1 Supply Chain Management Definition an integrative approach, consists of all stages involved, directly or indirectly, in fulfilling customer requests It functions include not only to manufacturing and suppliers, but also transporters, warehouses, retailers, and customers themselves Its efficiency deals with the enforcement of driving components on their new product development, marketing, operations, distribution, finance and customer services (to p2) (to p3)

2 SupplierManufacturingDistributorCustomerRetail Outlet Capacity, inventory level, delivery schedule, payment terms Order, return requests, repair and service requests, payments Supply Chain Management: major entities

3 Supply Chain Management What makes SCM success? –Driving forces Traditional IS for SCM Based on Intranet, whereby it still highly dependent on the EDI technology for information interchange Obstacles Solutions to the problems (to p4) (to p6) (to p7) (to p8)

4 Driving Forces of SCM It driving forces: inventory (raw materials sourcing, WIP, and its finished goods) transportation (logistic of good transferring) facilities (hardware of storage facilities) information (IS systems) These forces are adopted interactively in a decision making process for SCM (to p5)

5 Supply Chain Decision-making Framework Competitive Strategy Supply Chain Strategy Inventory Transportation Information Facilities Efficiency Responsibilities Supply Chain Structure Driving Forces (to p3)

6 SHIPPINGINVENTORY PLANNING & FORECASTING ORDER PROCESSING PRODUCTION PROCUREMENT ACCOUNTING SUPPLIERSCUSTOMERS LOGISTICS SERVICES DISTRIBUTORS INTRANET INTRANET SUPPLY-CHAIN MANAGEMENT An integrative system for an SCM firm (to p3)

7 Obstacles to achieving strategic fitness of SCM 1. Increasing variety of products 2. decreasing product life cycles –increase the uncertainty in supplying of goods 3. increasingly demanding customers 4. fragmentation of supply chain ownership –due to less vertical integrated 5. Globalization - increase competition 6. difficulty executing new strategies (to p3)

8 Changing facet of SCM 1. Adopting E-business concept Overcome the restriction of EDI application (how?) Expansion of worldwide operations Benefits 2. Adopting third party logisticsthird party logistics –Such as services of outsourcing firms –Now most jobs such as distribution logistic, manufacturing, and assemblies may be rendered by TPL firms –The IS dependency of SCM firmsIS dependency (to p9) (to p14) (to p15) (to p16)

9 Revenue Impact of e-Business E-B enhancing the following advantages: –offering direct sales to customers –providing 24-hour access of information from any location –aggregating personalization and customization of information –speeding up time to market –implementing flexible pricing –allowing price and service discrimination –facilitating efficient funds transfer Example 1: Dell Example 2: Amazon (to p8) (to p10) (to p12)

10 Example 1 SCM for Dell Customer Retail Store PC Manufacturing Supplier Customer Dell Supplier Dell Supply Chain Conventional PC supply chain Pull (direct process) (to p11)

11 Impact of E-B on Dell Performance (to p9)

12 Example 2 Amazon.com Customer Retail Store Warehouse Publisher Customer Amazon Distributor Publisher Pull Conventional bookstore supply chain Amazon supply chain Cut short process (to p13)

13 Impact of E-B on Amazon.com Performance (to p9)

14 Concept of TPL Third party logistics, also known as outsourcing logistics, is a concept of which supply chains firms hiring outsource agents to take care of their non-core business activities so they could concentrate on their core-businesses and re- engineering. The adoption of third party logistics has an advantage that outsourcing agents could take charge of daily operations of non-core businesses such as transportation, inventory, assembly, and distribution. Offering value-added services to their clients are also known as some of distinctive features render by third party logistics firms that may otherwise be neglected by supply chains firms. (to p8)

15 IS in SCM Without the TPL - Could be based on the Enterprise Information System that implement through Intranet or e-Business (by internet technology) With TPL -Now based on two systems: 1.The one on the right hand side 2.The e-business system provided by the TPL (reason is that now partial information, such as inventory, delivery status, are controlled by them) (read it from the paper by Chow in my web site) (to p8)

16 SCM in HK Established a logistic center –“Logistics park” –Near airport island, allocated total of 1,255 hectares –Third party logistics park Two logistics centers (south and east commercial district in the about site) –e-commerce logistic center by SEAL (South East Asia Logistics limited) Reserved sq meter site Tseung Kwan O –Major/other obstacles? (to p17)

17 Future researches Topics: What is the strategic impact of e-B technologies on the supply chain How has the Internet impacted supply chain operations, from the procurement of raw materials to productions and distribution of finished goods What performance enhancements and challenges can firms expect by using IT How have online exchanges impacted procurement How has the presence of information brokers impacted information flows How do collaborative ideas and technologies improve supply chain visibility What are the challenges of integrating e-Business technologies into supply chain operations (to p18)

18 Sample References Kajita, H. and Ohta, T., Third party logistics function for constructing virtual company – study of assignments in Japanese business, Journal of Business Logistics, 2, 2001, Vakharia, A.J., e-Business and supply chain management, Decision Sciences, 33(4), 2002, Frohlich, M.T. e-Integration in the supply chain: Barriers and Performance, Decision Sciences, 33(4), 2002, Narasimhan, R. and Kim S.W., Information system utilization strategy for supply chain integration, Journal of Business Logistics, 22(2), 2001,