Impact of Ecommerce on Global Manufacturing

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Impact of Ecommerce on Global Manufacturing

• Dr Hamid Jahankhani
• School of Computing and Technology

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Overview

• The aim of this presentation initially is to
  review e-manufacturing and to explain the needs
  of business strategies for complete integration
  of all business elements by referring to a global
  manufacturing company, BMWs MINI case study.
• This presentation then refers to the strategic
  decision making that any Small and Medium size
  Enterprises (SME) should make to adopt a
  technology platform for a new project. The
  reference is made to an on ongoing development to
  provide an integrated business information and
  e-commerce system for a manufacturing company.

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Introduction

• Brief history of electronic commerce
• E-commerce and Internet technologies have enabled
  companies to shift their manufacturing operations
  from the traditional factory integration
  philosophy to a supply chain-based e-factory
  philosophy
• Ecommerce has transformed companies from a local
  factory focus to a global enterprise and business
  focus and changing the nature of manufacturing
• E-manufacturing is a system methodology that
  enables the manufacturing operations to
  successfully integrate with the functional
  objectives of an enterprise through the use of
  the Internet and wireless technologies

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Distributed Multiple Product Development Projects
(DMPDPs)

• The distributed, collaborative, and adaptive
  planning and control approach for DMPDPs, is a
  representative project environment in a modern
  e-enterprises
• Consider a car manufacturing company having four
  technical centres in four countries. Every
  technical centre has multiple functional
  divisions internally and the functionality of
  each technical centre is not mutually exclusive
  among the four technical centres. On the basis of
  the company's platform line-up, four basic car
  programs are being carried out simultaneously
  (projects a, b, c and d). Each car platform has
  major-change projects once every 4 years and
  minor-change projects in between, meaning that a
  new project starts every 6 months.

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Distributed Multiple Product Development Projects
(DMPDPs)(Source Lee Y. and Kumara S. R. T., 2003)
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E-manufacturing

• These days large-scale distributed projects are
  very common to see.
• High marketplace competition has forced the
  modern enterprises to compress their product
  development lead-time
• Projects have also become ever distributed due to
  economic reasons
• under these conditions traditional project
  management techniques cannot provide the required
  functionality to react effectively to the changes
  and to support collaborative project management
  processes in distributed project environments
• The e-manufacturing concept is developed to meet
  the requirements for the complete integration of
  all business processes and systems such as
  e-procurement, Supply Chain Management (SCM),
  Customer Relations Management (CRM), and
  Enterprise Resource Planning (ERP).

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MINI (BMW) case

• The BMW production history dates back to 1923.
  The era of globalisation begins in 1992 at
  Spartanburg, South Carolina, where BMW setup its
  first complete manufacturing plant outside
  Germany
• The strategy behind the scene was the production
  follows the market
• Though plans, BMW have projected a production
  level of 50,000 vehicles per year in the initial
  stages, 2002 production exceeded 120,000 cars
• The BMW groups use ecommerce strategies to use
  effective business explore the market.
• The BMW Group sees ecommerce as both a challenge
  and an opportunity for the entire Company
• The strategic significance of Ecommerce lies in
  the greater process orientation and networking of
  current structures and processes, with a clear
  focus on the customer.

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MINI (BMW) case

• The primary focus is not on cost reduction, but
  rather on benefits, flexibility and quality and
  customer satisfaction
• The vehicles of the MINI brand have allowed the
  BMW Group to broaden its product range
• The marketing strategy carried out by BMW, to
  identifying customer groups (Target Markets) and
  tailoring its product offerings, prices,
  distribution, promotional efforts and services
  towards that particular market segment
• Through continuous process optimisation, the
  product has been developed through to the series
  of stages in only 30 months
• The BMW Groups production network is
  characterised by agility, the ability to respond
  quickly and flexibly within a changing framework

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MINI (BMW) case

• The BMW group introduced an online ordering
  system in 1998 which gives dealers the option of
  showing customers their desired car on the screen
  and confirming the delivery date on the spot
• The time frame when the vehicle can be built with
  the desired fitting is fixed in few seconds and
  the place in the production process is
  immediately reserved and the manufacturing
  logistic department informed
• There are more then 10³² variant which is more
  than billion with the product range of BMW group
• The BMW group has optimised internal processes to
  such a level that changes according to the
  customer wishes regarding engine capacity, colour
  upholstery can be accommodated up to ten working
  days before the start of the production without
  effecting the delivery date.

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MINI (BMW) case

• The Assembly takes place on location with
  according to the BMW global quality standards.
• Currently, the BMW Group production network is
  made up of 15 plants and 8 assembly facilities
  worldwide. Particular abilities of the network
  are the common supply of systems and components
  as well as a high standard of productivity and
  agility.
• Therefore, BMW, utilises the internet as an
  integral tool for developing superior customer
  relations, through providing an environment
  inclusive, both to existing and potential
  customers, through expressing views and providing
  feedback on product development

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Remapping manufacturing with . NET Technologies

• In June 2000, Microsoft announced its .NET
  initiative, a broad new vision for embracing the
  Internet and the Web in the development,
  engineering and use of software
• One key aspect of the .NET strategy is its
  independence from a specific language or
  platform.
• .NET enables Web-based applications to be
  distributed to consumer electronic devices, such
  as mobile phones, Handheld PCs and persona1
  digital organizers, as well as to desktop
  computers
• .NET is also a set of standards, and an operating
  platform, to enable different applications and
  organisations to communicate over the Internet,
  using industry-agreed protocols such as Simple
  Object Access Protocol (SOAP).

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Integrating ERP with External Applications

• The local manufacturing company use Syspro
  solution for its ERP system
• Like most small-medium size enterprises (SMEs),
  this companys IT infrastructure is based on
  Microsoft technology and most (if not all) of the
  software used by the company is either Microsoft
  software or other Windows-based software
• Being a small company with a Microsoft-centric IT
  infrastructure, this organisation fits the
  profile of a typical .NET adopter

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Conclusions

• Those companies which have decided to take a lead
  have taken an evolutionary approach towards
  e-commerce adoption.
• Ecommerce has transformed companies from a local
  factory focus to a global enterprise and business
  focus and changing the nature of manufacturing
• Every SME goes through the strategic decision
  making when they adopt a technology platform for
  a new project. The decision making becomes more
  difficult when attempting to integrate business
  information and e-commerce system through an ERP
  system.
• Consumers of ERP systems are demanding solutions
  that can be easily integrated with Web
  applications in order to provide such services as
  e-commerce to customers and browser-based access
  to remote workers.