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Chapter 6

Chapter 6. Supply Chain Management. SCM – some definitions. Supply chain management (SCM) The coordination of all supply activities of an organization from its suppliers and partners to its customers Upstream supply chain

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Chapter 6

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  1. Chapter 6

    Supply Chain Management
  2. SCM – some definitions Supply chain management (SCM) The coordination of all supply activities of an organization from its suppliers and partners to its customers Upstream supply chain Transactions between an organization and its suppliers and intermediaries, equivalent to buy-side e-commerce Downstream supply chain Transactions between an organization and its customers and intermediaries, equivalent to sell-side e-commerce. Supply network Involving multiple organizations More than one chain to manage
  3. Role of Technology Technology is crucial Want to manage relationships with customers, suppliers and even intermediaries Relationships are developed based on information flow Information flow is enhanced by technology Technological uses Early implementors use EDI or trading gateways Move towards Internet (low risk transactions and more…) Technology pushes for collaborative SCM towards an efficient market
  4. Putting SCM Into Perspectives Keep it simple Upstream (procure) – Process – Downstream (deliver) This can go beyond organizational boundaries So when improving your SCM More than process But cross-organizational relationships And value add for customers Easier to understand SCM for goods The same concept for services Human factors, financials, information, etc
  5. Logistics Logistics is not all of SCM More specific to managing logistics “what you need” – NOT TRANSACTIONS Ex: Resources, transportation Inbound Vs. Outbound Push or Pull Strategies for SCM Tendency?
  6. The Value Stream Value Stream It’s a combination of steps chosen that generates value How do you decide? Conduct the analysis Value chain analysis Asess the way resources are being used to generate value IS maybe used between value chains to maximize
  7. Value Networks & Virtual Organizations Focuses on External Value chain How they link together (outside organizational boundaries) and form a network Common Composition Supply side partners (Upstream) Core value chain partners (leader) Sell side partners (downstream) Integration Partners (techno-providers) Characteristics to emphasize Real time information exchange (Tech-intensive) Dynamic Network Structure Various links connections (EDI, WS, Email)
  8. Restructuring The Supply Chain Realize there are choices for restructuring Just how far is your extent? How can technology support the strategy Increase the flow of information BUT all members must be e-enabled There is an issue of trust… sharing your data! “The success of Dell in virtual integration suggests that all companies must adopt this model in order to be competitive”
  9. Benefits of applying IS to SCM Increased efficiency of individual processes Benefit: reduced cycle time and cost per order Reduced complexity of the supply chain Benefit: reduced cost of channel distribution and sale Improved data integration between elements of the supply chain Benefit: reduced cost of paper processing Reduced cost through outsourcing Benefits: lower costs through price competition and reduced spend on manufacturing capacity and holding capacity. Better service quality through contractual arrangements? Innovation Benefit: better customer responsiveness.
  10. Benefits to buying company Increased convenience through 24 hours a day, 7 days a week, 365 days ordering Increased choice of supplier leading to lower costs Faster lead times and lower costs through reduced inventory holding The facility to tailor products more readily Increased information about products and transactions such as technical data sheets and order histories
  11. IS Support in SCM Upstream SCM Collaborative SCM Tracking of Inventory RFID Downstream Disintermediation The Key is to: Be efficient and responsive Provide visibility ALONG the supply chain
  12. Figure 6.8 Popularity of different e-business applications in Europe according to company size Source: eEurope (2005)
  13. Figure 6.9 Proportion of businesses that integrate with their suppliers, or plan to Source: DTI (2004), Fig. 7.5b
  14. Figure 6.10 Barriers to implementing information and communications technology Source: DTI (2004), Fig. 5.2f
  15. Implementation There is an urge for collaborative SCM Benefits are real Pushed by the development of Web Services Planning is plays a crucial role Scope of change Vs. Speed of change Issue to deal with is RISK
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