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Title: ISYS90034 Business-to-Business Electronic Commerce Week 10: Other Supply Chain B2B Technologies and Supply Chain Reengineering


1
ISYS90034Business-to-Business Electronic
Commerce Week 10 Other Supply Chain B2B
Technologies and Supply Chain Reengineering
  • Dr. Sherah Kurnia

2
Reading Material
  • Johnston, R.B. (2000), Principles of Digitally
    Mediated Replenishment of Goods Electronic
    Commerce and Supply Chain Reform, Electronic
    Commerce Opportunities and Challenges, Hershey,
    Idea Group Publishing, pp 41-64.
  • Johnston, R.B. and Lee, R.P.W. (1997), The Role
    of Electronic Commerce Technologies in
    Just-In-Time Replenishment, Hawaii International
    Conference on Systems Sciences, Hawaii, IEEE
    Computer Society Press, pp 439-448.
  • Tyan, J. and Wee, H (2003), Vendor managed
    inventory a survey of the Taiwanese grocery
    industry, Journal of Purchasing and Supply
    Management, vol 9, pp 11-18
  • Weinstein, R. (2005) RFID A Technical Overview
    and Its Application to the Enterprise, IEEE
    Computer Society http//www.cs.sunysb.edu/jgao/CS
    E370-spring07/RFID.pdf

3
Lecture Outline
  • Other B2B EC technologies (GS1 Guest Lecture)
  • Standardised Numbering Schemes
  • GS1 (formerly EAN) system, ePC
  • Automatic Identification (Auto ID)
  • Barcode, QR Code, RFID, smart cards
  • Electronic Payment (EFT)
  • B2B EC enabled Business Process Reengineering
  • Main principles
  • Scan packing, VMI and ERS

4
  • Electronic Funds Transfer (EFT)

5
Major Stages
6
Automated Clearing Houses
VENDOR
CUSTOMER
Cash
Cash Receipts
Receipts
Cash Payments
System
System
A.P.
Accounts Receivable
Accounts Payable
Customer Bank
Vendor Bank
Structured account amount (60
bytes) Unstructured cheque stub (34 bytes)
Automated Clearing House (ACH)
7
Early EFT
VENDOR
CUSTOMER
Customer Bank
Vendor Bank
Automated Clearing House (ACH)
8
Practical EFT
Problem! Only 34 bytes of description Main
requirement was the addition of open ended
structured remittance information to the cheque
info
  • Powerful US firms negotiated their own standards
    with banks
  • CTX (Corporate Trade Exchange) de facto standard
    emerged
  • Fixed length cheque X.12 820 Remittance Advice

9
Payment By EFT
VENDOR
CUSTOMER
Customer Bank
Vendor Bank
Automated Clearing House (ACH)
10
Compare
VENDOR
CUSTOMER
Cash
Cash Receipts
Receipts
Cash Payments
System
System
A.P.
Accounts Receivable
Accounts Payable
Bank Statement
Customer Bank
Vendor Bank
Automated Clearing House (ACH)
11
Involving VANs
REMIT Remittance AdvicePI Payment
InstructionPA Payment Advice
VENDOR
CUSTOMER
VAN
Customer Bank
Vendor Bank
Automated Clearing House (ACH)
12
Involving IVANs
REMIT Remittance AdvicePI Payment
InstructionPA Payment Advice
VENDOR
CUSTOMER
Customer Bank
Vendor Bank
Automated Clearing House (ACH)
13
B2B EC enabled Business Process Reengineering
(BPR)
14
Manual Trading
Trading Documents
15
Three Principles in BPR(Johnston 2000)
  • Once-only data entry principle
  • Once data has entered one trading partners
    computer system it should never need to be
    manually re-entered by another partner
  • Reduce cost, increase accuracy
  • Make processes more efficient
  • 2. Data turnaround principle
  • Data received from a supplier should be derived
    from data provided earlier by the customer
  • Eliminate non-value-adding processes
  • 3. Information sharing principle
  • Sharing of information to coordinate actions of
    all parties in the supply chain
  • Improve the whole supply chain performance,
    reduce total cost, increase competitiveness

16
Applying the Principles
17
Applying the Principles
  • Scan packing
  • Principles 1 and 2
  • Evaluated Receipt Settlement (ERS)
  • Principles 1 and 2
  • Vendor Managed Inventory (VMI)
  • Principles 1, 2, 3

18
  • The ECN GroupOnline - eCommerce Visibility
    Applications
  • A Demo Scan Pack System for Coles
    Suppliers(modified)

19
Document Tracking Screen
1. You will receive an email letting you know a
new Purchase Order has arrived
2. You will be able to search for your Purchase
Orders by date
3. You can also search using the drop down box if
you want to see all of your Purchase Orders
4. Then click on Search
20
Purchase Order (PO) Summary Screen
21
Purchase Order (PO) Viewing Screen
You now have to let the retailer know what you
can supply from the Purchase Order. Click on the
Prepare POA button
22
Purchase Order Acknowledgement (POA) Manual Input
Screen
1. You can manually change the Ordered units in
this field. Otherwise leave as is.
2. If you change the ordered units for the POA
click on the Update Totals button
4. Then click on the OK button to send the POA
3. Then click on the Send button
23
Preparing for ASN POA Reply with ASN screen
1. You now need to turn the POA into an
ASN. Click on the Prepare ASN button.
24
Advanced Shipping Notice (ASN) Screen
You need to select the Product number that is
going to be placed on the pallet
This is the Quantity being ordered for that
product
Quantity field will be filled in
automatically by scanning the product barcode as
it is packed
Use By and Batch Number will be filled by
scanning the barcode
Then click on the Add SSCC to ASN button
You MUST then click on the Send button for the
ASN to be sent to the retailer!
25
Sending preparing to print Pallet Labels
1. You MUST then click on the OK button to send
the ASN to the retailer as well going to next
screen to print the pallet labels
26
Printing Pallet Labels
1. This is a list of your pallet labels for the
purchase order.
2. Please click on the Print SSCC Labels button
to create your pallet labels.
27
Pallet Label Example
FROM Hilton Hosiery
Broadmeadows Vic
Con No 1198765
1001
To XYZ DC 9344
For XY Z
Woodlands
Burwood
Braeside 3287
Burwood Hwy 3218
PO 123456789
3 9312345 123456789x
EAN AI 421 Postal Code
  • QR

AD
STORE ZONE / DEPT
Hilton Sheer to Light
30/04
Panty Hose Size 10
EAN AI 90 Store Number
EAN AI 00 SSCC
Label A6 Size
M
28
Demo Summary
  • Purchase Order (PO) is generated by the customer
    and sent to the supplier electronically
  • PO received is turned into PO Acknowledgement
    (POA) by the supplier
  • POA is turned into Advance Shipping Notice (ASN)
    by the supplier
  • Quantity supplied on ASN is automatically filled
    in by scanning the product barcode during packing
  • ASN is turned into RCTI (Recipient Created Tax
    Invoice) by the customer
  • No data re-entry (Principle 1) and supplier uses
    data provided by customer (Principle 2)

29
Three Principles in BPR(Johnston 2000)
  • Once-only data entry principle
  • Once data has entered one trading partners
    computer system it should never need to be
    manually re-entered by another partner
  • Reduce cost, increase accuracy
  • Make processes more efficient
  • 2. Data turnaround principle
  • Data received from a supplier should be derived
    from data provided earlier by the customer
  • Eliminate non-value-adding processes
  • 3. Information sharing principle
  • Sharing of information to coordinate actions of
    all parties in the supply chain
  • Improve the whole supply chain performance,
    reduce total cost, increase competitiveness

30
Basic EC Model (Principles 1 and 2)
31
Evaluated Receipts Settlement (Principles 1 and 2)
32
Vendor Managed Inventory ERS(Principles 1, 2,
3)
33
Case Studies available on LMS
  • Automotive Vendor Managed Inventory Plexco
    (Australia)
  • VMI Providing visibility across the Pharma RD
    supply chain

34
Discussion
  • What are the benefits of VMI for customers and
    vendors?
  • What are costs/disadvantages for organisations to
    adopt VMI?
  • What are possible barriers to VMI adoption by
    organisations?

35
Plexco Case Study
  • Plexco International is a tier one suppliers to
    leading automakers.
  • Produces various components audio systems,
    lighting systems, etc.
  • Outsource logistics and warehouse functions to
    WorldLogistics
  • air and ocean freight forwarding, JIT
    deliveries, hub warehousing, VMI
  • WorldLogistics enables Plexco suppliers to
    control Plexcos inventory level for the products
    supplied through JIT Web
  • VMI requirements high level visibility and
    quality information.
  • Results
  • Average stock turn rate 3-4 days at the
    warehouse
  • Materials are used within hours at the Plexco
    plant
  • Average delivery time 2 hours

36
Pharma RD Supply Chain Case Study
  • Pharmaceutical industry players need to improve
    their supply chain management due to increasing
    cost pressures and RD functions.
  • Pharmaceutical research labs deal with high
    inventory costs need to track supplies in real
    time and optimize inventory level to avoid
    negative impact.
  • Use VMI to improve both inventory costs and
    service levels
  • Five primary challenges inventory visibility,
    risk (expired/contaminated inventory), cost
    containment (only pay for useful inventory),
    internal customer demands and globalizaiton)
  • VMI enables them to achieve transparency,
    integration and intelligence

37
VMI Discussion Possible Answers
  • What are the benefits of VMI for customers and
    vendors?
  • For customers
  • Shifts management of product replenishment to
    supplier
  • Better service level by suppliers
  • Optimizes inventory level
  • Increases inventory turnover
  • Reduces inventory
  • Improves product availability
  • Better product mixes
  • Reduce product lead time through a better
    coordination
  • More effective product promotion (not evident in
    the case studies)

38
VMI Discussion Possible Answers
  • What are the benefits of VMI for customers and
    vendors?
  • For vendors
  • Access to real demand information greater
    demand visibility
  • Optimizes inventory level and product mixes
  • Strengthens relationship with customers tighter
    integration
  • Improve planning (and promotion) effectiveness
  • Lower costs of promotion (not evident in the case
    studies)

39
VMI Discussion Possible Answers
  • What are costs/disadvantages for organisations to
    adopt VMI?
  • Extra resources required for having supplier
    representatives for each customer - Supplier
  • Extra effort for collaboration in managing stock
    both Supplier and Customer
  • Restructuring of the organisation and
    responsibility - both Supplier and Customer
  • IT infrastructure EDI, barcoding system (auto
    ID), RFID, scan packing - both Supplier and
    Customer
  • Lost of control - Customer
  • Vulnerability misuse of information shared -
    Customer

40
VMI Discussion Possible Answers
  • What are possible barriers to VMI adoption by
    organisations?
  • Trust difficult to trust trading partners
  • No common goal between trading partners
  • Trading partners do not have the required IT
    infrastructure in place
  • EDI to share information
  • Barcoding system, RFID (auto ID) to capture POS
    data, perform scan packing, identify delivery and
    product movement

41
Summary
  • B2B EC technologies are able to almost completely
    eliminate paper documents and manual data entry
    in trading
  • This reduces fixed replenishments costs and
    replenishment lead-time
  • It helps make JIT possible
  • Due to the limitations of barcode, the EPC
    network has been developed to further improve the
    efficiency of supply chain.
  • To maximize the value of B2B EC, it should not be
    used only for automation purpose, but also for
    business process reengineering across the supply
    chain.

42
ISYS90034Business-to-Business Electronic
Commerce Week 11 B2B EC Adoption and
Organisational Issues
  • Dr. Sherah Kurnia

43
Reading Materials
  • Johnston, R.B., Mak, H.C. and Kurnia, S. (2007),
    Achieving Advanced Supply Chain Management
    through Internet-based Electronic Commerce,
    E-Commerce and V-Business Models for Global
    Success, second edition, Butterworth Heinemann,
    London, pp 232-249.
  • Kurnia, S. and Johnston, R.B. (2001), Adoption
    of Efficient Consumer Response The Issue of
    Mutuality, Supply Chain Management An
    International Journal, Vol 6, No 5, pp 230-241.
  • Attaran, M. and Attaran, S. (2007),
    Collaborative Supply Chain Management The Most
    Promising Practice for Building Efficient and
    Sustainable Supply Chains, Business Process
    Management Journal, Vol 13, No 3, pp 390-404.
  • CPFR Report 2008
  • Additional
  • Ali, M., Kurnia, S. and Johnston, R.B. (2011).
    Understanding the Progressive Nature of
    Inter-Organizational Systems (IOS) Adoption,
    E-Collaboration Technologies and Organizational
    Performance Current and Future Trends,
    Information Science Reference, Hershey, New York,
    pp 124-144.
  • Ham, Y.N., Reimer, K. and Johnston, R.B. (2003),
    Complexity and Commitment in Supply Chain
    Management Initiatives, 3rd International
    Conference on Electronic Business, Singapore.
  • GS1 Australia 2013 Reports

44
Lecture Outline
  • Overview of the Grocery Industry
  • B2B EC Initiatives in the Grocery Industry
  • EAN way
  • ECR
  • Cross docking discussion
  • CPFR
  • B2B EC adoption complexity

45
The Grocery Industry Overview
  • Products
  • Cheap, low margins, commoditized
  • Product Life
  • Some very long, some (increasingly) are short
  • Range
  • 100s of thousands of products (SKUs)
  • Competition
  • Cost-based
  • Range-based
  • Promotions, new products

Stock-Keeping Units
46
The Supply Chain
  • Different organisations specialise their
    activities in one of
  • materials supply (Visy, Amcor, etc)
  • manufacturing (Unilever, Nestle, Proctor
    Gamble, etc)
  • retailing (Coles, Woolworths, etc.)

Distribution Centres
47
Players in Australia
Retailers
Manufacturers
  • Coles
  • Woolworths
  • Independent Grocery Association
  • A few small independents
  • Aldi
  • Costco
  • Unilever
  • Proctor and Gamble
  • Coca Cola
  • Nestle
  • Johnson Johnson
  • Philip Morris
  • Kraft Foods
  • Many smaller suppliers (SMEs)

48
Key Issues
  • Cost Reduction
  • Control of product variety (Category Management)
  • Managing product introduction and promotion
  • Distribution
  • Getting goods from manufacturer to retail store
  • Inventory Management
  • Controlling the stock levels of goods in retail
    stores, distribution centers, manufacturers
  • Replenishment
  • Controlling the call-up of goods when required

49
Grocery Industry Challenge
Accurate forecasting of demand
50
Local Issues - Australia
  • Low population
  • Large distances
  • Diverse tastes especially in capital cities
  • Retail chains are very powerful
  • Many Small to Medium-sized Enterprises (SMEs) in
    the supply chain

51
B2B EC Technologies in Use
52
EANway
  • Electronic Commerce using Accredited Methods
    Numbering for Supply Chain Processes
  • Initially used by Myer Grace Bros (MGB Way), now
    adopted by GS1 Australia as an accredited SCM
    method
  • Share Point of Sales (POS) or Forecast data with
    suppliers
  • PO/ASN (EDI), Scan Pack (Bar code) to maintain
    data Integrity, reduce errors and reduce costs
  • Utilise the SSCC label
  • Essential for advanced distribution strategy such
    as cross docking

53
Covers scan packing, ERS initiatives
Trading partners must be EC technology compliant!
54
Mismatch!
55
Additional BPR Principal 100 Compliance
The reforms with the greatest benefits are not
tolerant of partial EC compliance within the
supply chain. 100 EC compliance of trading
partners should be the aim of large EC players
Johnston (2000)
56
The Solution
  • Internet-based SME EDI solution product
    example scan packing demo
  • Requirements
  • Cheap 1000 with barcode reader (500 without)
  • Turnaround ASN created from PO
  • Scan Packing and verification
  • Compatibility with main EDI systems

57
The Concept of Intelligent Gateway
58
Efficient Consumer Response (ECR)
59
Brief History
  • Devised by Kurt Salmon Association in 1992
  • Reaction of large US grocery retailers to
    competitiveness of alternative leaner retail
    formats (eg. 7 Eleven)
  • Essentially a form of JIT based on EC
    technologies
  • Many ideas were invented by Walmart
  • ECRA (ECR Australasia) was formed in 1999 as a
    trade group with a board of 9 industry CEOs

60
Efficient Consumer Response
Timely, accurate, paperless information flow
Synchronized Production Reliable flexible
operations
Cross Docking
Efficient range promotions
Supplier Integration
Continuous Replenishment
Smooth, continuous product flow matched to
consumption
61
(No Transcript)
62
Distribution Strategies
  • Traditional
  • Pick-and-pack
  • Direct Store Delivery
  • Advocated by ECR
  • Cross-Docking
  • Flow-through
  • Direct Store Delivery
  • Two distinguishing features
  • Is a DC used?
  • Are there stocks at the DC?

63
How Hubs Reduce Transport Costs
Manufacturer
Retailer
No of Connections N2
64
How Hubs Reduce Transport Costs
Manufacturer
Retailer
Distribution Centre
No of Connections 2 X N
DC
65
Summary of Pick-and-Pack Operation
66
Summary of Cross-Docking Operation
Demo http//www.youtube.com/watch?vHA6VSpPydVE
67
Performance Comparison
Pick and Pack Cross Dock Ratio
Area (sq.ft.) 350,000 10,000 1/35
Throughput(cartons / week) 775,000 135,000 1/6
Labour 21 30(50)
Overhead 68 20
Total 89 50(70) 1/2
68
Cost Comparison (per carton)
69
Pick Pack versus Cross Docking
70
Week 11 Workshop
  • Read the paper by Kurnia and Johnston (2001)
  • Compare PP and cross docking in terms of
  • Efficiency
  • Cost/benefit/risk
  • Information transparency
  • Scalability of operation
  • Information system in use
  • See 5 questions on the handout for workshop

71
Discussion Questions
  • What are the causes of inefficiency of Pick and
    Pack (PP) operation compared to cross-docking
    operation?
  • Identify the advantages, disadvantage and risk of
    cross-docking for each party
  • How much information about consumer activity does
    the stream of orders on the manufacturer contain
    with PP? How about cross-docking? What is the
    cause of the difference?
  • If the product range (number of different
    products) was doubled, what effect would it have
    on the operating costs in a PP distribution
    centre? How about for a cross-docking
    distribution center?
  • What kind of information systems needed for PP?
    What kind of systems needed for cross-docking? To
    what extent are PP systems inter-oganisational?
    How about cross-docking?

72
Discussion - Answer
  • What are the causes of inefficiency of Pick and
    Pack (PP) operation compared to cross-docking
    operation?

PP Sophisticated computer systems needed, (computer department, WMS, inventory management system) double handling and paper work associated with storage and retrieval labour of repacking pallets, high inventory level requires large warehouse Lack of demand information transparency X-Docking simple mechanical sorter and barcode reader labour of breaking down pallets labour of checking deliveries labour of repacking pallets Small warehouse High demand information transparency
73
Discussion - Answer
  • 2. Identify the advantages, disadvantage and
    risk of cross-docking for each party

Manufacturer Distributor Retail Store
Advantages (Benefits) Visibility of Customer demand. Better planning Better promotion Lower inventory Less waste Much cheaper Reduced system requirement Less W/H capacity Reduced handling Less physical checking of deliveries Goods less likely to exceed shelf life Potentially lower price due to more efficient upstream logistics
Disadvantages (Costs) Need to ship in small lots leads to extra costs Loss of economy of scale EDI and Barcode compliance required Increased system demands More specialized packaging Negligible - perhaps may lose retailers trust in case of inaccurate deliveries Negligible perhaps higher dependency on manufacturers performance
Risks Lost sales Threat of being eliminated Stock-outs due to poor manufacturers performance
74
Discussion - Answer
  • How much information about consumer activity does
    the stream of orders on the manufacturer contain
    with PP? How about cross-docking? What is the
    cause of the difference?
  • Pick and pack practically none because orders
    are initiated by the DC not the retailer and
    there are large infrequent consolidated orders.
  •  
  • Cross-docking high because manufacturer orders
    are derived from retailer on the frequent basis.
  •  
  • The buffer stocks at the DC cause the difference
    by absorbing the information from retailer
    about consumer demand.

75
Discussion - Answer
  • If the product range (number of different
    products) was doubled, what effect would it have
    on the operating costs in a PP distribution
    centre? How about for a cross-docking
    distribution center?
  • Some costs would be (nearly) doubled
    particularly those connected with physical
    storage of the products.
  •  
  • A cross docking warehouse would hardly be
    affected

76
Discussion - Answer
  • 5. What kind of information systems needed for
    PP? What kind of systems needed for
    cross-docking? To what extent are PP systems
    inter-oganisational? How about cross-docking?
  • PPCentralised intelligent control systems such
    as inventory management and warehouse management.
    They are stand alone at the DC.
  • X-dock Decentralised simple communication
    systems such as EDI and Auto-ID. They are
    interoganisational in nature and need
    collaboration.

77
Distribution Strategies (Revisit)
  • Traditional
  • Pick-and-pack
  • Direct Store Delivery
  • Advocated by ECR
  • Cross-Docking
  • Flow-through
  • Direct Store Delivery
  • Two distinguishing features
  • Is a DC used?
  • Are there stocks at the DC?

78
Flow Through
  • Flow through is the same as X-docking except
    whole pallets are destined for one store
  • Therefore, there is no breakdown of pallets
    just redirection
  • Usually used for promotional items high volume
  • Like cross docking, flow through requires a high
    degree of informational coordination between
    trading partners

79
Direct Store Delivery
  • Used mainly for perishable goods such as
    biscuits, cakes, vegetables
  • Less informational coordination required compared
    to cross docking and flow through

80
ECR Approach
  • The overall objective of all major reforms in the
    Retail industry has been inventory reduction
    through JIT
  • ECR concentrates on operational process reform
  • JIT via pull from consumer demand
  • Pull JIT requires small order quantities with
    short lead time and high reliability
  • EDI, Auto ID, Cross docking, Flow through
  • Requires substantial process change
  • Requires substantial cooperation of all parties

81
Problem
  • Pull (reactive) JIT will only work when demand is
    very smooth ( 10)
  • Therefore, ECR advocates the use of everyday low
    pricing to avoid demand fluctuation
  • Seasonal demand, new product introduction and
    promotions dont qualify

82
Solution
  • Use Push approach to JIT
  • Plan and forecast future events
  • for product promotion, new product introduction,
    seasonal demand products
  • Drive replenishments from order schedules derived
    from the plan

83
CPFR
84
Traditional Forecasting
  • Manufacturers and Retailers forecast
    independently using different input
  • Manufacturers using DC order history, promotion
    plans etc.
  • Retailers using POS data plus other intelligence
  • Accuracy not measured
  • Forecast details are not shared with other
    parties
  • Manufacturer pushes products to their warehouse
  • Retailer pulls using purchase order
  • Collaboration only begins when order cannot be
    filled
  • VMI is sometimes adopted to improve the situation

85
Issues with VMI Initiative
  • Manufacturer forecasts from retailer data
  • POS data ideally (consumer demand)
  • Retailer orders on DC more often (aggregated over
    stores, preprocessed by retailer)
  • Manufacturer initiates orders (reverse PO)
  • Push system with a better plan
  • Has largely not worked
  • Data from wrong source
  • Retailers blame manufacturers for problems
  • Does not create joint ownership
  • Can be rescued by joint monitoring at low level
    but this is not generally scalable

86
Collaborative Planning, Forecasting and
Replenishment (CPFR)
  • 1995 - CPFR Committee was formed by VICS
  • VICS (Voluntary Interindustry Commerce Standards)
    was the Grocery industry EDI standards body
  • Consists of Retailers, Manufacturers and Solution
    Providers
  • Created and tested very detailed process maps to
    implement their concepts
  • 1997 1st pilot involved Wal-mart, Lucent, Sara
    Lee, SAP, Ernst and Young, Sun
  • Several others have followed including Australian
    retailers and manufacturers

87
CPFR Process Overview
Measure CPIs, evaluate and change strategies
Scope the collaboration
Define events to be planned
Identify discrepancies between actual and plan
Produce, ship, receive goods
Project Consumer Demand
Project actual orders using order sizes,
holdings, lead times
Create / send actual orders
88
Manufacturers and Retailers Activities
89
Relationship to ECR
  • They both have the aim of JIT replenishment
  • ECR pull system
  • CPFR push system
  • ECR is mainly about streamlining joint operations
  • (replenishment and category management) using EC
    technologies
  • CPFR is mainly about joint tactical planning

90
(No Transcript)
91
Motorola Case Study CPFR(see CPFR Report 2008
handout, pp 13-14)
  • Motorola (manufacturer) took the lead in CPFR
    with selected retailers.
  • Started with a simple Excel spreadsheet
    application.
  • Various benefits gained (see the case)
  • What are possible barriers to CPFR adoption?

92
Motorola Case Study CPFR(see CPFR Report 2008
handout, pp 13-14)
  • Motorola (manufacturer) took the lead in CPFR
    with selected retailers.
  • Started with a simple Excel spreadsheet
    application.
  • Various benefits gained (see the case)
  • What are possible barriers to CPFR adoption?
  • Lack of trust and partnership between supply
    chain parties
  • Requires significant changes to organisations
    internal cultures including structure, processes
    and strategies
  • Difficult to coordinate and manage changes
  • Expensive time and personnel requirements
  • Difficult to measure the benefits (financial
    results) and costs for each party

93
Future of CPFR
  • Widely influential concept, but not easily
    implemented
  • Many pilots, partial trials
  • Some organisations break CPFR components
  • Can be started using simple technology
  • Utilising B2B Hubs (e-marketplaces) to facilitate
    collaboration Collaborative Commerce
  • Global Net Exchange GNX - Large Retailers
  • WalMart Retail Link
  • Transora - Grocery Manufacturers of America

94
Complexity Level
A continuum of SCM initiatives (Ham et al 2003)
95
Commitment Requirements
Complexity-Commitment Continuum (Ham et al. 2003)
96
IOS Adoption Maturity Model (Ali et al. 2011)
  • Ali, Kurnia and Johnston (2007)

97
Example
98
Summary
  • B2B EC technologies and initiatives are
    inter-organisational system involving various
    parties which complicate the adoption.
  • Challenging requirements for B2B EC adoption
  • Trust between trading partners
  • Establish common goals
  • Information sharing
  • Mutual benefits, costs and risks sharing
  • EC compliance of trading partners
  • Changes in organisational structure and culture
  • The higher the level of IOS sophistication, the
    higher the organisational commitment level
    required for adoption.
  • Organisations can progress further in IOS
    adoption as they improve their relationship with
    trading partners
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