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Welcome!. dp&c. research. “Education in Pursuit of Supply Chain Leadership”. dp&c. research. D ISTRIBUTION P LANNING AND C ONTROL R ESEARCH. e- B USINESS AND ITS R OLE IN THE S UPPLY C HAIN. Meet David F. Ross, PhD, CFPIM. 13 Years Manufacturing and Distribution Industries

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  1. Welcome! dp&c research

  2. “Education in Pursuit of Supply Chain Leadership” dp&c research DISTRIBUTION PLANNING AND CONTROL RESEARCH e-BUSINESS AND ITS ROLEIN THE SUPPLY CHAIN

  3. Meet David F. Ross, PhD, CFPIM • 13 Years Manufacturing and Distribution Industries • 17 Years MRP II, ERP, Enterprise Business Systems • CPIM (1988), CFPIM (1996) • 6 Years APICS CPIM Instructor • 1991 Romey Everdale Award • 3 Books on SCM/Logistics -Foundation Book for MPR CPIM Exam Meet Your Session Leader

  4. Goals and Objectives • A Broad, Executive Introduction to e-Business • Nature of Today’s Competitive Environment • Defining e-Business Terms • Four Phases of e-Business • Today’s Technology Toolsets • Benefits of e-Business Summary of Session Goals and Objectives

  5. What Has Happened To e-Business? 1999 – Estimates Rise and Fall of the “New Economy”: • Business-to-Consumer (B2C) would exceed$450 billionby 2004 • Business-to-Business (B2B) would exceed$5 trillionby 2004 • Companies would spend$1.7 trillionin technology just to get in the game If you were not trading through the Web you would be “Amazoned” or “Enroned” and sink into irrelevance!

  6. What Went Wrong? • Over-excessive optimism • Technologies that were not yet ready • Problems with connectivity and interoperability • Huge infrastructure cost • Invalid business models and faulty practices • Risk, risk, and more risk! e-Business Post-Mortem:

  7. Internet Is Here To Stay! • Changes in technology infra-structures and interoperability • Expanding Usage and Popularity • Utilization by software developers • Declining costs • End of hype – growth of real productivity Key Indicators:

  8. The Business World Has Changed • Power of the customer demanding personalization, super service, convenient solutions, product and service customization, low cost • Abandonment of strategies based on the vertical integration of resources • Explosion in global trade and outsourcing has changed the basics of competition Key Drivers of Business and Technology Today:

  9. The Business World Has Changed • Companies need to be agile, lean, efficient, and more responsive to the customer, spawning virtual organizations and interoperable processes • Product cycle management that requires leveraging collaborative supply chain relationships • The Internet has truly revolutionized everything – the supply chain is the medium for competitive advantage Key Drivers of Business and Technology Today:

  10. Conventional Supply Chain Serial flow of goods and information through the Supply Chain

  11. The Bull Whip Effect Chained Pairs Relationship Model:

  12. Today’s Networked Value Stream Customer-focused, collaborative, agile, scalable, fast flow, digitized networks Fulfillment Supplier Customer Supply Chain Ecosystem Supplier Internet Linkages Supplier Enterprise Boundaries Core Company Enablers Demand Customer Supplier Customer Functions Supply Functions Supplier Digital Data Supplier Customer Supply Chain Ecosystem Supplier

  13. Defining Terms • e-Business An inclusive term used to describe all of the business relationships driven by and operating with the Internet Defining Key e-Business Terms: • e-Commerce Refers to the process of performing transactions utilizing the Internet • e-Fulfillment Activity of physically delivering products and services placed in the network supply system through e-commerce transactions

  14. Defining Terms (cont.) • Business-to-Business (B2B) Use of Internet, e-commerce applica-tions that enable companies to sell goods and services to other businesses Defining Key e-Business Terms: • Business-to-Consumer (B2C) Use of internet, e-commerce applica-tions that enable companies to sell goods and services directly to the customer • e-Procurement Automation and integration of the purchasing process through the use of Internet B2B trading exchanges

  15. Defining Terms (cont.) • Collaborative Commerce A business strategy that seeks to utilize Internet technologies to enable closer collaboration and interoper-ability of channel network partners Defining Key e-Business Terms: • Trading Exchanges e-Marketplaces Web sites (both private and public) focused on optimizing, synchronizing, and automating selling, buying, and fulfillment.

  16. Four Phases Of e-Business

  17. I-Marketing Goal: Provide information about company product/service wrap through the Internet Leveraging the Web for Marketing Products and Services: Characteristics: • Brochureware: information browsers • Static text and graphics • Access to printed product/service publications • Catalogs and pricing • Not transaction capable • No interaction possible with the customer

  18. e-Commerce Storefront Goal: Provide customers with ability to buy and sell using the Internet Performing Transactions and Interaction Using the Web: Characteristics: • Web-site personalization, self-service, interactive shopping carts, bid boards, credit card payment, on-line communities • Budding and auctioning • e-Tailing and consumer portals • Consumer care/customer management • Web-site branding • Electronic bill payment

  19. e-Business Marketplaces Goal: The transaction of products and services between businesses (B2B) Performing Business-to-Business Transactions: Characteristics: • Resembles traditional business purchasing: long-term, symbiotic, and relationship based • Uses e-Commerce functions and business transaction types • Focused on the use of trading exchanges • Used for MRO purchasing • Slow expansion to production inventory purchasing

  20. Types Of Exchange • Independent Exchange A many-to-many marketplace composed of buyers and sellers networked through an independent intermediary Three Types of Trading Exchange • Private Exchange A closed marketplace dominated by a channel master composed of internal business units and preferred business partners linked by a single point of contact, coordination, and control • Consortium Exchange A some-to-many marketplace consisting of a few powerful companies organized into a consortium and their trading partners

  21. e-Collaboration Marketplace Goal: The enablement of value chains based on collaborative and synchronized supply channel networks Using the Internet to Activate the Supply Chain: Characteristics: • Activation of interoperable business systems • Expansion beyond transaction management to true collaboration • Provide for greater supply chain visibility and connectivity • Communication of forecasts, inventories, capacities, and supply chain events

  22. e-Marketplace Regions Complexity of Internet Connection

  23. e-Marketplace Regions • Basic B2B Commerce Provides marketing information and transaction functions via the Web – tactical advantage Three Regions of e-Collaboration Market-places: • Supply Chain Management • Collaborative Channel Management: serve customers with different value, and link supplier selection and transportation visibility with customer service functions • Collaborative Inventory Management: provide inventory visibility beyond supplier chained-pairs

  24. e-Marketplace Regions (cont.) • Supply Chain Collaboration • Collaborative Forecasting and Replenishment: real-time broadcasting of demand across the supply chain • Collaborative Product Commerce: deployment of cross-channel teams of developers and engineers to accelerate the time from product conception to product roll-out • Collaborative Strategic Planning: provide for the development of channel vision and strategy Three Regions of e-Collaboration Market-places:

  25. Today’s Technology Toolsets Enterprise Boundary Supply Chain Management EDI E-Finance Data Warehouse 1. Channel capability-to-promise 2. Collaborative planning 3. Supply chain event management 4. e-Logistics 5. Message-centric visibility 6. Inbound WMS/TMS Financials Logistics CRM ERP System Sales & Marketing Procure- ment B2B e-MRO Productive Resources Manu- facturing 1. e-Selling/e-Service 2. CPFR 3. Sales force automation 4. Collaborative demand planning 5. e-Product configuration 6. POS integration 7. Data Warehousing 8. Outbound WMS/TMS Portals APS CPC e-Business Universe

  26. e-Business Enablers & Benefits Channel Benefit Channel Function Technology Enabler Channel Supply Management Multi-partner ERP data integration EDI, Web-driven synchronized channel requirements Collaborative supplier base B2B exchanges e-Logistics/4PL services Reduced inbound channel inventories and total costs Alignment of channel demand/ supply Direct feed of requirements data into ERP backbone Metrics for event notification and exception management Product and Service Processing Collaborative product and service wrap design Collaborative planning, CPFR initiatives Collaborative supplier base e-Procurement initiatives Capacity optimization Flexible/agile manufacturing Alignment of demand with material planning Supply chain visibility Minimize channel inventories

  27. e-Business Enablers & Benefits Channel Benefit Channel Function Technology Enabler Channel Customer Management e-CRM Data Warehousing e-Service/Call centers Marketplace metrics Real-time, digital customer demand feedback Proactive e-Relationships Market of one Responsible and reliable fulfillment channel functions Mass customization Channel demand transparency Channel Support Activities e-Logistics/4PL services Customized delivery channels “Real options” management XML, Java, wireless communications technologies Interoperable IT platforms Better utilization of channel assets Effective channel decision- making Responsive and reliable fulfillment channel functions Scaleable channel aligned with actual demand

  28. e-Marketplace Regions (cont.) • Increased market supply and demand visibility • Price benefits from increased competition • Increased operational efficiencies • Improved partner and customer segmentation • Improved supply chain collaboration • Synchronized supply chains Today’s e-Business Marketplace Benefits:

  29. What’s Next • Terrorism, war and recession has hurt e-business • The hype and empty promises have soured the concept • Continued requirements for cost management and workflow efficiencies • Continued push for supply chain partner collaboration • Technology advancements for interoperability and low cost Future of e-Business:

  30. What’s Next • Heavy focus on the procurement side • Growing power of PTXs and CTXs • Growth of a portfolio concept to e-business and trading exchanges • Power of e-Differentiation Future of e-Business:

  31. e-Business Enablers & Benefits e-Business Enabling the Supply Chain Universe

  32. Thanks For Attending! dp&c research

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