1
E-S
UPPLY
C
HAINS AND
C
OLLABORATIVE
C
OMMERCE
Spring 2011
e-Commerce Implementation
Collaborative Commerce
Technology allows allied businesses
to work together
to best meet the demands of the marketplace.
Technology facilitates
Communication
Sharing information
Overview
Companies wishing to collaborate with outside companies need
Technology infrastructure that eases/promotes collaboration.
Based on open standards (where they exist)
Allowing for maximum flexibility and rapid reengineering
Internal mode of operating that supports collaboration.
Ability to handle outsourced or collaborative functions with
as much efficiency as internalized processes.
3
Supply Chain Management
"A complex process that requires the coordination
of many activities so that the shipment of goods
and services from supplier right through to
customer is done efficiently and effectively for all
parties concerned.
SCM aims to minimize inventory levels, optimize
production and increase throughput, decrease
manufacturing time optimize logistics and
manufacturing time, optimize logistics and
distribution, streamline order fulfillment, and
overall reduce costs associated with these
activities"—Turban, et al
Typical supply chain problems
Supply chains can be long, involving many partners in different
places.
Materials and information must flow among many players. Can
be slow and error prone when done manually
be slow and error-prone when done manually.
Quality and other problems with materials can ripple
throughout entire supply chain.
Collaborative Commerce
Viewing members of our supply chain as partners and working
with them in a collaborative way.
Using technology to share information—business intelligence—
for our good and the improvement of our suppliers or
for our good and the improvement of our suppliers or
customers.
A manufacturing or sales company is only as good as the
products they have to work with.
Supply chain integration vs. supply chain usage
Example of collaboration:
Example of collaboration:
Vendor-Managed Inventory (VMI)
Elements of Collaborative Commerce
Communicating with suppliers about
Upcoming needs—new products or components
Upcoming demand—quantities needed
New innovations
In order to enable supplier to
Develop products to meet our specific needs
Have products available when needed
5
Collaborative Commerce Participants
Upstream supply chain—our suppliers
Downstream supply chain—our customers
Internal supply chain—departments in our company which
ll b
t
collaborate
Success depends on:
Degree to which all participants willingly contribute.
Information availability and exchange
Speed, cost, quality
How well collaboration integrated into each company’s way
of doing business
If we don’t collaborate…
New product development delayed waiting on supplier to
provide components.
Product quality potentially lowered by inadequate products
f
li
from supplier.
Logistical problems—can’t get merchandise when needed,
where needed.
Example
The Bullwhip Effect—coping with erratic order volume.
Retailer A plans a big promotion selling Company Y YoYos.
Retailer A orders 1 million YoYos from Company Y.
Company Y doesn’t have 1 million YoYos in stock, so they can
only sell 500,000.
Company Y decides to build a new YoYo factory, seeing all the
money upcoming from future sales to Retailer A.
Retailer A’s promotion ends. They don’t need any more YoYos.
Economics of Collaboration
Communicating with suppliers about future purchases
allows supplier to
adjust their production quantities
not create or carry excess inventory
by doing above, reduce their cost of production, allowing
them to lower our prices
custom make products to best suit our needs
7
Barriers to Collaboration
Technical problems—networking computer systems,
providing security, etc.
Concerns about sharing corporate knowledge with suppliers
Lack of willingness to participate in collaboration activities
Examples of Collaboration
CPFR—Collaborative Planning, Forecasting, and Replenishment
Working with upstream or downstream partners to plan
orders.
I
d
d f
ti
Improve demand forecasting
Improve logistics efficiency
APS—Advanced Planning and Scheduling systems
Working to find optimal solutions to complex manufacturing
problems through effective scheduling
U i
f t i
biliti
t it f ll t
Examples of Collaboration
PLM—Product Lifecycle Management
Sharing information on new product development ideas,
retiring of products, etc.
Managing Collaboration—Key questions
1.
Corporate culture: How difficult is it to introduce
e-collaboration?
2.
How much can be shared with business partners?
3.
Who benefits are there from options such as
vendor-managed inventory?
9
Copyrights
Presentation prepared by and copyright of Dr. Tony
Pittarese, East Tennessee State University, Computer and
Information Sciences Dept. (
[email protected]
)
Podcast lecture related to this presentation available via
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