Definition of supply chain and supply chain mgmt and goals

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Chapter
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
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Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
LEARNING OBJECTIVES

• Demonstrate how enterprise systems achieve
  operational excellence by integrating and
  coordinating diverse functions and business
  processes in the firm.
• Demonstrate how supply chain management systems
  coordinate planning, production, and logistics
  with suppliers.

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Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Enterprise Systems

• What are enterprise systems?
• Enterprise software
• Best practices
• Business value of enterprise systems

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Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Enterprise Systems
How Enterprise Systems Work
Enterprise systems feature a set of integrated
software modules and a central database that
enables data to be shared by many different
business processes and functional areas
throughout the enterprise.
Figure 9-1
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Enterprise IS applications

• Why the need for supply chain management
• What are supply chains and supply chain
  management systems (SCMS)
• Benefits
• Information systems SCMS

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Paradigm shift how to compete

• One of the most significant paradigm shift of
  modern business management is that individual
  businesses no longer compete as solely autonomous
  entities, but rather as supply chains.

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Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
Nikes Supply Chain
This figure illustrates the major entities in
Nikes supply chain and the flow of information
upstream and downstream to coordinate the
activities involved in buying, making, and moving
a product. Shown here is a simplified supply
chain, with the upstream portion focusing only on
the suppliers for sneakers and sneaker soles.
Figure 9-2
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Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
Push- Versus Pull-Based Supply Chain Models
The difference between push- and pull-based
models is summarized by the slogan Make what we
sell, not sell what we make.
Figure 9-5
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Enterprise IS applications

• Why the need for supply chain management
• What are supply chains and supply chain
  management systems (SCMS)
• Benefits
• Information systems SCMS

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Enterprise IS applications

• Why the need for supply chain management
• What are supply chains and supply chain
  management systems (SCMS)
• Benefits
• Information systems SCMS

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Definition- Supply Chain

• all the activities related to the acceptance of
  an order from an customer and fulfilling it
  (Turban, McLean, and Wetherbe 2001).
• collection of physical entities, such as
  manufacturing plants, distribution centers,
  conveyances, retail outlets, people and
  information, which are linked together into
  processes supplying goods or services from source
  through consumption (Laudon Laudon 2001)

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Efficient and Effective

• In an efficient and effective supply chain, all
  components are integrated and linked from one
  phase to the next and it all flows well.

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• Inventory replenishment system triggered by
  customer purchases
• Best in industry
• Small inventory costs
• Allows Wal-Mart to adjust purchases of goods to
  meet customer demands
• Lowest payout of sales revenue for overhead among
  competitors

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Goals/Benefits

• Puts focus on improving service ability to
  customers, improving efficiency,
• Reducing uncertainty and risks in the supply
  chain
• Inventory turnover rate
• Reduce costs (inventory, supply)
• Increase market share
• Reduce cycle and lead time

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Supply Chain Components

• Upstream supply chain
• Internal supply chain
• Downstream Supply Chain

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Enterprise Information Portals
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Upstream Supply Chain

• Includes suppliers and their suppliers
• For Example a cow farmer and dairy producer

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Internal Supply Chain

• Includes all the internal process to turn
  material inputs into final products or services
• This would include all the steps necessary to
  turn milk and other material inputs, including
  chocolate, wooden Popsicle sticks, cardboard
  boxes, and ice cream into boxes of ice cream bars

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Downstream Supply Chain

• Consists of all the necessary components to
  deliver the product to end users
• This component consists of distributors, grocery
  and convenience stores, advertisers, and the
  local ice cream man

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Supply Chain Problems

• Delays in production, distribution etc.
• Expensive Inventories
• Lack of partners coordination
• Uncertainties in deliveries
• Poor demand forecast
• Interference with production
• Poor quality

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Uncertainty

• The major problem of the supply chain is
  uncertainty. The major source of the uncertainty
  is the demand forecast which can be influenced by
  the following factors
• Competition
• Prices
• Weather conditions
• Technological development
• Customer confidence

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Delivery Time

• Another uncertainty that causes problems is
  delivery time. Delivery time may depend on the
  following
• Machine failures
• Road conditions
• Traffic jams, etc.

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Global Supply Chain Problems

• Can be very long and complex
• Possible cross-broader problems
• Need information technology support of
  communication and collaboration
• Possible delays due to customs, tax,
  translations, and politics

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Solutions to the Problems

• To solve the problems of supply chains there
  must be coordination. Coordination must exist
  between suppliers and manufacturers in order to
  adequately meet the demand of consumers. This
  balance or coordination can be produced by
  eliminating or at least minimizing the
  uncertainties within the supply chain.

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Removing Uncertainties

• Many things can be done to improve coordination
  and remove uncertainties within the supply chain
  
• Companies can use outsourcing during demand
  peaks instead of trying to do it all themselves.
  
• They can also buy rather than make production
  inputs when demand is high.
• The chain can be configured with optimal
  shipping plans as well as use fewer suppliers.
• There needs to be a strategic partnership with
  suppliers to gain an advantage over competitors.
• Companies can use just-in-time approaches so
  small amounts of supplies are delivered when
  needed in order to reduce inventory costs.
• They can also manufacture outputs only after
  orders are received. Supplier-buyer
  relationships can be improved.
• The use of e-commerce, the Internet and other
  new developing information technologies can also
  greatly reduce the amount of uncertainties within
  the supply chain.

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Information Technology Solutions

• Some IT solutions include
• Internet application (intranets, extranets)
• Web based ordering or intelligent agents,
  Automate order taking
• Electronic Data Interchange (EDI) and Electronic
  payments
• Make-to-order (JIT)
• RFID and Tracking systems

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SCM AND INTERNET-BASED TECHNOLOGIES

• The explosion of information technology,
  especially the Internet-based technologies, has
  revolutionized the way organizations conduct
  their business and handle relations with their
  different partners.

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INTERNET-BASED TOOLS

• The Internet in forms of Intranets and
  Extranets can assist the firms in achieving cost
  reductions and maximizing productivity along the
  supply chain while remaining market-flexible

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Management Information Systems Chapter 8
Telecommunications, Networks, and the Internet
THE INTERNET
Intranets and Extranets

• Intranets
• An intranet is an internal organizational network
  that provides access to data across a business
  firm.
• The purpose of an intranet is share company
  information with and between employees.
• An intranet is created on a private local or wide
  area networks and maintained wholly within the
  organization.

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Management Information Systems Chapter 8
Telecommunications, Networks, and the Internet
THE INTERNET
Intranets and Extranets

• Extranets
• An extranet is an intranet that allows controlled
  access by authenticated outside parties.
  Typically an extranet will link the intranets of
  distributed organizations for the purpose of
  conducting business. This secure electronic
  consortium usually consists of an enterprise and
  its key trading partners, customers, dealers,
  distributors, supplies, and contractors (Bayles,
  1998, p.3).

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SOME ADVANTAGES OF INTRANETS-EXTRANETS

• Facilitates exchanges of information and funds
  (between the firm and its clients and suppliers)
• Allows paperless, faster and more accurate
  communication and transactions
• Increase customers satisfaction ( faster
  transaction recording, faster delivery of
  product)

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SOME ADVANTAGES OF INTRANETS-EXTRANETS

• Enterprises have access to all kinds of
  information
• Firms can better choose suppliers and get better
  deals
• Companies can reach customers faster and more
  effectively

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SOME ADVANTAGES OF INTRANETS-EXTRANETS

• Firms can develop and improve marketing
  strategies, conduct market researches, discover
  new ideas, new techniques and develop new
  products/services, improve the manufacturing
  processes, and much more.

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Management Information Systems Chapter 12
Managing Knowledge in the Digital Firm
INTELLIGENT TECHNIQUES
Intelligent Agents in PGs Supply Chain Network