INTEGRATING FINANCE, ACCOUNTING, MARKETING, INTERNATIONAL BUSINESS INTO SUPPLY CHAIN MANAGEMENT C. Christopher Lee, Ph.D. & Bill Turnquist, CPIM, MBA, Central Washington University, Ellensburg, Washington June 2000

MOTIVATION FOR STUDY Current Focus of SCM - Purchasing, Logistics, Production New Focus of SCM - Accounting, Finance, Marketing, & International Business. Increasing optimization of different companies by incorporating other business functional areas and SCM

MOTIVATION FOR STUDY (continued) Right Time at Right Place: –Mr. Nick Gerde, CFO of Pacific Aerospace Co. in Washington –Dr. Jim Bailey, Chair of Accounting Dept. at Central Washington U. (Will be a new dean of Truman State U.) –2000 APICS E&R Workshop Theme

PURPOSE OF STUDY To develop a framework for integrating Accounting, Finance, Marketing and International Business into SCM. To propose a business curriculum development model. Feedback from industry experts & professors.

A FRAMEWORK FOR INTEGRATING ACCOUNTING INTO SCM

REAL WORLD APPLICATIONS: ACCOUNTING & SCM Nygard International: –Clothing manufacturer –NS2000: Product Development Management System Accurately cost a design before going into production –Automatic Re-order to Sales System

REAL WORLD APPLICATIONS: ACCOUNTING & SCM (continued) Cost Management Group: –Clear focus on the cost of suppliers and supplies –Ability to work a shorter time cycle than the annual budget –Ability to work a proactive cost management process across organizational boundaries

REAL WORLD APPLICATIONS: ACCOUNTING & SCM (continued) Alliance Co.: –Implementation of open books for both supplier and purchaser –Target costing –Common and shared cost reduction activities –Development of the shared balance scorecard integrating accounting with other data

REAL WORLD APPLICATIONS: ACCOUNTING & SCM (continued) Morrison Construction Co.: –Absence of competitive tendering –Open books –Sharing of budgets –Multiple balanced scorecard for performance measurement and monitoring –Shared profits and losses

Top Management (Vision & Strategy) Shareholders Accts Receivable GL P & L Accts Payable PayrollCosting Financial/ Information Customers Suppliers Operations/ Materials Sales S & OP Eng’g MPS?MRP CRP Quality MES Logistics Purchasing Warehouse Employees A FRAMEWORK FOR INTEGRATING FINANCE INTO SCM

Customer Service Push-Pull Strategies New Product Development Shareholder Value Marketing & SCM Benchmarking Forecasting Advertising Pricing A FRAMEWORK FOR INTEGRATING MARKETING INTO SCM

EDI Track Purchase Order System ASDA Customers Warehouse Suppliers Allport Freight ( Import Agent) FOB System FFG Hillenbrand Global Scoring INTEGRATING INTERNATIONAL BUSINESS INTO SCM: A CASE OF ASDA

SUMMARY & CONCLUSION Draft: Preliminary Results Better Understanding of SCM: To enhance the SCM education by gaining a better understanding of how other business functional areas such as Accounting, Finance, Marketing and International Business can be integrated into real world applications.

SUMMARY & CONCLUSION (continued) A Capstone Course: –A business curriculum development model in a university Contributions to SCM Literatures: –Case Studies: Real Life Applications –OM –Accounting, Finance, IB, and Marketing

SUMMARY & CONCLUSION (continued) Future Studies: –Joint research –Empirical Research –Survey of Industry Experts, Educators, & Students, etc. –In-depth Analysis of Real Life Apps. –Integration of E-Commerce into SCM

Most important keys to having an effective supply chain are: –Alliance, Networks, & Collaboration Teaching from the SCM Perspective: –University as a Supplier –Industry Company as a Buyer –Student as a Product SUMMARY & CONCLUSION (continued)

THANK YOU Question & Answer