mbus 626 technology briefing web based supply chain management chris nicol betsy vo ryan gee
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MBUS 626 Technology Briefing
Web Based Supply Chain Management
Chris Nicol
Betsy Vo
Ryan Gee
Agenda
• Overview of Supply Chain Management (SCM)
• Benefits of SCM
• SCM Technology
• Conclusions
Manufacturers Distributors/Converters
Suppliers/Raw Materials
Customers
Information Flows
Goods Flow
Retailers
The Traditional Supply Chain
• Enterprise attempt to optimize individual processes often with conflicting goals
Purchasing Manufacturing Distribution Customer Service/Sales
Few change- overs
Stable schedules
Long run lengths
High inventories
High service levels
Regional stocks
SOURCE MAKE DELIVER SELL
Low pur-chase price
Multiple vendors
Low invent-ories
Low trans-portation
Traditional SC Problems
• SCM deals largely with cross-functional and inter-enterprise business processes to speed product, information and fund flows up and down a supply chain
Manufacturer
Distributors/Wholesalers
Consumers
Suppliers Retailers
Goods Flows Information Flows
Funds Flows
Overview of SCM
*Source: PRTM Integrated Supply Chain Benchmarking Study, 1997
Typical Quantified Benefits from Integrated the Supply Chain
Delivery Performance 16%-28% Improvement
Inventory Reduction 25%-60% Improvement
Fulfillment Cycle Time 30%-50% Improvement
Forecast Accuracy 25%-80% Improvement
Overall Productivity 10%-16% Improvement
Lower Supply-Chain Costs 25%-50% Improvement
Fill Rates 20%-30% Improvement
Improved Capacity Realization
10%-20% Improvement
• More frequent planning means responsive to changing customer needs while decreasing inventories
Time Time
AverageSupply
AverageSupply
Planning Cycle Planning
Cycle
Lower Inventories & Lead Times
Manufacturer
Wholesale
Distributors
Consumers
Multi-tier
SuppliersRetaile
rs
Reduced Volatility
Time
Sales
Sales
Time
Sales
Time
Sales
Time
Bull Whip Effect
• Move from push to pull manufacturing
Manufacturers
Distributors/ Wholesalers
Consumers
Suppliers
Retailers
Manufacturers
Distributors/ Wholesalers
Consumers
Suppliers
Retailers
• Make what we will sell, not sell what we will make!!
Lower Costs
• Optimization of all supply chain activities
Supply Chain Optimization
Synchronized, Concurrent Planning
DemandPlanning
Distribution
Planning
Manufacturing Planning
Procurement
Planning
Synchronized, Sequential Planning
Forecasting
Distribution
Planning
Manufacturing Planning
Procurement
Planning
Total Optimization
Purchasing Manufacturing DistributionCustomer Service
/Sales
Available-to-Promise (ATP) Capable-to-Promise (CTP)
• Move from functional silos to process-oriented business processes (e.g., order-to-cash, cash-to-cash)
Integrated Sales and Operations Planning (S&OP)
SOURCE MAKE DELIVER SELL
SCM and e-Business Practices
Barriers
• Integration of Systems– Legacy systems
• Security Issues
• Low Cost Technology– EDI vs. Internet
• APS and e-business technology supports best SCM practices– Advanced Planning & Scheduling Systems– XML (Extensible Markup Language) enabled internet
MRP SCM APS and e-business
SCM Technology
• Model factory production system– material requirements & constraints– plant capacity limitations– additional resource limitations
• Evaluate existing or new production plans• Provide production scheduling• Capable of expansion to entire supply chain• Provide for internal and external integration
APS
• Extensible Markup Language– Huge Advantage over EDI– Huge Advantage over HTML
• XML Users– Heavily used in medical industry– Microsoft is employing it everywhere
• Provides for external collaboration via sharing of data regardless of application
• Provides Machine-to-Machine Interaction over the Internet
XML
Manufacturers
Wholesale Distributors
Suppliers
Customers
Information Flows
Goods Flow
Future Internet-Connected Supply Chain
Supplier Exchanges
Customer Exchanges
LogisticsExchanges
Contract Manufacturers
Logistics Providers
Virtual Manufacturers
Retailers
Conclusions
• E-business technology will tear down the walls inside companies
• Will also allow companies to do joint planning and scheduling with their supplier’s suppliers and customer’s customers
• The Internet will help foster the rapid growth of dynamic supply chain trading communities
Leaders
• Software Companies– IT2 Technologies– PeopleSoft– SAP
• Industries– Automotive– Dell Computers– Lucent Technologies
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