ISQA 407 Introduction to Global Supply & Logistics Management Winter 2012

1. ISQA 407 Introduction to Global Supply & Logistics Management Winter 2012 Portland State University

2. Agenda • Quick review of last class • Return Midterm Exam • McIvor & Humphries Presentation • Lecture • IT systems • E-Procurement • Q&A

3. IT systems • EDI : Several versions of Electronic Data Interchange exist: PO’s, invoices, advance shipment, and backorder status – Very efficient • ERP : Enterprise Resource Planning – includes operations, finance, HR, etc. (SAP, Oracle) • Procurement Systems: AVLs, PO’s, BOM’s • Advanced Planning & Scheduling : Capacity planning across factories What-if” analysis • Transport systems : Analyzes which method is best base on your input of rates and lead-times • Demand Planning : Another “What-if” tool based on historical and future forecasting

4. IT systems • Customer Relationship Management : (CRM) Sales force automation – potential orders and ATP (Siebel) • Supply Chain Mgnt : Where and what throughout the supply chain, Point of Sale Reporting (I-2) • Inventory Systems : Calculate EOQ based on supplier and capacity information • Transport Scheduling : Provided by UPS & Fed-x for tracking and planning • Warehouse systems : Picking orders, shipping, inventory locations, & backlog

5. IT systems – New developments • RFID : Radio Frequency Identification – reads tags and sends signals back for replenishment (VMI) • Allows for real time ATP & POS in channel • Business Process Management : (BPM) allows for projects to be tracked through NPI to production • Simulation Modeling : (I-2) allows for what-ifs through the entire supply chain far upstream

6. System wide ERP ERP software applications used to manage product planning, parts purchasing, inventories, interacting with suppliers, providing customer service, and tracking orders. ERP can also include application modules for the finance and human resources aspects of a business

7. e-Procurement : Information Integration • Reducing costs • Costs can be reduced by leveraging volume, having structured supplier relationships • Visibility of spend • Centralized tracking of transactions enables full reporting on requisitions, items purchased, orders processes and payments made • Productivity • Procurement staff can be released from processing orders to concentrate on strategic sourcing and improving supplier relationships. • Sharing Data • Sales history / forecasts, sales promotions, production schedules, etc • Allows for New Business Models: GPN

8. e-Procurement • Using technology • E-procurement advantages can only be fully realized when the systems and processes to manage it are in place. • Software tools are needed to create the standard procurement documentation: electronic requests for information (e-RFI), requests for proposal (e-RFP) and requests for quotation (e-RFQ). • Controls • Standardized approval processes and formal workflows ensure that the correct level of authorization is applied to each transaction and that spend is directed to draw off existing contracts. • Compliance to policy is improved as users can quickly locate products and services from preferred suppliers and are unable to create maverick purchases.

9. E-Procurement – Global Phenomena • E-Procurement is not a local phenomena but a global one, • Enabled global sourcing of goods and services • Reduction of Costs • Breaking Trade Barriers • Reduction in Agents • Benchmark Report –04 by Aberdeen Group indicates the following • Reduced requisition-to-order cycles by 66% • Cost Reduction : up to 25% or more

10. Requirements • Established buyer-supplier relationship • Supplier oriented marketplace – Based on profiles of customers • Buyer oriented marketplace – e-auctions • B2B intermediary : Amazon , EBay • Asymmetry : Poser is shifting from buyers / sellers to relationships with 3rd parties • Reciprocity : Services in 3rd parties are increasing and complex to deal with • Efficiency : Value added through systems • Stability : enables embedded relationships based on data

11. Cost Reduction Transparency Process Efficiency Core Objectives Of e-procurement Paper less environment Supports Online Reverse Auction New supplier discovery Real Time Monitoring Core Objectives of e-Procurement Streamlining Procurement processes

12. E-MARKETS: IT DESIGN ISSUES • - TECHNOLOGY limitations • Authentication and security • Electronic payment • Software architecture • Embedded Agents and lack of mobility • Scalability • Interoperability

13. eSupplier Report Card (eSRC) • - What is it? • Automation of and increased compliance to the Supplier Ranking and Rating Spec via a web-based tool • - Why is it considered innovative? • Accelerates and automates the overall SRC process • Promotes sharing of metrics (i.e. eSRC templates, questions, etc.) within and/or across teams & orgs • Extends the SRC process to more suppliers & allows input from more stakeholders • Drives spec compliance without requiring detailed knowledge or understanding of the SR&R spec

14. Online Negotiations (formerly eAuctions) • - Description: • An online negotiation capability, allowing real-time bidding by multiple suppliers, within a singular negotiation forum, that utilizes strategy and the Internet to achieve cycle time reduction and the lowest total cost.  • - Innovative features: • Uses Internet technology to create a virtual dynamic marketplace environment, providing real-time bidding info to suppliers on their position relative to the competition. Bids/ RFQ’s were previously a manual process, generally executed through e-mail or snail-mail

15. Online Negotiations Buyer’s Perspective Source : Freemarkets

16. e-Procurement - Cons • Negotiations: • Lose body language and voice inflections • Increases risky behavior, such as aggressiveness or take-it-or-leave-it approaches • Negotiators feel less accountable and are not sure WHO they are negotiating with. • Takes relationship out of the process