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Impact of Ecommerce on Global Manufacturing

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Consider a car manufacturing company having four technical centres in four countries. ... an online ordering system in 1998 which gives dealers the option of ... – PowerPoint PPT presentation

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Title: Impact of Ecommerce on Global Manufacturing


1
Impact of Ecommerce on Global Manufacturing
  • Dr Hamid Jahankhani
  • School of Computing and Technology

2
Overview
  • The aim of this presentation initially is to
    review e-manufacturing and to explain the needs
    of business strategies for complete integration
    of all business elements by referring to a global
    manufacturing company, BMWs MINI case study.
  • This presentation then refers to the strategic
    decision making that any Small and Medium size
    Enterprises (SME) should make to adopt a
    technology platform for a new project. The
    reference is made to an on ongoing development to
    provide an integrated business information and
    e-commerce system for a manufacturing company.

3
Introduction
  • Brief history of electronic commerce
  • E-commerce and Internet technologies have enabled
    companies to shift their manufacturing operations
    from the traditional factory integration
    philosophy to a supply chain-based e-factory
    philosophy
  • Ecommerce has transformed companies from a local
    factory focus to a global enterprise and business
    focus and changing the nature of manufacturing
  • E-manufacturing is a system methodology that
    enables the manufacturing operations to
    successfully integrate with the functional
    objectives of an enterprise through the use of
    the Internet and wireless technologies

4
Distributed Multiple Product Development Projects
(DMPDPs)
  • The distributed, collaborative, and adaptive
    planning and control approach for DMPDPs, is a
    representative project environment in a modern
    e-enterprises
  • Consider a car manufacturing company having four
    technical centres in four countries. Every
    technical centre has multiple functional
    divisions internally and the functionality of
    each technical centre is not mutually exclusive
    among the four technical centres. On the basis of
    the company's platform line-up, four basic car
    programs are being carried out simultaneously
    (projects a, b, c and d). Each car platform has
    major-change projects once every 4 years and
    minor-change projects in between, meaning that a
    new project starts every 6 months.

5
Distributed Multiple Product Development Projects
(DMPDPs)(Source Lee Y. and Kumara S. R. T., 2003)
6
E-manufacturing
  • These days large-scale distributed projects are
    very common to see.
  • High marketplace competition has forced the
    modern enterprises to compress their product
    development lead-time
  • Projects have also become ever distributed due to
    economic reasons
  • under these conditions traditional project
    management techniques cannot provide the required
    functionality to react effectively to the changes
    and to support collaborative project management
    processes in distributed project environments
  • The e-manufacturing concept is developed to meet
    the requirements for the complete integration of
    all business processes and systems such as
    e-procurement, Supply Chain Management (SCM),
    Customer Relations Management (CRM), and
    Enterprise Resource Planning (ERP).

7
MINI (BMW) case
  • The BMW production history dates back to 1923.
    The era of globalisation begins in 1992 at
    Spartanburg, South Carolina, where BMW setup its
    first complete manufacturing plant outside
    Germany
  • The strategy behind the scene was the production
    follows the market
  • Though plans, BMW have projected a production
    level of 50,000 vehicles per year in the initial
    stages, 2002 production exceeded 120,000 cars
  • The BMW groups use ecommerce strategies to use
    effective business explore the market.
  • The BMW Group sees ecommerce as both a challenge
    and an opportunity for the entire Company
  • The strategic significance of Ecommerce lies in
    the greater process orientation and networking of
    current structures and processes, with a clear
    focus on the customer.

8
MINI (BMW) case
  • The primary focus is not on cost reduction, but
    rather on benefits, flexibility and quality and
    customer satisfaction
  • The vehicles of the MINI brand have allowed the
    BMW Group to broaden its product range
  • The marketing strategy carried out by BMW, to
    identifying customer groups (Target Markets) and
    tailoring its product offerings, prices,
    distribution, promotional efforts and services
    towards that particular market segment
  • Through continuous process optimisation, the
    product has been developed through to the series
    of stages in only 30 months
  • The BMW Groups production network is
    characterised by agility, the ability to respond
    quickly and flexibly within a changing framework

9
MINI (BMW) case
  • The BMW group introduced an online ordering
    system in 1998 which gives dealers the option of
    showing customers their desired car on the screen
    and confirming the delivery date on the spot
  • The time frame when the vehicle can be built with
    the desired fitting is fixed in few seconds and
    the place in the production process is
    immediately reserved and the manufacturing
    logistic department informed
  • There are more then 10³² variant which is more
    than billion with the product range of BMW group
  • The BMW group has optimised internal processes to
    such a level that changes according to the
    customer wishes regarding engine capacity, colour
    upholstery can be accommodated up to ten working
    days before the start of the production without
    effecting the delivery date.

10
MINI (BMW) case
  • The Assembly takes place on location with
    according to the BMW global quality standards.
  • Currently, the BMW Group production network is
    made up of 15 plants and 8 assembly facilities
    worldwide. Particular abilities of the network
    are the common supply of systems and components
    as well as a high standard of productivity and
    agility.
  • Therefore, BMW, utilises the internet as an
    integral tool for developing superior customer
    relations, through providing an environment
    inclusive, both to existing and potential
    customers, through expressing views and providing
    feedback on product development

11
Remapping manufacturing with . NET Technologies
  • In June 2000, Microsoft announced its .NET
    initiative, a broad new vision for embracing the
    Internet and the Web in the development,
    engineering and use of software
  • One key aspect of the .NET strategy is its
    independence from a specific language or
    platform.
  • .NET enables Web-based applications to be
    distributed to consumer electronic devices, such
    as mobile phones, Handheld PCs and persona1
    digital organizers, as well as to desktop
    computers
  • .NET is also a set of standards, and an operating
    platform, to enable different applications and
    organisations to communicate over the Internet,
    using industry-agreed protocols such as Simple
    Object Access Protocol (SOAP).

12
Integrating ERP with External Applications
  • The local manufacturing company use Syspro
    solution for its ERP system
  • Like most small-medium size enterprises (SMEs),
    this companys IT infrastructure is based on
    Microsoft technology and most (if not all) of the
    software used by the company is either Microsoft
    software or other Windows-based software
  • Being a small company with a Microsoft-centric IT
    infrastructure, this organisation fits the
    profile of a typical .NET adopter

13
Conclusions
  • Those companies which have decided to take a lead
    have taken an evolutionary approach towards
    e-commerce adoption.
  • Ecommerce has transformed companies from a local
    factory focus to a global enterprise and business
    focus and changing the nature of manufacturing
  • Every SME goes through the strategic decision
    making when they adopt a technology platform for
    a new project. The decision making becomes more
    difficult when attempting to integrate business
    information and e-commerce system through an ERP
    system.
  • Consumers of ERP systems are demanding solutions
    that can be easily integrated with Web
    applications in order to provide such services as
    e-commerce to customers and browser-based access
    to remote workers.
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