OUTSOURCING AND THE ROLE OF TECHNOLOGY

1. OUTSOURCING AND THE ROLE OF TECHNOLOGY Vish V. Krishnan The University of Texas at Austin

2. 2 AGENDA Outsourcing and the Scope Decision The Role of Technology: The Case of FreeMarkets Managing Internet Auctions

3. What do we learn from the beer game? What is a Supply chain and Why is it Important? What is Supply Chain Design? Why is there a question of Fit between Products and Supply Chains? From the Last Class People become their Positions Inaction Excessive Action Information Distortion � Bullwhip �Supply Chain� Moves the focus beyond neighbors to the entire �value system� : from supplier�s suppliers to customer�s customers. Supply Chain Mgmt is difficult because unpredictable demand must often be matched with inflexible supply. Supply Chain Mgmt is Relevant because it can contribute to increasing ROIC and shareholder value The design that makes a supply chain efficient may make it less responsive. At the frontier, there may be a trade-off between efficiency and responsiveness. Ensure there is a fit between your products/markets and the supply chains. There may be ways to offset this tradeoff? People become their Positions Inaction Excessive Action Information Distortion � Bullwhip �Supply Chain� Moves the focus beyond neighbors to the entire �value system� : from supplier�s suppliers to customer�s customers. Supply Chain Mgmt is difficult because unpredictable demand must often be matched with inflexible supply. Supply Chain Mgmt is Relevant because it can contribute to increasing ROIC and shareholder value The design that makes a supply chain efficient may make it less responsive. At the frontier, there may be a trade-off between efficiency and responsiveness. Ensure there is a fit between your products/markets and the supply chains. There may be ways to offset this tradeoff?

4. Organizing Framework: Matching Supply Chains and Products