The INTERNET VALUE CHAIN

Improve Planning, Delivery, Customer Service BUILDING A VALUE CHAIN @ HERMAN MILLER Improve Planning, Delivery, Customer Service Herman Miller eStore

Lean and Green Herman Miller Performance System Based on Toyota Lean Manufacturing System More Inventory Turns, Reduction in Assets Greening of Supply Chain Ongoing Process Corporate Vision Statement Sets Goals 2020 Perfect Vision Statement http://www.hermanmiller.com/about-us/our-values-in-action/environmental-advocacy/our-vision-and-policy.html

Products designed for the Environment Only 4% Non-Recyclable Parts

FROM CHANNEL OF DISTRIBUTION TO VALUE CHAIN

CORE MARKETING PROCESSES SUPPLY CHAIN MANAGEMENT Product Development And Management Customer Relationship Management

VALUE-CREATING ACTIVITIES

Outcomes-Driven Supply Chains Cost: Minimize While Ensuring Customer Service Responsiveness: To Changes in Demand Security: Protect Against External Threats Sustainability: Minimize Environmental Impact Resilience: Identify, React Quickly – Risks, Disruptions Innovation: New Products and Distribution Methods to Meet Customer Needs

Supply Chain visualization Better when seen live http://www.patagonia.com/us/footprint/index.jsp

Managing The Supply Chain

Zara = Fast Fashion Zara’s website doesn’t reflect their supply chain activities. This is an excellent video, but 21 minutes long http://www.supplychainer.com/50226711/supply_chain_video_the_way_zara_operates_its_supply_chain.php This one is only about 1:30 and it makes important points http://www.youtube.com/watch?v=_EAbJfkiwVg

Reducing Supply Chain Costs Information Search Costs Transaction Costs Fragmentation of Customer Markets Standardized Products

Dell’s Direct Model is Lean But No Longer Build to Order

Customers Part of Dell Process

HOW DOES DELL DO IT? Manage Supply Chain as Single Organization Close Customer Relationships Customer Segments Customer Experience and Relationships Cost Control Creates Customer Value Speed and Agility Extensive Metrics in Real Time Targeting Global Growth Above All, Listen to Customers in Many Channels

Benefits Integrated Value Chain Customer Centric Include both Demand Chain, Supply Chain Compete as Extended Enterprise Add Value for Customer Information, Customer Service & Support Specialized Value Propositions for Customers, Segments

Service-Centered paradigm Goods Distribution Mechanisms for Service All Economies Are Services Economies Customer Always a Cocreator of Value Enterprise Can Only Make Value Propositions Service-Centered View Is Customer Oriented and Relational

Do You Agree That All Products, Tangible or Intangible, Are Services In Eyes of Customers? Yes No Don’t Know

Service, Speed & Green

Virtual Value Chain Visibility, Mirroring, Customer Value

INTEGRATING BUSINESS PROCESSES Electronic Data Interchange (EDI) Enterprise Resource Planning (ERP) Web Services

Edi – Paperless Transaction processing Order Entry Generates Electronic PO Order Electronically Transmitted to Seller Order Moves into Seller’s Electronic System Electronic Acknowledgment Sent System Generates Instructions to Ship from Warehouse Electronic Invoice Sent to Purchaser Payment Made by Secure EFT

EDI is ‘OLD TECHNOLOGY’ Pre-dates Internet Requires Proprietary Systems and Value-Added Networks Expensive, Difficult To Use Internet Has Made Somewhat Easier, Less Expensive To Use

ERP- INTEGRATING INTERNAL SYSTEMS Internal Business Process Integration Necessary To External Systems Like EDI Automation and Integration Of All Internal Systems Order Processing, Production Planning & Scheduling, Inventory Control, Distribution, Customer Relationship Management

REASONS FOR ERP Integrate Financial Data into Single Database Customer Order Data Moves Electronically/ Seamlessly Through System Standardize and Speed Up Manufacturing Reduce Inventory Levels Standardize and Make Accessible Human Resources Information

Web services - Software as a service eBay Can Implement Affiliate Relationship, Build Storefront Without Purchasing Software Other Examples of Using Online Software Doing Income Tax Online Using Small Business Accounting Package Online Using CRM (or other) Software on Vendor’s Site

Web Services Offered ‘In the Cloud’ In Addition to eBay, Others Offer Apps in the Cloud Amazon Has Many Web Services Products Salesforce.com CRM and Other Products Cisco Offers Data Management and Other IBM Offers Cloud Development Public and Private There is a lot of good material and the fulfillment video on the Amazon web services site http://www.amazonservices.com/content/fba-world-class-fulfillment-centers.htm?ld=AZMakeMAS If you want another example, Cisco has good info and videos http://www.cisco.com/web/solutions/trends/cloud/indepth.html If you want an egov example, try IBM Great interactive site at http://www-03.ibm.com/innovation/us/thesmartercity/index_flash.html?cm_mmc=agus_brsmartcity-20090929-usbrp111-_-p-_-smcityvan-_-smcityvan#/home/?menuid=transportation

ACCORDING TO ONE EXPERT “We don’t compete as individual businesses any more; we compete as supply chains. The winners aren’t necessarily the companies that have the best products and services, but the ones that have the most efficient supply chains.”

The RFID Future

RFID IN MANY INDUSTRIES Tek Vet has an interesting animal application http://tekvet.com/index.php?option=com_content&view=article&id=5&Itemid=3 Click on Installation > Facility Installation for a good image of a reader The Future Store Initiative, IE 2.2 is still has a good site, but it’s slow to load and full of static images. The most recent video I can find is. You may find it worth the 6 min. http://www.youtube.com/watch?v=UMux6-4tmGw Cow With RFID Chip

BENEFITS OF BUSINESS PROCESS TRANSFORMATION Velocity (speed) Visibility (transparency) Variability (choice) Volume (scale)

Summary Customers > Performance, Reliability, Speed, Convenience Want All of These, But Not Necessarily in that Order Outcome-Driven Integrated Value Chains Provide Lower Cost, Responsiveness, Security, Sustainability, Security, Innovation to Meet Customer Needs Supply Chain Management-Core Marketing Process Multiple Activities in Managing Supply Chain Services Centered Paradigm – All Products > Services Process Integration – EDI, ERP, Web Services (In Cloud) RFID – Old Technology, Multiple New Applications Supply Chain Excellence > Key Competitive Advantage