1. Management Information Systems Islamia University of Bahawalpur Delivered by: Tasawar Javed Lecture 14

2. Overview of Chapter The Role of Information Technology

3. UP-Stream SCM Key activities of upstream SCM are Procurement Upstream logistics Example: Upstream SCM: TESCO Largest grocery retailer in the UK A typical store stocks 50,000 products Over 2,000 suppliers, each of which will supply at most 200 products The Role of Information Technology

4. DateObjectiveSolutionComments 1980sStreamlining store replenishment Goods ordered via Electronic Data Interchange 1989Help Suppliers forecast demand Suppliers sent EDI messages Supplier receives messages detailing Actual store sales Depot stock holdings Tesco’s forecasts 1997Better two-way collaboration Shift responsibility for managing products to suppliers Tesco information Exchange (Tie) allowing suppliers to view EPOS data Suppliers can monitor actual sales in real time (almost), allowing them to identify changes in demand (by product, store and region) and react accordingly 1999More Effective promotions Promotions management module added Suppliers are involved in planning and executing promotions

5. E-Procurement  Procurement covers all the activities needed to obtain items from a supplier: the whole purchases cycle  The purchase cycle Identifying when items are needed, quantity, authority to gain them Finding suitable suppliers Choosing which supplier to order from Agreeing the price or perhaps a range of prices depending on volumes Ordering the goods with the chosen suppliers Receiving goods into the organization Checking the goods are as ordered and handling queries Recording the goods are as ordered and handling registrar as appropriate Storing of goods Receiving, checking, and processing the supplier invoice Paying the supplier according to cash flow/cash discount priorities The Role of Information Technology

6. The benefits of e-procurement Labour cost will be greatly reduced Inventory holding costs will be reduced. Production and sales should be higher as there will be fewer stock- outs because of more accurate monitoring of demand and greater ordering accuracy Production and sales should be higher Other benefits includes: Wider choice of suppliers Greater financial transparency and accountability Greater control over inventories Quicker ordering, making it easier to operate lean or JiT manufacturing Reduce ordering cost Role of IT

7. E-sourcing  Covers electronic methods for finding new suppliers and establishing contracts  Issuing electronic invitations to tender and requests for quotations reduces Administrative overheads Potentially costly errors, as the re-keying of information is minimised The time to respond E-purchasing  Covers products selection and ordering Buy n sell online procurement and reduces overheads through spending less on administration time and cutting down Features: electronic catalogues for core/standard items Recurring requisitions/shopping lists for regularly purchased items Electronic purchase orders despatched automatically through an extranet to suppliers Detailed management information reporting capabilities Role of IT

8. E-Payment  Includes tools such as electronic invoicing and electronic funds transfer. Again e-payment can make the payment processes more efficient for both the purchaser and supplier, reducing costs and errors that can occur as a result of information being transferred manually from and into their respective accounting systems. Potential Risks of e-procurement  Technology Risk  Organizational Risk  No cost saving realised

9. Test your understanding XL travel are a tour operator based in the country’s capital. They run weekly trips to the seaside resort of Black Rock (around 140km away) for four day visit (typically Friday to Monday) The tours are very popular-especially with people aged over 65(who make up over 90% of XL’s customers). The company has traded profitably for many years on the back of premium pricing. But recently profits have started to fall, coinciding with a minority of complaints from regular users. Some users feel that the quality of the trips have fallen and are not up to previous high standards. Other users feel that, whilst XL itself has invested ( with plush new offices, better marketing, more staff, easier booking system etc), this investment has gone on the wrong areas. XL has built up a large cash surplus for further investment. One of the ways that is considering using this cast is to invest and improves its supply chain.

10. Down Stream SCM How E-business affects relationships with customers The following are the main ways in which e-business can affect an organization’s relationship with its customers Tie-in/switching costs. A good e-business arrangement can make customers reluctant to switch supplier. Eg time and effort might have gone into automating most of a customer’s purchase transactions E-commerce can lead to disintermediation Process of Re-intermediation is also found Counter-mediation is where established firms create their own new intermediaries to compete with established intermediaries. Continual updates- products, prices, news Easy, fast, cheap, two way communication User communities- users of some complex products, such as SW Tracking customer internet activity Customer preferences can be acted on Customers can specify precisely the features they might want in their products

11. E-Marketing

12. E-marketing involves extending the original 4Ps of marketing Product Price Promotion and Place to incorporate the following: People/participants Processes Physical evidence

13. 6Is: Benefits over Traditional Marketing Methods

14. CRM There are 4 stages in the customer life cycle: Selection Acquisition Retention Extension IT can play a pivotal role in improving all aspects of CRM

15. Thank you!!! Q&A GOOD LUCK for Your Brilliant Future!!! GOOD LUCK for EXAMS!!!