1. Rita Du Shanghai University
Chapter 6 Supply Chain Management (e-Procurement) and Collaborative Commerce
Rita Du
Shanghai University

2. Overview
Collaborative Commerce and Business Process Reengineering (Value Chain)
Supply Chain and Components of SC
Supply Chain Management
Dell Direct Model
Tesco
Restructuring the supply chain
The virtual value chain
C-commerce
RFID
E-Procurement
British Telecom (BT)

3. Learning Objectives
Identify the main elements of supply chain management and their relationship to the value chain and value networks
Assess the potential of information systems to support supply chain management and the value chain

4. Supply Chain Definitions and Concepts supply chain
The flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers
e-supply chain
A supply chain that is managed electronically, usually with Web technologies

5. Value Chain & Value Networks

6. Supply Chains Upstream supply chain procurement
Supply Chain Components
Upstream supply chain
procurement
The process made up of a range of activities by which an organization obtains or gains access to the resources (materials, skills, capabilities, facilities) they require to undertake their core business activities
Internal supply chain
Value Chain
Downstream supply chain
Distribution Channel

7. Supply Chain Management
supply chain management (SCM)
A complex process that requires the coordination of many activities so that the shipment of goods and services from supplier right through to customer is done efficiently and effectively for all parties concerned.
SCM aims to
minimize inventory levels,
optimize production and increase throughput,
decrease manufacturing time,
optimize logistics and distribution,
streamline order fulfillment,
and overall reduce the costs associated with these activities
“Only 7%of companies today are effectively managing their supply chain. However, these companies are 73%more profitable than other manufacturers. …”
Deloitte & ToucheStudy, October 2003

8. Supply Chain Problems and Solutions
Typical Problems along the Supply Chain
With increasing globalization and offshoring, supply chains can be very long and involve many internal and external partners located in different places
A lack of logistics infrastructure might prevent the right goods from reaching their destinations on time
Quality problems with materials and parts also can contribute to deficiencies in the supply chain
Inventory control and replenishment mechanism
bullwhip effect
Erratic shifts in orders up and down supply chains

9. Supply Chain Problems and Solutions
The Need for Information Sharing along the Supply Chain
EC Solutions along the Supply Chain
Order taking
Order fulfillment
Electronic payments
Managing risk
Inventories can be minimized
Collaborative commerce

10. Supply Chain Problems and Solutions
Integrated Supply Chain Management
Internal integration includes connecting applications with databases and with each other and connecting customer-facing applications (front end) with order fulfillment and the functional information systems (back end)
External Integration with business partners connects an organization’s systems with those of its external business partners

11. Push and Pull Approach to SCM

12. Vertical Integration VS. Vertical Disintegration VS
Vertical Integration VS. Vertical Disintegration VS. Virtual Integration

13. Alternative Strategies for
e-business supply chain

14. SC—Streamlined SC—Restructuring—
Refined Business Model

15. E-Supply Chains e-supply chain management (e-SCM)
The collaborative use of technology to improve the operations of supply chain activities as well as the management of supply chains
The success of an e-supply chain depends on:
The ability of all supply chain partners to view partner collaboration as a strategic asset
A well-defined supply chain strategy
Information visibility along the entire supply chain
Speed, cost, quality, and customer service
Integrating the supply chain more tightly

16. Activities and infrastructure of E-SCM
Supply chain replenishment
E-procurement
The use of Web-based technology to support the key procurement processes, including requisitioning, sourcing, contracting, ordering, and payment.
Supply chain monitoring and control using RFID
Inventory management using wireless devices
Collaborative planning
A business practice that combines the business knowledge and forecasts of multiple players along a supply chain to improve the planning and fulfillment of customer demand
Collaborative design and product development
E-logistics
Use of B2B exchanges and supply webs

17. Infrastructure for e-SCM
Electronic Data Interchange (EDI)
Extranets
Intranets
Corporate portals
Workflow systems and tools
Groupware and other collaborative tools

18. Key Enabling Supply Chain Technologies: RFID P.419
radio frequency identification (RFID)
Tags that can be attached to or embedded in objects, animals, or humans and use radio waves to communicate with a reader for the purpose of uniquely identifying the object or transmitting data and/or storing information about the object.

19. RFID and CPFR as Key Enablers in Supply Chain Management
RFID APPLICATIONS IN THE SUPPLY CHAIN AROUND THE GLOBE
RFID at Metro AG-Germany
RFID at Starbucks
RFID at Deutsche Post (Germany)
RFID in the Federal Government (U.S. Department of Defense)

20. RFID and CPFR as Key Enablers in Supply Chain Management
RFID at Atlantic Beef Products (Ontario, Canada)
RFID at Yodobashi Camera Handles Inventory of About 1 Million Items (Japan)
RFID in Pharmaceuticals
Jeweler Gains Efficiency and Improves Customer Service with RFID (India)
Other Uses

22. RFID and CPFR as Key Enablers in Supply Chain Management
collaborative planning, forecasting, and replenishment (CPFR)
Project in which suppliers and retailers collaborate in their planning and demand forecasting to optimize flow of materials along the supply chain

24. E-Procurement & Benefits
Reduced purchasing cycle time and cost
Enhanced budgetary control
achieved through rules to limit spending and improved reporting facilities
Elimination of administrative errors
correcting errors is traditionally a major part of a buyers workload
Increasing buyers’ productivity
enabling them to concentrate on strategic purchasing issues
Lowering prices through product standardization and consolidation of buys
Improving information management
better access to prices from alternative suppliers and summaries of spending
Improving the payment process
this does not often occur currently since payment is not always integrated into e-procurement systems
Source: Turban, 2000.

25. Collaborative Commerce

26. Collaborative Commerce
collaborative commerce (c-commerce)
The use of digital technologies that enable companies to collaboratively plan, design, develop, manage, and research products, services, and innovative EC applications
collaboration hub (c-hub)
The central point of control for an e-market; a single c- hub, representing one e-market owner, can host multiple collaboration spaces (c-spaces) in which trading partners use c-enablers to exchange data with the c-hub

28. Collaborative Commerce
REPRESENTATIVE EXAMPLES OF COLLABORATIVE COMMERCE
vendor-managed inventory (VMI)
A system in which retailers make their suppliers fully responsible for determining when to order and possibly how much to order
Retailer-Supplier Collaboration
Example: Target

30. Collaborative Commerce
Reducing Transportation and Inventory Costs
Reduction of Design Cycle Time
Reduction of Product Development Time
Elimination of Channel Conflict: Collaboration with Dealers and Retailers

31. Collaborative Commerce
Barriers to C-Commerce
Most organizations have achieved only moderate levels of collaboration because of:
A lack of internal integration, standards, and networks
Security and privacy concerns, and distrust over who has access to and control of information stored in a partner’s database
Internal resistance to information sharing and to new approaches
A lack of internal skills to conduct c-commerce

32. Virtual Organizations Characteristics
“Put simply, it is an organizational form that enables companies to reduce their physical assets(i.e. large headquarters, centralised plants), relying instead on small decentralised units linked by a strong communications network.
The old physical constraints of the plant and office building are broken down, and activities of coordination and control, which used to take place face-to-face, are now handled remotely ‘over the wire’.
Source: M. Warner, 2001.

33. Virtual Organization
Lack of Physical Structure: Little or no physical existence
Reliance on knowledge
the lack of physical facilities and contacts means that knowledge is the key driving force of the VO
Use of communications technologies
VO rely on IT
Mobile work
Reliance on ICT means that traditional office or plant is no longer the only site where work is carried out. Increasingly, the office is whereeverthe worker is
Boundary less and inclusive:
fuzzy boundaries
Flexible and responsive
Vo scan be pulled together quickly from disparate elements, used to achieve a certain business goal and then dismantled