Supply Chain Management &
eCommerce Technology
presented by:
Nachiappan Annamalai
Overview
• Supply Chain Management - Whazzit• SCM today - Problems• Solutions - e-Commerce• Examples of present systems -
tradematrix.com - i2 Technologies• e-Commerce - Application to SCM -
Framework• Future of SCM & e-Commerce• Suggestions
World Internet Population 3/99
• World Total 158.50 MILLION
• Africa 1.14 million
• Asia/Pacific 26.97 million
• Europe 36.55 million
• Middle East .88 million
• Canada & USA 88.33 million
• South America 4.63 million
Effective SCM involves
• Managing Supply Chain as a single entity• Recognizing end user service requirements
Customer Utility = f(time, quantity, place)• Recognizing time as basis of competitive
advantage• Effective use of Inventory• Continuos Improvement
Time Involved in the Process
Effects of Time Consuming SCM
• Excessive Inventory - $ 30 Billion ( Grocery Supply Chain alone) • Poor Product forecast• Poor Capacity Planning• Poor Customer Service• High Corrective Costs - Overtime, Subcontracting, Trans. Prob.• Optimized Supply Chain as a Whole entity - Not Possible• Internationalization - Not possible
Distribution
Other Problems
• Demand Forecast Updating• Order Batching• Price Fluctuation• Shortage gaming
Demand Forecast Updating
• Amplification of Fluctuation when ones goes up the Supply Chain
• Lead Time importance
Order batching
• Orders in Batches - Compulsion
- Time & Cost Constraints
- Transportation Problems - FTL - Full Truck
Load• Overlapping of Order Cycles - Leads to more
variability• MRP Jitters
Price Fluctuations
• Forward Buy• Role of Price Fixing - Erratic Demand• Variation in Buying Quantity is much bigger
than the variation of the Consumption rate
Shortage Gaming
• Phantom Orders - When & Why does it Occur• Examples
- Motorola and its Distributors
Air touch Communication & Baby Bells
- IBM Aptiva Model - Assumption of Retailers
Counteractions
• One and only best Solution
E-Commerce
- Information Sharing
- Channel Alignment
- Operational efficiency
- Intelligent Optimization Agents
- Transaction Processing
- Money Transactions
I2 Technologies - Tradematrix.com
an efficient SCM e-Commerce system
Services the System Provides
• Direct & Indirect Procurement• RFQ - (Request for Quote) Collaboration• Demand Collaboration• Holisitic Customer Management• Buyer & Seller Services• Service Providers• Marketing Services
Tradematrix.com - Framework
• Front end
- Portal
- Customer Management
- Communication Systems
- Money Transactions• Back end
- Optimization
- Transaction Processing System
The Process of Commerce
• Buyers and sellers find each other– Communication: advertising and marketing– Intermediaries (dealers, distributors, reps)
• Negotiation– Agents (buyers, lawyers)
• Transaction– Contract– Payment (or many payments)
The Process of Commerce
• Order fulfillment– Manufacture– Delivery
• Post-sale events– Customer service – Reorder, restock
• Accounting– Are we making a profit?
• Data analysis– Who’s buying the stuff?
The eCommerce Process
• Transaction– Transaction processing, Databases– Electronic Payment Systems,– Computer Security,– System Reliability
• Order fulfillment– Manufacture (manufacturing systems)– Delivery (tracking systems)
eCOMMERCE TECHNOLOGY
• Networks • Security• Internet • Electronic payment• Programming • Search engines• Multimedia • Intelligent agents• Databases • Data mining• Transaction
processing
The eCommerce Process
• Which of the steps are “bittable”?• Buyers and sellers find each other
– Communication (via Networks, the Internet, Programming and Information Retrieval)
– Human-Computer Interaction, Multimedia– Intermediaries
• Disintermediation• Negotiation
– Electronic Negotiation, Intelligent agents
The eCommerce Process
• Post-sale events– Customer Service and Help Facilities – Reorder, restock
• Accounting– Transaction processing– Interoperability between online and legacy
systems• Data analysis
– Data Mining
Ideal e-Business System
• Front End
- Portal
- Communication Systems - Interface with Mobile Devices & GPS - for access to real time info.
- Money Transaction
- Customer Management Systems• Back End
- Optimization
- Decision Support Systems & Intelligent Agents
- Transaction Processing System
- Prioritizing Systems - Shows Contradictions
- Forecasting System with Responder- Capability to match System Dynamics
Manufacturing Services
• Front End System Functions
- Product Design & Quality Specification
- Customer Management & Communication System
- Money Transactions• Back End
- Standard time & Least Cost
- Supply Time
- Optimization
- CNC Machine Code Conversion
- Route data to CNC Machine would lead to total automation - paperless industry