Role of Information Technology in Supply Chain Management
INTRODUCTION• Supply chain management (SCM) is concerned with the flow of products and information between supply chain members organizations.• Recent development in technologies are helpful to coordinates the activities to manage the supply chain. The cost of information is decreased due to the increasing rate of technologies.
ELECTRONIC COMMERCE Electronic commerce, commonly known as e-commerce refers to the buying and selling ofproducts or services over electronic systemssuch as the Internet and other computernetworks It also includes the entire online process ofdeveloping, marketing, selling, delivering, servicing and paying for products and services. The amount of trade conducted electronicallyhas grown extraordinarily with widespreadInternet usage
E-COMMERCE IN SUPPLY CHAIN•Increases the efficiency in operations•Better customer service•Quick process to information.•Better customer service.•Reduced paper work.•Increased productivity•Cost efficiency.•Competitive advantage.
Cont:• Information Sharing, Convenience, And Control• Higher Margins• Quick Comparison Shopping• Information Sharing, Convenience, And Control
Business ModelThe plan implemented by a company to generaterevenue and make a profit from operations. Themodel includes the components and functions ofthe business, as well as the revenues it generatesand the expenses it incurs.
Business To Business - B To B• What Does Business To Business - B To B Mean? Business conducted between companies, rather than between a company and individual consumers.• Business To Business - B To B An example of a B2B company is a firm that makes parts that are sold directly to an automobile manufacturer.
Business To Consumer - B To C• What Does Business To Consumer - B To C Mean? Business conducted between companies and individual consumers, rather than between two companies.• Business To Consumer - B To C A retailer like Wal-Mart is an example of a B to C company
Customer To Customer - C To C• What Does Customer To Customer - C To C Mean? A type of business model that facilitates interaction between customers. Customer to customer businesses provide individuals with a place to converse, exchange and interact with other people.• Customer To Customer - C To C Many C2C businesses have online operations. Online auctions and classifieds such as e-bay are examples of very successful customer to customer business models. These sites dont look to directly sell goods to their members, instead the customers are exchanging with other customers.
Enterprise resource planning (ERP) Enterprise Resource Planning (ERP) is a system which brings all the decision making information from all the departments in a company into one single place in order to increase efficiency, productivity and profit of the company.
FEATURES• Integrates internal and external management information across an entire organization• Facilitates the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside• It involves finance, manufacturing, sales and service, customer relationship management, etc
Cont: • It is an integrated system that operates in real time (or next to real time), without relying on periodic updates. • A common database, which supports all applications.
E-Procurement E-procurement is the business-to-business purchase and sale of supplies and services over the Internet. This includes management of correspondence, bids, questions and answers, previous pricing, and multiple emails sent to multiple participants. E-Procurement helps to reduce the transactional costs, achieving faster & automated transactions, helps the buyer to focus more on strategic part of procurement.
E-Procurement Tools E-CataloguesIn normal case of business scenario, supplier visits end users and buyers and provide their product information through Product catalogues. These catalogues normally contain product specifications, rates, validity of rates, discounts, minimum order quantity etc.
E-MarketplacesThis is the single point entry meeting place for buyers and suppliers. Here buyers post their requirements and suppliers can quote against the requirementsposted by the buyers. Features of a e-marketplace can vary from plain transactional trading to enabling suppliers and buyers to collaborate in the areas of supply chain planning, product designing & development, knowledge sharing.
E-Reverse Auctions English Reverse Auctions In this type of reverse auction buyer opens the auction with the price of the item and seeks lower bid. Bidders outbid each other by placing lower bids. The auction ends when no body is able to quote lesserthan the lowest quote. It is time bound bidding. The buyer may reserve the price above which he is notwilling to pay. In case of winner of the bid is not able tosupply the full quantity the buyer can go for second lowedbidder to fulfill the quantity. Sometimes buyer may imposethe condition of supplying full quantity in the auction.
Now a days there is new focus on Request for Proposal(RFP) and Request for information (RFI). So this area nowa days called e-Sourcing or RFx Model. Request for Quotation (RFQ)is a request for supplier to quote for a particular productor service. The buyer sets the requirements andspecifications in the document. The supplier has to quotein the prescribed format specified by the buyer. Request for Proposal (RFP)is a request by a buyer for supplier for submitting theproposal. RFP asks suppliers to propose how they wouldmeet the buyer’s product or service need. This approachis largely used when the supplier is having greaterexpertise than buyer.
Request for Information (RFI) implies that there is no commitment from either side. Buyer asks for the information from supplier and evaluate whether they might go for particular service or job with a particular supplier. Self Service Procurement:Self service procurement passes on the procurementjobs to end users. Materials procured under self serviceare normally non strategic, under contract and withfixed pre negotiated prices. Self service procurementfrees the buyer from transaction procurement andhelps him to focus on strategic procurement.
BenefitsImproved Process efficienciesManual procurement is labour intensive and timeconsuming process. Switching to e-procurementhelps companies to reduce employees’ cost, paperand redundancy and cycle timesReduction in errorsManual processes are always prone to errors. Inmanual processes as and when the information istransferred at many occasions it is re-written or re-typed at various stages
Auction pay online is the best way toincreasing the value of an item in nonnatural but against the market trend.Open (little or no Private (few bidders)restriction)
Suppliers log onto Can place multiple Goodsthe website via a bids for the same deliveredpassword product accordingprotected access during an event To bidderscreens convenience
Benefits of E-Auctions Opportunities to find unique items and collectibles Lower prices Secure bidding environment Bidders can be monitoredTime benefits: reduction in postage, paperwork, photocopying Convenience Identities of bidders are usually hidden
Limitations of E-AuctionsPossibility of fraudLimited participationSecurityAuction softwareLong cycle timeMonitoring timeEquipment for buyersOrder fulfillment costs
The Largest Global Shopping Portal in theWorld Started with online books. Started with online user auctions. Started with a search engine. Started with a search engine.
ELECTRONIC MARKETSE-marketplaces are emerging to serve eachpoint of every industrys supply chainE-markets are highly collaborative E-Businessmodels that organize complex businessprocesses between multiple participants into avirtual commerce community
E-MARKETPLACES : VALUE CREATIONefficient transactional processesnew business relationshipsnew business modelsnew businesses
BENEFITS TO BUSINESSESExtend the presence and reach of a companyFacilitate doing business withanyone, anytime, anywhereAggregation of content and facilitation of workflowlead to significant reduction in transaction costsCycle times are reduced and deliveries are quickerImproves relationship with trading partnersMarket efficiencies Better inventory management Better visibility leading to predictability
BENEFITS TO BUYERS Aggregation of multiple suppliers Direct access to suppliers and through dynamic pricing Location and tracking of new suppliers Provides more negotiating power Leads to quick response buyers
BENEFITS TO SUPPLIERSProvides reach to vast, untapped global marketsTrue value of products can be realized throughaggregation and participation of buyersEnables to support JIT practicesLeads to quick response suppliers
E-MARKETS: DESIGN ISSUESNEGOTIATIONS Distributed Negotiations Integrative Negotiations AuctionsDESIGN OF USER INTERFACES
Business objects in SCMThe Business Objects Supply Chain Management applicationprovides visibility into performance across the supply chain thatcan help you measurably improve the effectiveness of yoursupply chain operations and better deliver on corporatemandates, such as lowering costs and improving return onworking capital. Business Objects will give anintegrated, dynamic view of our sales, supply chain, andcustomers.
Business Objects benefitsWe can evaluate, monitor, and improve our supply chain performance and efficiency. Help to gain visibility over constantly changing operations as we continuously plan sourcing, manufacturing, delivery, and returns. It will provide you with hundreds of prebuilt analytics that can answer thousands of key business questions and help to gain deeper business insight.
Quickly gain deeper business insight Gain industry best practices Standardize on terminology and data Minimize risk and speed your implementation
Importance of business objectsThe Best Choice on the Market TodayThe Business Objects suite of enterprise analytic applications is the most comprehensiveProduct offering on the market today. With insightful analytics, an unparalleled frameworkSupporting customized development, and an integrated data warehouse, Business ObjectsProvides your organization with the insight you need to extend your competitive advantage
E logistics :Internet Impact to Logistics management
WHAT IS E-LOGISTICS?E logistics = information liquidityThe ability to acquire and use information when it is needed, what is needed, and in an appropriate context.• Assessable• Meaningful• Timely• Complete
E LOGISTICS PLAYERS Players in space-examplesManugistics, Manhattan Associates, EXE technologies(SSA Global), Descartes, SAP etc. StrengthsDomain knowledge, proven solution components, customer base, critical mass, existing partnership WeaknessesOld tech infrastructure
DRIVERS IN THE LOGISTICS INDUSTRYGlobal sourcing and distributionIndustry segmentationIncreasingly IT drivenGrowing acceptance of outsourcing logisticsMarket leaders continuously raising the bar: space management, inventory management, JIT, continuous replenishment program(CRP), vendor partnership, VMI etc.
E LOGISTICS SERVICESFreight exchange/auctionPurchasing portalAutomated billing and settlementLane optimizationDocumentationAutomated bookingService failure notification and resolutionAutomated tracking and tracing
International trade compliance and landed costProduct development collaborationPricing, revenue and profitability managementE marketingE fulfillmentData mining(performance management)
E LOGISTICS-VALUE PROPOSITIONLogistics exchanges will bring price efficiency to the most segmented marketLoad matching and other optimization tools will improve asset utilizationE logistics will greatly improve the industry’s information liquidity
Collaborative product development and revenue management tools will allow business to improve its return on investmentIntegrated supply chain execution and collaboration tools will dramatically reduce business interaction costs and achieve a learner, quicker and more reliable supply chain
BENEFITS OF E LOGISTICS Business benefits- On-time delivery and fulfillment, lead time reduction- Customer service improvements, increased collaboration and coordination- Increased sales IT benefits- Reduces time for data entry, management and integration- Plug and play, easy integration with existing and third- party systems- Transaction processing and monitoring
Network effect benefits- Lower transportation cost, improved capacity utilization- Flexible and responsive supply chains(co- mingling, merge-in-transit)- Single point of connection for participants