Web Based Supply Chain Management

1
Web Based Supply Chain Management

• Chris Nicol
• Betsy Vo
• Ryan Gee

2
Agenda

• Overview of Supply Chain Management (SCM)
• Benefits of SCM
• SCM Technology
• Conclusions

3
The Traditional Supply Chain
Manufacturers
Distributors/Converters
Suppliers/Raw Materials
Retailers
Customers
Information Flows
Goods Flow
4
Traditional SC Problems

• Enterprise attempt to optimize individual
  processes often with conflicting goals

Purchasing
Manufacturing
Distribution
Customer Service/ Sales
Low pur-chase price Multiple vendors
Few change- overs Stable schedules Long run
lengths
High inventories High service levels Regional
stocks
Low invent-ories Low trans-portation
5
Overview of SCM

• SCM deals largely with cross-functional and
  inter-enterprise business processes to speed
  product, information and fund flows up and down a
  supply chain

Goods Flows Information Flows Funds Flows
Distributors/ Wholesalers
Manufacturer
Consumers
Suppliers
Retailers
6
Typical Quantified Benefits from Integrated the
Supply Chain
Source PRTM Integrated Supply Chain
Benchmarking Study, 1997
7
Lower Inventories Lead Times

• More frequent planning means responsive to
  changing customer needs while decreasing
  inventories

Average Supply
Average Supply
Planning Cycle
Time
Time
Planning Cycle
8
Reduced Volatility
9
Lower Costs

• Move from push to pull manufacturing

Distributors/ Wholesalers
Manufacturers
Consumers
Suppliers
Retailers

• Make what we will sell, not sell what we will
  make!!

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Total Optimization

• Optimization of all supply chain activities

Synchronized, Sequential Planning
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SCM and e-Business Practices

• Move from functional silos to process-oriented
  business processes (e.g., order-to-cash,
  cash-to-cash)

12
Barriers

• Integration of Systems
• Legacy systems
• Security Issues
• Low Cost Technology
• EDI vs. Internet

13
SCM Technology

• APS and e-business technology supports best SCM
  practices
• Advanced Planning Scheduling Systems
• XML (Extensible Markup Language) enabled internet

APS and e-business
MRP
SCM
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APS

• Model factory production system
• material requirements constraints
• plant capacity limitations
• additional resource limitations
• Evaluate existing or new production plans
• Provide production scheduling
• Capable of expansion to entire supply chain
• Provide for internal and external integration

15
XML

• Extensible Markup Language
• Huge Advantage over EDI
• Huge Advantage over HTML
• XML Users
• Heavily used in medical industry
• Microsoft is employing it everywhere
• Provides for external collaboration via sharing
  of data regardless of application
• Provides Machine-to-Machine Interaction over the
  Internet

16
Future Internet-Connected Supply Chain
Wholesale Distributors
Suppliers
Retailers
Manufacturers
Customers
Information Flows
Goods Flow
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Conclusions

• E-business technology will tear down the walls
  inside companies
• Will also allow companies to do joint planning
  and scheduling with their suppliers suppliers
  and customers customers
• The Internet will help foster the rapid growth of
  dynamic supply chain trading communities

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Leaders

• Software Companies
• IT2 Technologies
• PeopleSoft
• SAP
• Industries
• Automotive
• Dell Computers
• Lucent Technologies