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Integrated EC and SCM: Redefining Business Networking

Explore the transformation to the 'new economy' with integrated EC and SCM concepts in this case study, revealing implications for designing solutions. Understand the importance of networked business models for efficient processes and customer satisfaction.

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Integrated EC and SCM: Redefining Business Networking

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  1. EC & SCM AT ETA FABRIQUES D’EBAUCHES SA

  2. Presented By: • Lito Baysa • Jim Lindfors • Steve Powell

  3. PRESENTATION OUTLINE • Introduction • Concepts in Business networking • Case Study • Implications for designing EC/SCM solutions • Conclusion

  4. INTRODUCTION • Transformation from the old to the ‘new economy’ • Rise of new intermediaries, deconstruction of value chains, new business rules, and new requirements to meet customer demands in terms of speed, availability, cost and service. • Business networking through integrated EC and SCM

  5. INTRODUCTION • Integrated EC and SCM approach • Combination of EC and SCM • Industrial physical goods • Existing business networks

  6. EC AND SCM IN BUSINESS NETWORKING • Concepts of business networking • Extends the scope of BPR methodologies • Assumes that production occurs not within vertically integrated companies but in networks where different partners concentrate on their core activities • Addresses new strategic options, new possibilities for processes as well as technical issues

  7. EC & SCM IN BUSINESS NETWORKING • EC: Building the Links • Phases of Transactions • Information – identification of vendors and products • Contracting – negotiation and decision making • Settlement – finalization order entry

  8. EC & SCM IN BUSINESS NETWORKING • SCM: Building the Chain • Four Processes in SCM • Plan – demand and supply planning, inventory • Source – sourcing and material acquisition • Make – production, material request and receipt • Delivery – order, warehouse and transportation management.

  9. EC & SCM IN BUSINESS NETWORKING • Comparison of Concepts • Aspects of Complementarity • Process: Transaction processes link individual business processes • Scope of design: EC takes a transactional perspective whereas SCM takes flow perspective

  10. CONCEPTS OF BUSINESS NETWORKING • Transformation

  11. CASE STUDY

  12. ETA SA Fabriques d’Ebauches • Global producer of watches for Swatch brands • Consists of a number of companies that focus on finished movements, component production and R&D • Swatch brands produce and distribute finished products • World’s Third Largest manufacturer of movements • 10,000 employees -- 15 production sites -- 1998 revenue = 1 billion SF

  13. Goals -- Solutions

  14. STRATEGICALLY IMPORTANT PROBLEMS • Redesign of the Introduction Process for New Movements • New distribution strategy for movements and spare parts • Installation of a new distribution channel for spare parts and movements

  15. MAIN PROBLEMS ENCOUNTERED • Customers lacked • information on interchangeability of parts (Swatch Group) • comprehensive technical documentation for assembly, storage, etc of movements and spare parts

  16. MAIN PROBLEMS (continued) • Low level of customer service • long cycle times • misunderstandings during order processing • long delivery times • Rudimentary customer information available

  17. SOLUTION • Implement a new distribution channel for spare parts • EC/SCM Solution • direct order entry • new supply chain for direct deliveries to customers

  18. ETA SA -- EC • C:\Documents and Settings\Jim\My Documents\MAGL\IS695\Presentation -- Fabriques D'ebauches SA\ETA SA Customer Service Main.htm • C:\Documents and Settings\Jim\My Documents\MAGL\IS695\Presentation -- Fabriques D'ebauches SA\ETA SA Customer Service.htm • C:\Documents and Settings\Jim\My Documents\MAGL\IS695\Presentation -- Fabriques D'ebauches SA\ViewDoc 1.pdf • Presentation -- Fabriques D'ebauches SA\EOS ETA Online Shop.htm

  19. MAIN BENEFITS of EC • Efficiency of information and contracting services • All relevant information on existing and new products on same channel as order entry (technical, prices, sales conditions, interchangeability) • Improved customer service • additional: electronic order payment options, technical document downloads, and electronic order tracking • planned: customer profiling, individual customer homepages and communities, FAQ, and auctions for refurbished parts • Efficiency of order processing • homogenization of master data reduces matching effort, and hence, reduced misunderstandings • can handle more volume with more time for personalized customer service

  20. RE-ENGINEERING the SPARE PARTS SUPPLY CHAIN • Significant number of transaction direct deliveries • Concentration of inventories at ETA SA • Elimination of warehouses at brands and retailers • Delivery guarantees for customers

  21. COMPLEMENTARY of CONCEPTS --- SCM IMPORTANCE • Supply chain performance – a selling proposition • ETA Online higher priorities and delivery guarantees • Credit card payment introduced • Track shipments and provide accurate shipping cost (3rd party)

  22. COMPLEMENTARITY of EC / SCM • Process – • improved information and contracting, direct customer contact (browse catalog and enter order) • EC focus on catalog and order entry channel • SCM focus on order processing, delivery and payment (settlement phase). EC provides efficient link between internal supply processes and the customer.

  23. COMPLEMENTARITY of EC / SCM • Scope of design • New solution for transactions between ETA and customers • Catalog makes interface to customers more efficient • Transaction process covers entire customer process – marketing to after sales • Supply chain activities include Order flow from online shop to ERP, physical goods delivery, financial goods from customer

  24. IMPLICATIONS for DESIGNING EC/SCM SOLUTIONS • Apply principles of Business Process Re-engineering. • Master Data Management • Communicate Win-Win Situation.

  25. IMPLICATIONS for DESIGNING EC/SCM SOLUTIONS • Apply principles of Business Process Re-engineering. • Structure (Illustrate) the Organizational, Functional, and Data Dimensions. • Strategy Level – Win-win, ROI • Process Level – creation of functional efficiency. • Systems Level – applications reliability

  26. IMPLICATIONS for DESIGNING EC/SCM SOLUTIONS • Master Data Management as, “Hidden Success Factor” • Identify applicable standards for handling orders via customer counter. • Control of interchangeable information, pricing information, and parts description integrity. • Although EC/SCM does not explicitly require it, ETA calls standardization it’s “Hidden Success Factor”

  27. IMPLICATIONS for DESIGNING EC/SCM SOLUTIONS • Communication of Win-Win Situation – ROI. • Set-up costs. • Running costs. • Benefits.

  28. CONCLUSION AND NEXT STEPS • Integration of EC and SCM is changing the way businesses work internally and with each other. • The future will prove whether B2B relationships will remain committed. • Potential to extend EC/SCM strategy to broader line of products.

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