Work-Flow-Related Technology

For now, work-flow systems are limited to factory like work processes. For the foreseeable future, moreover, wide-scale work flow does not seem practical for all work environments. Realistically, then, work-flow systems will play a useful role in the important but boring world of repetitive, periodic work

processes, especially relating to managing documents and images. Work flow in an unstructured context remains elusive, and the notion of comprehensive work-flow systems must be regarded as nothing more than a dream.

8.7

SUPPLY CHAIN MANAGEMENT (SCM)

Today, there is a growing realization that product excellence does not guarantee competitive advantage and profits. Many firms have been seeking a way of increasing profits through better management of their supply chain (network of partnerships) using technology and avoiding the extremes of either internalizing it or of outsourcing most functions. In the interest of acquiring an edge, these companies are beginning to use the supply chain network to reduce costs and complement their products with basic and value-added services.

But supply chains need to be managed. Essentially, supply chain management (SCM) is an integrating process based on the flawless delivery of basic and customized services. Simply put, SCM optimizes information and product flows from the receipt of the order, to purchase of raw materials, to delivery and consumption of finished goods. SCM plays an important role in the management of processes that cut across functional and departmental boundaries. SCM goes beyond organizational boundaries, reaching out to suppliers and customers.

SCM is in stark contrast to the traditional approach, whereby executives think in terms of component activities such as forecasting, purchasing, production planning, or warehousing. Typically, these activities were managed in a fragmented manner, and so it was not uncommon to find them under separate functions that do not share information. Firms are now realizing that in a world of rapid response and order fulfillment, a company that is incapable of managing cross-functional processes may become extinct.

SCM is important in retailing because it helps manage the demand and supply functions. In electronic commerce, supply chain management has the following characteristics:

 An ability to source raw material or finished goods from anywhere in the world.  A centralized, global business and management strategy with flawless local execution.  On-line, real-time distributed information processing to the desktop, providing total supply

chain information visibility.

 The ability to manage information not only within a company but across industries and enterprises.

 The seamless integration of all supply chain processes and measurements, including third- party suppliers, information systems, cost accounting standards, and measurement systems.  The development and implementation of accounting models such as activity-based costing

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 A reconfiguration of the supply chain organization into high – performance teams going from the shop floor to senior management.

Figure shows the two primary models of supply chain management: push versus pull. These models contain three primary elements:

1. Logistics and distribution (integrated logistics). Logistics is a relatively new discipline that deals with the integration of materials management and physical distribution. Although logistics and SCM are sometimes interchanged, think of SCM as an umbrella that incorporates the logistics function. Over the years areas such as materials management and distribution have evolved into logistics, which in turn has become one integral component of SCM

2. Integrated marketing and distribution: Most managers often do not realize that order processing and fulfillment processes may exceed 15 percent of the cost of sales. Traditionally, the customer order process is initiated by sales personnel, who have an in-depth understanding of the customers product and service requirements. In electronic commerce, the order process could be initiated by marketing information systems such as point-of-sale systems. Today, with the aid of technology, we are able to integrate the customer directly and react to changes in demand by modifying the supply chain.

3. Agile manufacturing. Consumers and manufacturers are stressing quality and speed. One of the most influential visions of production goes by the name of agile manufacturing.

Manufacturer

 Financial / marketing-driven forecast

Retail distribution center

 Order point based on warehouse

Retail store

 Order point based on shelf inventory

Retail Store

 POS data collection

Retail distribution center

 Automatic replenishment

Manufacturer

 Demand driven forecast based on

Consumers Purchase Merchandise

Consumers Purchase Merchandise

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8.8 SUMMARY

This chapter was about the use of e-commerce concepts to improve the intra organizational operations, we briefly discussed how it can help in work-flow management, product customization and supply chain management. We discussed the various trade offs between vertical, horizontal and virtual organizations. We also studied the work flow related coordination and technology components. The last section dealt with the push based and pull based supply chains.

8.9 QUESTIONS

1. What is work flow management?

2. What are the two main issues that are focused by customization? 3. What is supply chain management?

4. What is the main disadvantage of vertical organization?

5. What is the main difference between horizontal and vertical organizations? 6. Define virtual organization?

7. What are the two approaches of virtual organization? 8. What are the two main categories of SCM?

9. What are the primary elements of SCM

10. What is meaning of push based and pull based supply chains.

8.9.1 Answers

1. It is the concept of task coordination for better results. 2. Time to market and flexible operations.

3. It is the chain of suppliers and customers for a particular business. 4. It allows gaps to exist between employees of different departments. 5. Horizontal organization is two tiered as against multiple tiered organization.

6. It is a network closely coupled upstream with suppliers and downstream with customers. 7. Downward and lateral.

8. Push based and pull based.

9. Logistics, integrated marketing and agile manufacturing.

Chapter 9