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Title: Definition of supply chain and supply chain mgmt and goals


1
9
Chapter
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
2
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
LEARNING OBJECTIVES
  • Demonstrate how enterprise systems achieve
    operational excellence by integrating and
    coordinating diverse functions and business
    processes in the firm.
  • Demonstrate how supply chain management systems
    coordinate planning, production, and logistics
    with suppliers.

3
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Enterprise Systems
  • What are enterprise systems?
  • Enterprise software
  • Best practices
  • Business value of enterprise systems

4
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Enterprise Systems
How Enterprise Systems Work
Enterprise systems feature a set of integrated
software modules and a central database that
enables data to be shared by many different
business processes and functional areas
throughout the enterprise.
Figure 9-1
5
Enterprise IS applications
  • Why the need for supply chain management
  • What are supply chains and supply chain
    management systems (SCMS)
  • Benefits
  • Information systems SCMS

6
Paradigm shift how to compete
  • One of the most significant paradigm shift of
    modern business management is that individual
    businesses no longer compete as solely autonomous
    entities, but rather as supply chains.

7
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
Nikes Supply Chain
This figure illustrates the major entities in
Nikes supply chain and the flow of information
upstream and downstream to coordinate the
activities involved in buying, making, and moving
a product. Shown here is a simplified supply
chain, with the upstream portion focusing only on
the suppliers for sneakers and sneaker soles.
Figure 9-2
8
Management Information Systems Chapter 9
Achieving Operational Excellence and Customer
Intimacy Enterprise Applications
Supply Chain Management Systems
Push- Versus Pull-Based Supply Chain Models
The difference between push- and pull-based
models is summarized by the slogan Make what we
sell, not sell what we make.
Figure 9-5
9
Enterprise IS applications
  • Why the need for supply chain management
  • What are supply chains and supply chain
    management systems (SCMS)
  • Benefits
  • Information systems SCMS

10
Enterprise IS applications
  • Why the need for supply chain management
  • What are supply chains and supply chain
    management systems (SCMS)
  • Benefits
  • Information systems SCMS

11
Definition- Supply Chain
  • all the activities related to the acceptance of
    an order from an customer and fulfilling it
    (Turban, McLean, and Wetherbe 2001).
  • collection of physical entities, such as
    manufacturing plants, distribution centers,
    conveyances, retail outlets, people and
    information, which are linked together into
    processes supplying goods or services from source
    through consumption (Laudon Laudon 2001)

12
Efficient and Effective
  • In an efficient and effective supply chain, all
    components are integrated and linked from one
    phase to the next and it all flows well.

13
  • Inventory replenishment system triggered by
    customer purchases
  • Best in industry
  • Small inventory costs
  • Allows Wal-Mart to adjust purchases of goods to
    meet customer demands
  • Lowest payout of sales revenue for overhead among
    competitors

14
Goals/Benefits
  • Puts focus on improving service ability to
    customers, improving efficiency,
  • Reducing uncertainty and risks in the supply
    chain
  • Inventory turnover rate
  • Reduce costs (inventory, supply)
  • Increase market share
  • Reduce cycle and lead time

15
Supply Chain Components
  • Upstream supply chain
  • Internal supply chain
  • Downstream Supply Chain

16
Enterprise Information Portals
17
Upstream Supply Chain
  • Includes suppliers and their suppliers
  • For Example a cow farmer and dairy producer

18
Internal Supply Chain
  • Includes all the internal process to turn
    material inputs into final products or services
  • This would include all the steps necessary to
    turn milk and other material inputs, including
    chocolate, wooden Popsicle sticks, cardboard
    boxes, and ice cream into boxes of ice cream bars

19
Downstream Supply Chain
  • Consists of all the necessary components to
    deliver the product to end users
  • This component consists of distributors, grocery
    and convenience stores, advertisers, and the
    local ice cream man

20
Supply Chain Problems
  • Delays in production, distribution etc.
  • Expensive Inventories
  • Lack of partners coordination
  • Uncertainties in deliveries
  • Poor demand forecast
  • Interference with production
  • Poor quality

21
Uncertainty
  • The major problem of the supply chain is
    uncertainty. The major source of the uncertainty
    is the demand forecast which can be influenced by
    the following factors
  • Competition
  • Prices
  • Weather conditions
  • Technological development
  • Customer confidence

22
Delivery Time
  • Another uncertainty that causes problems is
    delivery time. Delivery time may depend on the
    following
  • Machine failures
  • Road conditions
  • Traffic jams, etc.

23
Global Supply Chain Problems
  • Can be very long and complex
  • Possible cross-broader problems
  • Need information technology support of
    communication and collaboration
  • Possible delays due to customs, tax,
    translations, and politics

24
Solutions to the Problems
  • To solve the problems of supply chains there
    must be coordination. Coordination must exist
    between suppliers and manufacturers in order to
    adequately meet the demand of consumers. This
    balance or coordination can be produced by
    eliminating or at least minimizing the
    uncertainties within the supply chain.

25
Removing Uncertainties
  • Many things can be done to improve coordination
    and remove uncertainties within the supply chain
  • Companies can use outsourcing during demand
    peaks instead of trying to do it all themselves.
  • They can also buy rather than make production
    inputs when demand is high.
  • The chain can be configured with optimal
    shipping plans as well as use fewer suppliers.
  • There needs to be a strategic partnership with
    suppliers to gain an advantage over competitors.
  • Companies can use just-in-time approaches so
    small amounts of supplies are delivered when
    needed in order to reduce inventory costs.
  • They can also manufacture outputs only after
    orders are received. Supplier-buyer
    relationships can be improved.
  • The use of e-commerce, the Internet and other
    new developing information technologies can also
    greatly reduce the amount of uncertainties within
    the supply chain.

26
Information Technology Solutions
  • Some IT solutions include
  • Internet application (intranets, extranets)
  • Web based ordering or intelligent agents,
    Automate order taking
  • Electronic Data Interchange (EDI) and Electronic
    payments
  • Make-to-order (JIT)
  • RFID and Tracking systems

27
SCM AND INTERNET-BASED TECHNOLOGIES
  • The explosion of information technology,
    especially the Internet-based technologies, has
    revolutionized the way organizations conduct
    their business and handle relations with their
    different partners.

28
INTERNET-BASED TOOLS
  • The Internet in forms of Intranets and
    Extranets can assist the firms in achieving cost
    reductions and maximizing productivity along the
    supply chain while remaining market-flexible

29
Management Information Systems Chapter 8
Telecommunications, Networks, and the Internet
THE INTERNET
Intranets and Extranets
  • Intranets
  • An intranet is an internal organizational network
    that provides access to data across a business
    firm.
  • The purpose of an intranet is share company
    information with and between employees.
  • An intranet is created on a private local or wide
    area networks and maintained wholly within the
    organization.

30
Management Information Systems Chapter 8
Telecommunications, Networks, and the Internet
THE INTERNET
Intranets and Extranets
  • Extranets
  • An extranet is an intranet that allows controlled
    access by authenticated outside parties.
    Typically an extranet will link the intranets of
    distributed organizations for the purpose of
    conducting business. This secure electronic
    consortium usually consists of an enterprise and
    its key trading partners, customers, dealers,
    distributors, supplies, and contractors (Bayles,
    1998, p.3).

31
SOME ADVANTAGES OF INTRANETS-EXTRANETS
  • Facilitates exchanges of information and funds
    (between the firm and its clients and suppliers)
  • Allows paperless, faster and more accurate
    communication and transactions
  • Increase customers satisfaction ( faster
    transaction recording, faster delivery of
    product)

32
SOME ADVANTAGES OF INTRANETS-EXTRANETS
  • Enterprises have access to all kinds of
    information
  • Firms can better choose suppliers and get better
    deals
  • Companies can reach customers faster and more
    effectively

33
SOME ADVANTAGES OF INTRANETS-EXTRANETS
  • Firms can develop and improve marketing
    strategies, conduct market researches, discover
    new ideas, new techniques and develop new
    products/services, improve the manufacturing
    processes, and much more.

34
Management Information Systems Chapter 12
Managing Knowledge in the Digital Firm
INTELLIGENT TECHNIQUES
Intelligent Agents in PGs Supply Chain Network
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