Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS1 Chapter 11 Objectives How do enterprise systems provide value for businesses? How do supply chain management systems provide value for businesses? –11.1.Enterprise systems (p ) –11.2. Supply chain management systems (p )

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS2 How Enterprise Systems Work ISs that integrate and coordinate key internal processes of the firms, integrating data from different business functions Enables data to be used by multiple functions and business processes for precise organizational coordination and control.

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS3 Enterprise system architecture

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS4 Benefits of Enterprise Systems Firm structure and organization: A more uniform organization Management: More efficient operations and customer- driven business processes –Firm-wide knowledge-based management processes Firm-wide information for improved decision making - Technology: Unified IT platform

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS5 The Supply Chain vs. Supply Chain Management (SCM) Supply Chain A network of organizations and business processes of procuring material, transforming raw materials into intermediate and finished products, and distributing the finished product to customers Materials, information, and payments flow through the supply chain in both directions. Supply Chain Management (SCM) Coordination of business processes to speed information, product, and fund flows up and down a supply chain to reduce time, redundant effort, and inventory costs

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS6 Supply Chain Management Systems

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS7 Supply Chain Processes SCOR (Chain Operations Reference Model) identifies five major supply chain processes: 1-Plan: Balancing demand and supply to meet sourcing, production, and delivery requirements 2-Source: Procurement of goods and services needed to create a product or service 3-Make: Processes that transform a product into a finished state Deliver: Processes to manage order transportation and distribution 5- Return: Processes associated with product returns and post delivery customer support Logistics: Planning and control of all factors that have an impact on the supply chain

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS8 Supply Chain Processes

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS9 Information and Supply Chain Management Problem of supply chain Inaccurate or untimely information causes inefficiencies in supply chain, such as shortages, excessive inventory Objective of supply chain management is to overcome bullwhip effect ( أثر كرة الثلج )bullwhip There are several solution: Just-in-time Just-in-time strategy Scheduling system for minimizing inventory by having: (A) components arrive exactly at the moment they are needed and (B) finished goods shipped as soon as they leave the assembly line

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS10 Bullwhip effect Distortion of information about the demand for a product as it passes from one entity to the next across the supply chain

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS11 Supply Chain Management Applications [need to find useful examples-based on my background _OR] Supply chain management systems Automate flow of information between company and supply chain partners (suppliers, logistics partners) Supply chain planning systems Generate demand forecasts for a product (demand planning) and help develop sourcing and manufacturing plans for that product Supply chain execution systems Manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner E.g. Agility when it delivers product to Jamayyats in Kuwait

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS12 Supply Chain Performance Measurement Metrics for measuring supply chain performance Fill rate (the ability to fill orders by the due date) Average time from order to delivery The number of days of supply in inventory Forecast accuracy The cycle time for sourcing and making a product (total elapsed time to complete a business process)

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS13 Supply Chain Management Systems / Intranets and Extranets for Supply Chain Management

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS14 Supply Chain Management Systems (cont’) Internet-based supply chain management applications: Provide standard set of tools Facilitate global supply chains Reduce costs Enable efficient customer response Allow concurrent supply chains Two types of demand-driven supply chain management: Push & Pull

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS15 Replenish =Refill Push- versus Pull-Based Supply Chain Models

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS16 Supply Chain Management Systems (cont’) Push-based model Production master schedules based on forecasts of demand for products, and products are “pushed” from manufacturer to customers Pull-based model Supply chain driven by actual customer orders or purchases It is also called demand-driven model or build-to-order

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS17 The Future Internet-Driven Supply Chain The model is not any more sequential …Random

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS18 Business Value of Supply Chain Management Systems Improved customer service and responsiveness Cost reduction Cash utilization

Dr K. ROUIBAHChapter 11 (QM 240) / dept QM & IS19 Business Value of Supply Chain Management Systems (cont’)