Carnegie Mellon University © Robert T. Monroe Management Information Systems Supply Chain Management Systems Management Information Systems Robert Monroe September 8, 2009

Carnegie Mellon University © Robert T. Monroe Management Information Systems Quiz 1.True or false: Improving visibility into the flow of goods is one of the important capabilities of a supply chain management system. 2.According to the textbook, SCM software is often broken down into which two major categories? (pick two): Planning, Visibility, Execution, Negotiation 3.True or false: Logistics management (delivery, transportation, etc.) is an integral component of most enterprise Supply Chain Management systems

Carnegie Mellon University © Robert T. Monroe Management Information Systems A Framework For CRM, ERP, and SCM ‘Your Company’ Source: O’Brien-Marakas, Management Information Systems, 7 th ed.

Carnegie Mellon University © Robert T. Monroe Management Information Systems After Today's Class You Should Be Able To: Explain what a Supply Chain is, and the role that it plays in a business’s operations Explain how a Supply Chain Management System (SCM) can help a business make their supply chains more efficient and effective Identify and explain the core functionality that an SCM typically provides

Carnegie Mellon University © Robert T. Monroe Management Information Systems Supply Chain Management

Carnegie Mellon University © Robert T. Monroe Management Information Systems Lets Talk Supply Chains…

Carnegie Mellon University © Robert T. Monroe Management Information Systems Let’s consider the pen manufacturer PenCo “We Make Pens” PenCo “We Make Pens” … Ink Supplier Metal Parts Supplier Plastic Resin Supplier Ink Cartridge Supplier Customer 1 Customer 2 Customer 3 Customer 4 Customer n …

Carnegie Mellon University © Robert T. Monroe Management Information Systems Supply Chain Management Systems Are cross-functional, inter-enterprise, systems that use IT to help support & manage the links between a company’s key business processes and those of its suppliers, customers, & business partners. The goal of SCM is to create a fast, efficient, & low- cost network of business relationships

Carnegie Mellon University © Robert T. Monroe Management Information Systems Elements Of An SCM System Source: O’Brien-Marakas, Management Information Systems, 7 th ed.

Carnegie Mellon University © Robert T. Monroe Management Information Systems Selected Supply Chain Management Functions Planning Supply chain network design –Optimize network of suppliers, plants, distribution centers Collaborative demand and supply planning –Develop forecasts based on shared forecasts up and down the supply chain –Demand forecasting –Supply availability Execution Materials management –Ordering and fulfillment –Inventory management Transportation/logistics –Commit to delivery schedule –Manage deliveries –Tracking/in-transit visibility Supply event management Supply performance mgmt

Carnegie Mellon University © Robert T. Monroe Management Information Systems Selected SCM Benefits Faster, more accurate order processing Reductions in inventory levels across the supply chain –Smooth, predictable, flow of goods through the supply chain –Reduced inventory costs (improved working capital, turnover) Greater agility Quicker time to market Lower transaction and materials costs Strategic relationships with suppliers –Who benefits from this closer relationship? –Is this always a better deal for the buyer than the supplier?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Dell Case Study Form teams of students to review the Dell case Your team will play a role assigned by the professor Answer the following questions, be prepared to discuss –What decisions relating to Dell’s supply chain do you need to make to do your job on an hourly, daily, weekly, and monthly basis? In steady state, normal business-mode Before, after, and during the strike –What information do you need to provide to make the supply chain run smoothly? To whom? –What information do you need to know about the supply chain to do your job effectively and efficiently?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Why Do SCM Implementations Fail? As with ERP and CRM systems, they tend to be big, complex projects Unlike ERP and CRM, they tend to involve multiple companies (this can radically increase complexity) Failure to properly align all parties interests Lack of proper planning, knowledge, tools, & guidelines Inaccurate or overoptimistic demand forecasts Inaccurate production, inventory, and other data Lack of adequate collaboration

Carnegie Mellon University © Robert T. Monroe Management Information Systems Discussion Questions What role does IT play in making a supply chain efficient? Can you succeed in building an efficient, flexible, high- performing supply chain without huge IT investments? –Will making a large investment in an SCM system guarantee that you have a high performing supply chain? Could a well executed SCM system give a company a sustainable competitive advantage? –Why or why not? Examples? –Does this support or contradict Carr’s claim that IT Doesn’t Matter?