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IS1105 Final Presentation
1. ICT and its
Role
in the Evolution of
Supply Chains in
the
Presentation By,
Music, Automobil
e and Banking
Tutorial Group 2, Team 03
Industries
Kang Jie Min
Thomas Lim Kuo Tao
Clement Low
3. Automobile
Automobile Supply Chain Before ICT
2100 50,000
Suppliers (Burt, Papers
1989)
One day in Ford
>1,000 >500
Accounts Payable
Phone calls Department (MCPLLC, 2008)
5. Automobile
Automobile Supply Chain After ICT
E-procurement
Exit Voice
Open B2B Marketplace Close Supplier Portal
(Covisint) (Toyotasupplier.com)
Less Better =
+ Educated More
6. Automobile
Automobile Supply Chain After ICT
Business Intelligence
Before After
• Lack of Proper • Allow executive levels to define Key
Performance Metrics Performance Indicators(KPIs)
• Delayed Business Reports • Better Visibility of the Supply Chain
process (HPDC,2010)
• Non-uniform analysis
capabilities across • Incentivise better suppliers with more
business users jobs (voice approach) (HPDC,2010)
• Fragmented and • Execute critical decisions in real time
inconsistent data with accurate information
• Unable to make critical
decisions in real time
7. Automobile
Automobile Supply Chain After ICT
Customer Centric Services
Warranty
Unpredictable and Inconsistent
Solution: Outsource
Happens unexpectedly & irregularly
(Cohen, N. Agrawal, & V. Agrawal, 2006)
• Suppliers can provide the additional
resources
• Suppliers can communicate directly via
social networks with buyer to highlight the
problem.
• Certain suppliers have expertise in
specialised systems. (E.g. Ford Sync) Ford Sync by Microsoft
8. Automobile
Summary of ICT’s Role in the Automobile Industry
E-procurement: Increase Supplier’s
interaction and efficiency
Business Intelligence: Introduce software
vendors as new form of suppliers, Allows for
better coordination between the
organisation and suppliers
Customer – Centric Services: Expand
Supplier’s scope into aftersales services
instead of just procurement
9. Banking
Software/Hardware vendors
These vendors provide
•Design or/and deployment of software solutions
•Procurement of hardware equipment
•Maintenance and upgrading of systems
•On-site recovery and assessment when systems becomes
unavailable
Examples
Oracle SAP Polaris
Citibank Bank of America DBS Bank
UBS Bank UBS Bank Commercial Bank
of Kuwait
HSBC Deutsche Postbank Saudi American
Bank
10. Banking
Software/Hardware vendors
bank
focus outsource to
core functions vendor
revenue and savings
usage
provides
supports
ict support
affected by
time
11. Banking
Financial regulatory institutions
These institutions provide
•Guidelines for the banking industry
•Important information and announcements
•Regulation of activities and imposing restrictions among banks
•ICT Services available to banks supporting daily functions
Examples
Bank Institution
Singapore Monetary Authority of Singapore
UK Financial Services Authority
Japan Financial Services Agency
Malaysia Securities Commission Malaysia
Hong Kong Securities and Futures Commission
12. Banking
Financial regulatory institutions
bank
institution
provides
bank
functions SWIFT
ict
CLS
savings
SWIFT (Society for Worldwide Interbank Financial Telecommunication): A
standard which banks can make domestic and international payment.
CLS (Continuous Linked Settlement): Eliminates time zone differences for
foreign exchange transactions.
13. Banking
The current state of banking industry
integrated and placed great reliance of its business processes
with ICT
resulting in
faster, efficient and accurate transactions
greater productivity
however
it is a single point of failure
14. Music
The Traditional Music Supply Chain
Singing Recording Advertising Shipping
• High Levels of Vertical Integration
• Linear Business Processes
• Little External Intervention
• Physical Goods/Entities Commonplace
Consumers Physical Products Physical Shops
15. Music
What the Internet did to the Music Industry
NET NEGATIVE
EFFECT
Digitized Supply Chain
Reduced
Market
Dominance
Amplified
Piracy
18. Music
The Digitally Evolved Music Industry
Independent Artistes
KINA
GRANNIS
Virtual Record Label:
• Packaging
• Distribution JUSTIN
BIEBER
• Artists & Repertoire
• Profit Sharing Scheme
19. Music
The Current State of The Music Industry
Outcomes of Digitization:
• New Business Models & Suppliers
• Lesser Intermediaries in the Supply Chain
• Record label firms have lesser Market Monopoly
Suppliers Unaffected by Digitization:
• Manufacturers of Music Equipment
• Publicity Providers (TV/Radio Stations)
22. References
1. Burt, D. N. (1989). "Managing Suppliers up to Speed." Harvard Business Review.
Vol. 67, No.5., pp.127-13
2. Management Consulting Partners LLC. (2008). “Applying Benchmarking to Higher
Education”
http://www.mcpartnersllc.com/download/Applying%20Benchmarking.pdf.
Retrieved 13 October 2011.
3. Hewlett-Packard Development Company. (2010). Bajaj Auto gains advantage
through HP analytics, decision support and business intelligence. Redwood
City, California: Hewlett-Packard Development Company.
Editor's Notes
First, we shall need to understand the organisation-supplier relationship and the different approaches taken by the organisation towards their supplier.First, let us take a look at the voice approach that is used by mainly by Japanese carmarkers towards their suppliers.(Left Box Fade In) In the voice approach, the organisation is like the mother cat, nurturing the kittens which are like the suppliers. They share knowledge and the organisation help the suppliers to improve their business process and increase cost savings. Thus the suppliers feel safe to work with the organisation and therefore they achieve better partnership by growing together.Now let us look at the exit approach used by mainly by American carmakers towards their suppliers.(Right Box Fade In), as you can see from the many beautiful ladies in the picture, the organisation is like a guy who wants to choose the best out of its suppliers. Using a reverse auction approach, the organisation choose the supplier with the best cost just like how a guy choose the girl with the best looks. In this approach, suppliers have to constantly improve their cost savings and feel threatened by new competitors.
Since we have understand the different relationships between the suppliers, now let us look at the supply chain processes before ICT.(Fade in Ford) As we know Ford is like a playboy choosing from a group of hot ladies, so just exactly how many ladies can it choose from?(Fade in Supplier) According to Burt, 1989, Ford has 2100 suppliers in 1981 and according to McPartners LLC, 2008, Ford hire over 500(Fade in Workers) people to do its accounts payable for its suppliers. Suppose each worker call 20 calls a day, it amounts to over 1000 calls(fade in phone calls), much more calls made than the last 5 years of my life and suppose each person types uses more than 100 pieces of paper for all the invoices, that amounts to over 50,000 papers. That’s about 100 trees chopped down just for one day of Ford’s accounts payable processes.
That is why it’s inefficient!->next slide
Expensive to maintain extra manpower and resources to deal with the problem
Impact of outsourcing ICTBank can focus more on core activitiesCost varies with usageDistance between bank and vendor – delay in recoveryOn point of failure
With regulatory institutions leveraging on ICT, it allows banks with the ability to:Submit feedback to the institution when new guidelines and policies are being consideredMake domestic and international payment through a common standard SWIFT (Society for Worldwide Interbank Financial Telecommunication) thus providing cost savingsProcess foreign exchange transactions through the CLS (Continuous Linked Settlement) that aims to eliminate settlement risk due to time-zone differences.
