suitable to enterprises of different sizes and in different industries. • Agent technology and machine negotiation. Agent-based technologies and systems offer a potential solution for complex supply network coordination. An important advantage is the reduction of repetitive tasks and automation of business processes. Software agents may enable a computer system to negotiate business deals with other systems equipped with similar software agents. The agents adapt human characteristics that are able to coordinate the decisions with other agents, quickly responding to changes in the marketplace. • Knowledge extraction and sharing. Each company in the supply chain has its own proprietary information, business knowledge, and technical expertise. Technology for exchanging technical data and sharing knowledge along supply chains should be given high priority in research and development. This will help companies to discover knowledge from commercial data and share their experiences about the business environment with their business partners. 11
  • 12. • Organizational structure of supply operations: chain, network, or web. The traditional structure of a supply chain has many stages from suppliers, to manufacturers, to distribution centers, and then to retailers. Supply chain communication was traditionally based on one-to-one interfaces between business partners. The many-to-many communication and plug-and-play technology on the Internet will allow the development of a supply web where the supply relationship could be much more dynamic and flexible. • Levels of information sharing: Intranet, Extranet and Internet. Many companies have adopted an information system infrastructure of three layers to support eCommerce. The first is the Intranet which handles the communication tasks within the enterprise, including electronic messaging, workgroup collaboration, process automation, and browser-based applications. The business benefits of the Intranet include reduced time-to-market, lower costs, enhanced quality and competitive advantage in marketplace. The second layer is the Extranet, which handles the communication tasks with business partners. The technology drivers of the Extranet include Internet-based EDI, secure network access and legacy system integration. The benefits of the Extranet include better-managed supply chains, tightened partner integration, and quick response to changing market conditions. The third element is the Internet, which handles the communication with the end customers. The technology requirement includes electronic catalog, content management, secure payment, and robust servers and databases. The benefits of the Internet include increased revenue, expanded market share, development of new markets, and improved customer services. • Economics of eCommerce. In order to be able to evaluate the impact of eCommerce to the world economy, research in the economics of eCommerce should receive more attention from researchers. With the amazing development of Internet and eCommerce, it seems reasonable to expect that such research evolve as a new branch of economics. • Analytical models of supply operations. New models are needed to help assimilate, simplify, and manage supply chain complexity. Supply chains consist of heterogeneous sets of agents (decision-makers), each acting on the basis of incomplete information. Motivations of collaboration are usually local, that is, maximizing local profit or local efficiency. Efficiencies of other elements of the supply chain are typically discounted. Supply chains are dynamic and agents are adaptive – they change behavior when condition changes. There are inherent nonlinearities and feedback effects in dynamics and structure of supply chain. There is an urgent need for methods of modeling and analysis that are appropriate to nonlinear, dynamic and adaptive systems. Analytical models are needed for coordination of production, inventory, quality, technology, economics, distribution, warehouses, routing, information sharing, and integration. • Supply chain design and engineering. Most of today’s supply chains are not designed but self-evolved over time. With the plug-and-play technology and industry 12
  • 13. standards of eCommerce, supply chains may be designed or engineered in the future to develop better visibility of risk, capacity, flow, timing, integration, costs and bottlenecks. Better visibility is needed in all stages of supplier and customer relationships. Better methods are needed for identifying constraints. 5. RECOMMENDATIONS FOR FUTURE RESEARCH AGENDA Electronic Commerce is part of an evolving environment in business that could eventually involve the application of information and communication technologies to an enormous range of production and distribution processes on a global scale. Although many characteristics of eCommerce are only beginning to become clear, it is expected that it will grow very quickly and that its effects on society as a whole will be dramatic. As a matter of urgency, therefore, public and private sector institutions must reevaluate the technological and social environment in which eCommerce takes place. Some of the important questions include the following. What should or could academic researchers do to help in the development of new technologies in supply chain management and eCommerce? How can government-funding agencies facilitate the research and development efforts in the area? What is the agenda for future academic research in the area? To focus on answering such questions, we summarize our view of the fundamental characteristics of research efforts that are likely to be successful and we identify those areas of highest potential impact. 5.1. RESEARCH CHARACTERISTICS Government agencies have traditionally been the major sources of funding for high-risk and long-term fundamental research. Many modern technologies that have generated significant economic and social impacts were direct results of government funded research and development projects. Examples include the Internet and the Internet-II. It is important for Government agencies to continue playing the role of fostering fundamental research. The successful research and development projects in this area should have one or more of the following characteristics: • Collaborative efforts involving academics and industry. In order to improve the chances of success, research and development activities in the area should be collaborative efforts that involve both academics and industry. • Cross-industry solutions. In recent years, there have been many industry initiatives in the area of eCommerce and Supply Chain Management, such as SEITAI, RosettaNet, NIIIP, CIIMPLEX, QR, ECR, EFR, AIAG, PROFIT, etc. Most of the efforts are focusing on problems within a particular industry and often lead to industry-specific solutions. Government-funding agencies can play an important role in facilitating research and development projects that have the potential of generating social and economical impact in a broader area – crossing multiple industries. 13
  • 14. • Multi-disciplinary task forces focusing on high impact topics. Most of the research topics that have potential high impact deal with problems of complexity, touching upon many aspects and areas of business processes and involving many enterprises with individual interests. It is very unlikely that problems with such complexity could be resolved by individual and uncorrelated efforts. Rather, they call for team efforts with inputs and resources from government agencies, industry and academia and expertise in many engineering and business disciplines. For example, an effort of developing standards in eCommerce may require expertise and inputs from engineering, accounting, information, ontology, computing, logistics, and management. In studying of consumer trust and confidence in eCommerce, it could be very helpful to bring together inputs from psychology, sociology, anthropology, and technology. 5.2. RESEARCH AREAS OF POTENTIAL HIGH IMPACT Based on the inputs from the workshop participants through the technical presentations and panel discussions, we identify the following areas of research topics that should lead to significant improvement in supply chain management and eCommerce. • Complexity engineering in manufacturing logistics, supply chain management and eCommerce. Systems involved in manufacturing logistics, supply chain management and eCommerce are usually complex. The future generation of eBusiness applications calls for further integration of those complex systems. As a result, the system complexity will be increased to a higher level. A fundamental issue is to bring the complexity under control. In doing so, new engineering technologies are needed in hardware and software development, communication protocols, decision making methods, analytical models, etc. Such new technologies should be developed concurrently in order to maximize the interoperability and scalability. • Industry standards for eCommerce and supply chain management. The standardization of business documentation and information exchange protocols is in urgent demand for the development and implementation of eCommerce and supply chain technologies. Industry should take a leading role in the development of infrastructures and standards for eCommerce. Government should regulate and facilitate to make sure that the infrastructures and proprietary standards resulting from industry initiatives do not become barriers to market entry. Academic research could facilitate the interoperability of the standards from different industry initiatives and the analysis of the social and economical benefits of such standards. • Plug-and-play technology and supply web. One of the major issues of supply chain management in eCommerce is the complexity and the dynamic changing nature of eCommerce. Some of the existing technologies such as EDI require a private interface between every pair of business partners in the supply chain. When the number of business partners in a supply alliance is large, building these subsystems of interface could be prohibitively expensive. In addition, such one-to-one connections 14
  • 15. create a rigid supply relationship that discourages competition and raises the barrier of entry. Plug-and-play technology will take advantage of the many-to-many communication of Internet so that each enterprise needs only to interface with the Internet and then will be able to communicate with all business partners through the Internet. Such a technology will allow the formation of supply webs that can be dynamically merged and reorganized. As a result, it will encourage competition and lower the barrier of entry in eCommerce. • Distributed decision making for supply chain management and eCommerce. In future eCommerce, each enterprise may instantaneously interact with a large number of online merchants and may simultaneously participate in many business alliances. As the market condition changes, the products and services and the supply relations of a company will change accordingly. In such a dynamic environment, participants of eCommerce, business and consumer alike, will make their own decisions separately and individually, with their own interests and objectives. The question is then how to derive overall market profitability and stability through the distributed individual decisions. A new generation of decision support technologies is needed so that each individual enterprise achieves its business objectives through the profitability and stability of the electronic marketplace. Due to the complexity of the problems in eCommerce and supply chain management, it would be extremely difficult to implement central control or global optimization of any kind. It seems reasonable to expect that effective solutions have modular structures. The relevant technologies may include distributed database and knowledge-base, distributed computing, and intelligent agents. • Predictive models of supply chain operations and eCommerce. The lack of techniques for predicting the benefits and the return on investment of industry initiatives in supply chain management and eCommerce is the major factor causing the delay of industry-wide participation in supply coordination and electronic business transactions. Analytical models are needed to analyze different business functions in supply chains and eCommerce, including production, inventory, quality, distribution, pricing, warranty, costing, services, information, etc. The complexity of such problems excludes the use of do-it-all models. It seems reasonable to have modularized models for separate business functions and an integration scheme to link these modules together. The effectiveness and interoperability of the models should be tested under real-world conditions. Such testing could be performed in real-world experimentation or in a computerized environment. • Social and economical behavior of eCommerce. The future social and economical impact of eCommerce to this country and to the world is not clear. So far, many predictions made based on intuition have been proven wrong. For example, several years ago, experts predicted that eCommerce would succeed in the form of electronic shopping mall and it turned out that most shopping malls on the Web had failed. Knowing that eCommerce will be a major component of the global economy, studying the social and economical behavior of eCommerce is a matter of urgency. 15
  • 16. Issues calling for research attention include, among others, taxation, productivity, stress of the digital world, and decline of the city in the information age. • A web-based test bed for eCommerce and supply chain technologies. Evaluation of the effectiveness of the technologies resulting from industry initiatives and academic research is a difficult task. The problem is that there are no existing facilities for testing solution technologies for extremely complex eCommerce and supply chain systems. In addition, the cost of evaluation and testing by way of real-world implementation could be prohibitively high. A possible solution is to develop a web-based environment for the evaluation and testing of solution technologies for eCommerce and Supply Chain Management. Such a system will have a plug-and-play infrastructure. Modularized subsystems could be linked together dynamically to emulate supply chain and eCommerce scenarios. These subsystems could be either real-world applications from participating companies, for instance, direct links to their ERP or MRP systems, or simulated scenarios based on real-world data from the participating companies. 16