How to Achieve Smart Business Network? Li ZHENG Department of Industrial Engineering Tsinghua University

Outline Business Network in China How to Achieve Smart? Research in Tsinghua

Outline Business Network in China How to Achieve Smart? Research in Tsinghua

Business Network in China Global Procurement in China –Most part of Fortune 500 Companies have established their procurement center in China –Many parties are involved in the procurement process

Case: Wal-Mart Smartness in the business network –Parties in the business network Wal-Mart Supplier … –Long term collaboration is established between different parties Product Design Support Information System Support –The global procurement center is responsible for the coordination of the business network Purchasing department coordinates the whole process Specific departments are charged of collaborating with different parties

Case: ZHONGGUANCUN Science Park AS-IS Business Network –Huge demand for transportation –Huge supply for transportation –Individual client deals with individual forwarder Smarter Business Network –Resource of transportation is better allocated –Demand and supply is aggregated –The transportation process is tracked

Business Network in China Chinese Automobile Industry –There are more than 100 automobile assembly factories, more than 3000 part suppliers in China. –Every automobile manufacturer has about 1000 part suppliers and every part supplier needs to deal with several automobile manufacturers.

Case: Some Automobile Manufacturer Smartness in the business network –Long term collaboration is established between different parties Part suppliers establish JIT warehouses near the automobile assembly factory Whenever there is a demand created, part supplier is responsible for delivering the parts to the production line Production planning of automobile manufacturer is shared with part suppliers Inventory information of part suppliers is shared with automobile manufacturer –The automobile manufacturer is the driving force for the smart business network

Business Network in China Electronic Industry Automobile Industry Logistics Industry E-Marketplace...

Business Challenges That Affect Manufacturing Number of globally distributed manufacturing locations increasing –causing new manufacturing visibility and collaboration needs Mass customization and events needs to be handled jointly –causing manufacturing flexibility challenges Product life cycles dramatically shrinking –causing manufacturing cycle times and productivity challenges Cost pressure continually increasing –causing manufacturing controlling and automation challenges Quality requirements continually becoming more stringent –to reduce mid-and long-term quality costs

Outline Business Network in China How to Achieve Smart? Research in Tsinghua

Business Network Point –Every business entity has its core competence, it needs the supply from some business entities to fulfill the demand of other business entities Connection –The operation of the business network consists of the collaboration between every two business partners. Network Configuration –The leading companies in the business network dominate the operation of the business network

Smartness Smartness in the SBN –Quick Connect & Disconnect –Pick, Plug and Play –Own Business Logic This is the objective! The question is how to make a business network smarter?

Point Every business entity should be smarter –Management Point of View Right Strategy Core Competence Agile Organization High Execution Power … –Technology View Business connection could be established more easily with the help of information technology

Case: Amazon Amazon Web Services –Amazon Web Services provides developers with direct access to Amazon's robust technology platform. Amazon E-Commerce Service –Access product data from Amazon.com, Amazon.fr, Amazon.ca, Amazon.de, Amazon.co.jp, and Amazon.co.uk –Retrieve detailed item information, including prices, images, customer reviews, and more –Earn money using your Amazon Associates account Amazon Historical Pricing Amazon Simple Queue Service …

Connection Three Levels of Collaboration –Information Collaboration Basic information sharing –Process Collaboration Close process integration –Decision Collaboration Collaborative decision making

Case: CPFR CPFR (Collaborative Planning, Forecasting and Replenishment) is a business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demand. CPFR links sales and marketing best practices, such as category management, to supply chain planning and execution processes to increase availability while reducing inventory, transportation and logistics costs.

Connection Kinds of connection –Weak vs. Strong –Short term vs. Long term Static and Dynamic View on the Smartness of Connection

Network Configuration In the network, different points and connections have different level of smartness The dominant companies in the business network leads the smartness of the business network –Toyota puts forward JIT (Just In Time) –Wal-Mart puts forward CPFR (Collaborative Planning, Forecasting and Replenishment) –… Network as a whole Case by case evaluation!!!

What do we miss? Social system

Outline Business Network in China How to Achieve Smart? Research in Tsinghua

Theoretical research –Process modeling/mining –Semantic Web –Service orientated architecture Application –Market Place –DS system for Logistics –Consulting system

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