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Sharing information across the Supply Chain

In the complex world of supply chains, sharing information is crucial to prevent issues like the Bullwhip Effect, where minor retail changes result in significant manufacturing fluctuations. Technologies such as Advanced Shipping Notice (ASN), Drop Shipping, and third-party logistics (3PL) streamline processes by ensuring accurate communication between customers and suppliers. XML and XBRL are emerging standards that enhance e-business efficiency by providing self-describing data. Understanding and implementing these technologies can lead to greater operational effectiveness and reduced errors in transactions.

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Sharing information across the Supply Chain

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  1. Dr. Ron Lembke Sharing information across the Supply Chain

  2. Supply Chain Technologies • ASN -- lets customer know exactly what has been sent • Drop Shipping -- Supplier sends directly to the store, not to store’s warehouse • Computer sent to house via UPS • 3PL: Third-party Logistics Provider • Trucking companies, manage inventories, anything you don’t want to do

  3. Bullwhip Effect • Lack of information sharing can cascade through the supply chain. • Small changes at retail level lead to huge swings at manufacturing, like a bullwhip • Several retailers order all at once, distributor thinks sales have jumped, orders a much bigger order, etc. • Better: sales info shared along “Value Chain.” Graph: Disney & Towill, 2006, Supply Chain Mgt: An Intl J

  4. Electronic Data Interchange • My computer talks to yours, tells you exactly what I want to order, when • You fill out a form, very compressed message sent, viewed as form • Software, hardware expensive to implement Sample Purchase Transaction ST88850*1 Transaction Set identifier BEG*00*NE*00498765**010698 Beginning of Segment PID*X*08*MC**Large Widget Description of Product P01**5*DZ*4.55*TD Baseline Item Data CTT*1 Transaction Totals SE*1*1 End of Segment

  5. XML • eXtensibleMarkup Language • Standard for E-Business • XML provides self-describing information. • Easier to implement or modify than EDI. • Expected to eventually, replace EDI, but not nearly as fast as was expected. • Standardization through RosettaNet efforts

  6. XBRL • Standardized set of tags for financial transaction • Identifies data as being Q3 EBITDA, 2011, for WidgetCo. • No rekeying, fewer errors, easier research • 2009 - SEC required for external reporting, 500 largest public cos. • XBRL.org

  7. Video conferencing • Nothing can go wrong now

  8. Summary • Bullwhip effect: small changes can have huge consequences • Sharing information can be very valuable • Technologies: • EDI, XML, XBRL • Importance of face to face

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