1. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 1 Chapter 8 E-Supply Chains, Collaborative Commerce, and Intrabusiness EC Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99223 USA chen@jepson.gonzaga.edu http://barney.gonzaga.edu/~chen

2. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 2 Learning Objectives 1.Define the e-supply chain and describe its characteristics and components. 2.List supply chain problems and their causes. 3.List solutions to supply chain problems provided by EC. 4.Define c-commerce and list its major types. 5.Describe collaborative planning and Collaboration, Planning, Forecasting, and Replenishing (CPFR), and list their benefits. 6.Define intrabusiness EC and describe its major activities. 7.Discuss integration along the supply chain. 8.Understand corporate portals and their types and roles. 9.Describe e-collaboration tools such as workflow and groupware.

3. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 3 OPENING VIGNETTE : How General Motors Is Collaborating Online The Problem –Information regarding a new car design has to be shared among a pool of approximately 20,000 designers and engineers in hundreds of divisions and departments at 14 GM design labs, some of which are located in different countries –Communication and collaboration with the design engineers of the more than 1,000 key suppliers could mean 4 years to completion of a model

4. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 4 How General Motors Is Collaborating Online (cont.) The Solution –GM began by examining over 7,000 existing legacy IT systems, reducing that number to about 3,000 and making them Web enabled –A computer-aided design (CAD) program that allows 3D design documents to be shared online by both the designers (internal and external) and engineers

5. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 5 How General Motors Is Collaborating Online (cont.) –Collaborative and Web conferencing software tools have radically changed the vehicle review process –GM electronically sends its specifications for the seat to the vendor’s product data system allowing: Searching Designing Tooling Testing in real time –This expedites the process and cuts costs by more than 10%

6. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 6 How General Motors Is Collaborating Online (cont.) The Results –It now takes less than 18 months to bring a new car to market –The change has produced enormous savings –Shorter cycle time enables GM to bring out more new car models more quickly, providing the company with a competitive edge

7. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 7 How General Motors Is Collaborating Online (cont.) What we can learn… –Applications of EC that help reduce costs and increase profits collaborative commerce improvements along the supply chain B2E

8. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 8 End of the Vignette

9. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 9 8.1 E-Supply Chains` The success of organizations (private, public, and military) depends on their ability to manage the flow of materials, information, and money into, within, and out of the organization –Such a flow is referred to as Supply chain involves activities that take place during the entire product life cycle including the movement of information, money and individuals involved in the movement of a product or a service supply chain

10. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 10 The Product Life Cycle Introductory Stage Growth Stage Maturity Stage Decline Stage Total Market Sales Time Total Market Profit N

11. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 11 E-Supply Chains (cont.) Supply chain: E-supply chain: A supply chain that is managed electronically, usually with Web technologies N The flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers

12. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 12 E-Supply Chains (cont.) Supply chain parts –Upstream supply chain activities of a manufacturing company with its suppliers (1 st tiers) and their connections to their suppliers (2 nd tiers) –Internal supply chain in-house processes for transforming the inputs from the suppliers into the outputs –Downstream supply chain activities involved in delivering the products to the final customers procurement is the major activity major concerns are production management, manufacturing, and inventory control attention is directed at distribution, warehousing, transportation, and after-sale service

13. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 13 E-Supply Chains (cont.) (Suppliers) (Distributors/ Customers) (Firms)

14. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 14 The Value System: Interconnecting relationships between organizations Upstream value Firm value Downstream value N

15. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 15 E-Supply Chains (cont.) Managing 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: N 1.The ability of all supply chain partners to view partner collaboration as a strategic asset 2.Information visibility along the entire supply chain 3.Speed, cost, quality, and customer service 4.Integrating the supply chain segments more tightly

16. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 16 E-Supply Chains (cont.) E-supply chain consists of six processes: 1.Supply chain replenishment 2.E-procurement 3.Collaborative planning 4.Collaborative design and product development 5.E-logistics 6.Use of B2B exchanges and supply webs N

17. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 17 E-Supply Chains (cont.) Major infrastructure elements and tools of e-supply chains are: –Extranets –Intranets –Corporate portals –Workflow systems and tools –Groupware and other collaborative tools –EDI and EDI/Internet N

18. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 18 8.2 Supply Chain Problems and Solutions Typical problems along the supply chain 1.Slow and prone to errors because of the length of the chain involving many internal and external partners 2.Large inventories without the ability to meet demand Incorrect demand forecasting 3.Insufficient logistics infrastructure Vehicle failures to road conditions 4.Poor quality

19. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 19 Supply Chain Problems (cont.) : Erratic shifts in orders up and down supply chains –Creates production and inventory problems –Stockpiling can lead to large inventories Effect is handled by information sharing - N collaborative commerce (c-Commerce) Bullwhip effect

20. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 20 Supply Chain Solutions Major solutions provided by an EC approach and technologies 1.Order taking 2.Order fulfillment 3.Electronic payments 4.Inventories can be minimized 5.Collaborative commerce

21. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 21 8.3 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 (e.g., GM opening case)

22. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 22 Collaborative Commerce (cont.) Major benefits (on organizations’ performance) are: As a result of: –fewer stock outs –less exception processing –reduced inventory throughout the supply chain –lower materials costs –increased sales volume –increased competitive advantage cost reduction, increased revenue, better customer retention

23. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 23 (Linear)

24. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 24 (Inter-networked)

25. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 25 Collaborative Commerce ( cont.) Information sharing between retailers and suppliers: P&G and Wal-Mart –Wal-Mart provides P&G access to sales information on every item P&G makes for Wal- Mart –Accomplished done electronically P&G has accurate demand information Wal-Mart has adequate inventory –How?

26. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 26 Exhibit 8.3 Collaborative Commerce Example: Target’s Extranet (an example, this model can be also employed to other apps) Web Applications Customer service Portal services Inventory management Quality assurance Supply chain Process design New products Budget control E-procurement Public Internet GE Private VAN Connection Via VPN, encryption Global reach added Private line Secure Security Access control Registration Authentication Digital signature Certification GE InterBusiness Partner extranet Legacy System EDI ERP

27. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 27 Collaborative Commerce (cont.) Collaborative commerce and knowledge management –Knowledge management : –Gathering and making available experts’ opinions, as well as providing them to partners –Learning is also facilitated by KM C-commerce is essentially an integration of KM, EC and collaboration tools and methodologies that are designed to carry out transactions and other activities within and across organizations. the process of capturing or creating knowledge

28. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 28 Collaborative Commerce (cont.) Barriers to c-commerce: –technical reasons involving integration, standards, and networks –security and privacy concerns over who has access to and control of information stored in a partner’s database –internal resistance to information sharing and to new approaches –lack of internal skills to conduct collaborative commerce –Organizational culture shock: trust lack of defined and universally agreed-on standards

29. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 29 8.4 Collaborative Planning and CPFR In collaborative planning, business partners—all have real-time access to point- of-sale order information –manufacturers –suppliers –distribution partners –other partners What is CPFR?

30. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 30 Company decides on participating suppliers Company decides on participating suppliers Agreement on scope of collaboration Agreement on scope of collaboration Examine the value chain Examine the value chain Selection of Supporting software (e.g., JDA software) Selection of Supporting software (e.g., JDA software) Develop jointly the forecasts, resolve forecasts’ exceptions Develop jointly the forecasts, resolve forecasts’ exceptions Use result to make inventory and scheduling decision Use result to make inventory and scheduling decision Determine on specific project (e.g., demands forecast logistics forecast) Determine on specific project (e.g., demands forecast logistics forecast) Exhibit 8.5 The Collaborative Planning CPFR Process

31. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 31 8.5 Internal Supply Solutions, Intrabusiness, and B2E EC: E-commerce activities conducted within an organization (B2E): Intrabusiness EC in which an organization delivers products or services to its employees Intrabusiness Business-to-employee

32. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 32 Internal Supply Solutions, Intrabusiness, and B2E (cont.) Activities between business units –Large corporations consist of independent units, called strategic business units (SBUs)—transactions can be easily automated and performed over the organization’s intranet –Special network may be constructed to support communication, collaboration, and execution of transactions Activities among corporate employees –A system by which employees can collaborate on an individual (sometimes nonbusiness) level –Via classified ads, corporate equipment may be sold to employees for private use

33. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 33 8.6 Integration along the Supply Chain Enabling integration and the role of standards and Web services –Integration involves connectivity, compatibility, –Applications, data, processes, and interfaces must be integrated –Middleware, standards and protocols have been developed to facilitate (ease) integration security, andscalability

34. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 34 8.7 Corporate (Enterprise) Portals Corporate (enterprise) portal: Corporate portals offer employees, business partners, and customers an organized focal point for their interactions with the firm A gateway for entering a corporate Web site, enabling communication, collaboration, and access to company information

35. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 35 Corporate (Enterprise) Portals (cont.) Types of corporate portals 1. portal for suppliers portal for customers portal for employees supervisor portals mobile portals—accessible via mobile devices, especially cell phones and PDAs Generic portals

36. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 36 Corporate (Enterprise) Portals (cont.) 2. Functional portals – : Portals that store data and enable users to navigate and query these data – : Portals that allow collaboration Information portals Collaborative portals

37. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 37 Corporate (Enterprise) Portals (cont.) Justifying portals –Offer a simple user interface for finding and navigating content via a browser –Improve access to business content and increase the number of business users who can access information, applications, and people –Offer access to common business applications from anywhere –Offer the opportunity to use platform-independent software

38. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 38 8.8 Collaboration-Enabling Tools: From Workflow to Groupware Workflow: The movement of information as it flows through the sequence of steps that make up an organization’s work procedures Workflow systems: Business process automation tools that place system controls in the hands of user departments to automate information processing tasks Workflow management: The automation of workflows, so that documents, information, and tasks are passed from one participant to the next in the steps of an organization’s business process

39. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 39 Collaboration-Enabling Tools: Workflow (cont.) Three major categories of workflow applications: – project-oriented and collaborative types of processes goal: to empower knowledge workers – mission-critical, transaction-oriented, high-volume processes goal: to improve productivity and quality of BP. – cross between collaborative and production goal: to reduce clerical costs in systems with a low volume of complex transactions. Collaborative workflow Production workflow Administrative workflow

40. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 40 Collaboration-Enabling Tools: Workflow (cont.) Benefits of workflow management systems –Improved control of business processes –Improved quality of services –Lower staff training costs –Lower management costs –Improved user satisfaction

41. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 41 Collaboration-Enabling Tools: Groupware Groupware: Provide a way for groups to share resources and opinions Groupware technology products are fairly inexpensive and can be easily incorporated into existing IS. Software products that support collaboration, over networks, among groups of people who share a common task or goal

42. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 42 Collaboration-Enabling Tools: Group Decision Support Systems (GDSS) Electronic (Virtual) meetings: Online (Web-based) meetings whose members are in different locations, frequently in different countries Group decision support system (GDSS): An interactive computer-based system that facilitates the solution of semistructured and unstructured problems by a group of decision makers

43. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 43

44. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 44 Task Environment User The DSS Software System DBMS MBMS DGMS Components of the DSS DBMS: DataBase Management Systems MBMS: ModelBase Management Systems DGMS: DialoGue Management Systems Multiple participants (the legislators)

45. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 45 Components of GDSS HARDWARE PROCEDURES SOFTWARE PEOPLE

46. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 46 Burr-Brown GDSS session room Facilitator’s station Participants’ stations

47. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 47 Framework: Group Decision Support Duration of Decision-Making Session N

48. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 48 Figure: A Model of a GDSS Electronic Brainstorming (generate ideas) Issue Analyzer (organize and sort the comments) Topic commentor (examine each of the divisional 5- year plans) #9 Voting

49. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 49 Teleconferencing

50. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 50 Training room USAF Fusion center DSS Decision centerAirline InstituteUSAF Air Staff Innovation center Teleconferencing

51. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 51 Collaboration-Enabling Tools: GDSS (cont.) Major characteristics of a GDSS –Its goal is to support the process of group decision makers by providing automation of subprocesses using information technology tools –It is a specially designed information system, not merely a configuration of already-existing system components. –It encourages generation of ideas, resolution of conflicts, and freedom of expression

52. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 52 GDSSs improve the decision-making process by: –providing structure to the planning process –support parallel processing of information and idea generation –make larger meetings possible Collaboration-Enabling Tools: GDSS (cont.)

53. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 53 Decision Support and Intelligent Systems Different Place Same Place Web-based GSS Whiteboard Email, V-mail Workflow management system Document sharing Computer conferencing with memory Web-based GSS Whiteboard Document sharing Videoconferencing Audioconferencing Computer conferencing Email, V-mail Same Time GSS in a Decision Room Web-based GSS Workflow management system Document sharing Email, V-mail GSS in a Decision Room Web-based GSS Multimedia Presentation Systems Whiteboard Document sharing Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson, 6th edition. Different Time

54. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 54 Collaboration-Enabling Tools (cont.) Real-time collaboration (RTC) tools help companies bridge time and space to make decisions and collaborate on projects by supporting synchronous communication of graphical and text-based information Interactive white boards Screen sharing Virtual reality (VR): System that delivers interactive computer generated 3D graphics to a user through a head-mounted display

55. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 55 Collaboration-Enabling Tools (cont.) Implementation issues –An effective collaborative environment is necessary –Connecting collaborative tools with file management products on an organization’s intranet is necessary –Protocols to change the read-only Web to a truly collaborative environment

56. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 56 Intelligence Activities  Search for and identify conditions requiring a decision  Information systems should scan the internal organization and the external environment and help identify problems and opportunities.  Develop and evaluate alternative courses of action  Information systems should help generate and evaluate decision alternatives. Choice Activities Design Activities  Select a course of action and monitor its implementation  Information system should help emphasize and prioritize decision alternatives and provide feedback on the implemented decision A model of the decision making process. (Simon’s 3+1 Phases)  Implement and monitor the success of the decision  Information system should provide feedback on the implemented decision. Implementation Activities

57. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 57 Managerial Issues 1.How difficult is it to introduce e- collaboration? 2.How much can be shared with business partners? Can they be trusted? 3.Who is in charge of our portal and intranet content? 4.Who will design the corporate portal? 5.Should we conduct virtual meetings?

58. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 58 Summary 1.The e-supply chain, its characteristics, and components: Digitized and automated flow of information throughout the supply chain and managing it via the Web 2.Supply chain problems and their causes: access to inventories, lack of supplies when needed, need for rush orders, deliveries of wrong materials or to wrong locations, and poor customer service. 3. Solutions to supply chains problem provided by EC: automate/expedite order taking, speed order fulfillment, provide e-payments, control inventories, provide for correct forecasting and scheduling, and improve collaboration among partners

59. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 59 Summary (cont.) 4.C-commerce: Definitions and types: planned use of digital technology by business partners. 5.Collaborative planning: concentrates on demand forecasting and on resource and activity planning along the supply chain. CPFR: business strategy that develops standard protocols and procedures for collaboration 6.Intrabusiness: all EC initiatives conducted within an organization.

60. Dr. Chen, Electronic Commerce  Prentice Hall & Dr. Chen, Electronic Commerce 60 Summary (cont.) 7.Intrabusiness: all EC initiatives conducted within an organization. 8.Integration along the supply chain: critical to the success of companies. 9.Types and roles of corporate portals: for suppliers, customers, employees, and supervisors. 10.Collaborative tools: workflow, groupware, GDSS, devices that facilitate product design