Enterprise Service Computing Scientific_12

Sabr real time to minimize the impact of disruptions on the supply chain, which means cost-effective, speedy, reliable, and almost-error-free SC activities. The automation of critical (core competency) business processes should be done after improving the as-is process by eliminating nonvalue activities, simplifying and streamlining processes, and removing barriers (disconnects) between processes or functions. This means the automation should be done for the redesigned modi-fied to-be process, and the software needs to be customized to follow and support the process to maintain the competitive advantage. On the other hand, automating noncore competency processes can be done by either using out-of-the-box work flows provided by software companies by which such processes are changed ac-cordingly (no value in tailoring the software to fit the process), or by outsourcing the management of these processes to a third party. Agood example of work-flow automation is the application of electronic exchange portals in the area of procurement, such as Covisint for the automobile industry, e2open for the electronics industry, and Transora for the grocery industry. Level 3: Integrated SC Planning The integrated-SC-planning level allows companies to respond quickly and effec-tively to unplanned supply and demand events that may disrupt information and material flow in the supply chain as one unit. It allows a company to plan based on real-time execution data, and execute based on an up-to-date plan. Integrated SC planningprovidesaprocess-centricviewcoordinatingdifferentbusinesssubprocesses like product introduction, forecasting, replenishment, manufacturing, fulfillment, and procurement with suppliers and customers, while enabling event manage-ment. For example, it supports event-triggered planning and replanning. This level blends information gathered from users using collaboration in Level 2 and multiple transactions and planning systems to allow the exchange of knowledge by the SC partners and create synchronized plans and one global view of the supply chain. Each supply-chain member (buyer, supplier, carrier, third-party logistics, contract manufacturer, etc.) often operates independently and only responds to immediate requirements. If the Internet is integrated with the SC planning process, SC members can share needed information on a real-time basis, and react quickly and efficiently to changes in demand, material shortages, transportation delays, and supplier inability to replenish. One example is the collaborative planning, forecasting, and replenishment (CPFR) initiative. McDonald’s Japan is a good example of the successful use of CPFR. McDonald’s JapanestablishedaprocessaroundtheInternetwherebystores,marketing,distribution centers, and suppliers would communicate and collaborate via the company’s Web Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permis-sion of Idea Group Inc. is prohibited. Best Practce n Leveragng E-Busness Technologes site to agree on order sizes and supply-replenishment delivery schedules (Ballou, 2004). TaylorMade (a large golf supplier) leveraged integrated SC planning to improve the order-fulfillment process. TaylorMade adopted Provia Software as the warehouse-management system and integrated it smoothly with i2’s planning and fulfillment systems to prioritize orders based on service level, order volume, promised delivery date, and transport mode (Bowman, 2002). Level 4: New Innovative Processes Once companies master e-business application levels, they start to think of adopting new strategies and models for conducting business, seeking not only incremental improvements, but drastic ones. They might seek to reengineer (redesign) their processestoleveragethemostoutofe-businesstechnologies.Sometimes,companies starttodefinenewprocesses,seekingnewbusinessopportunitiesortryingtopenetrate new markets and customer segments that were neither apparent nor possible prior to the e-business. Companies seek the new-generation business models to achieve competitive advantage and significant benefits. One example is what Dell Computer did when it adopted the build-to-order strategy and provided flexible configuration capability for customers online. The following are examples that show the range of possibilities for companies that pioneered in these areas. Example 1: Mass Customization The Internet and e-business technologies facilitate mass customization and allow customers to configure specific order options tailored to their preferences. Mass customization is the centerpiece of a strategy that woke the big golf supplier TaylorMade and propelled it ahead of the competition in terms of agility and inno-vation. Today, TaylorMade can customize virtually any aspect of a club. The results to date are impressive (Bowman, 2002). Example 2: Public Marketplaces The Internet and e-business technologies helped many companies do business online using a secured specialized Web site. One example is World Chemical Exchange, providing a global market for chemical and plastic manufacturers and buyers. More than 2,500 members can now conduct around-the-clock trading of chemicals and plastics of all types (Lee & Whang, 2001). Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. Sabr Example 3: Supply-Chain Redesign Agoodexampleiswhatmanyremotediscountcomputer-hardwareand-supplyhouses did to compete with local retail stores. Many of them used the Internet technologies as a strategy to compress the order cycle time and improve the order-fulfillment process: Acustomer enters the order through the company’s Web site, the inventory and payment are checked, and the order is filled from the warehouse and shipped using UPS, FedEx, or other carriers directly to the end customer. Example 4: Value-Added Replenishment Programs Companies as part of lean initiatives are trying to focus on value-added activities to cut waste in the supply chain and reduce overhead cost. Therefore, manufacturers are moving away from making products to stock and sell them later. They are moving away from procuring based only on forecast. Vendor-managed inventory (VMI) is a replenishment program that helps companies achieve theirobjectives. VMI delays the ownership of goods until the last possible moment and delegates managing the stock to the supplier. Western Publishing is using a VMI program in its Golden Book lines. It develops a relationship with its retailers in which these retailers give Western point-of-sale data. Ownership of the inventory shifts to the retailer once the product is shipped (Ballou, 2004). Kanban replenishment is another program in which replenishing parts is based on part consumption. It avoids the inaccuracy in forecasting and eliminates the need for inventory. Example 5: Online Retailing Amazon.com understood e-business technologies very well. It has based its business model around it. Amazon.com depends on its efficient supply chain to satisfy cus-tomer needs worldwide. It mastered the selling-management process by improving the Web shopping experience through providing quick and reliable promises, and suggesting product bundles, among many other features. This makes Amazon.com one of the biggest and early adopters of e-business technologies. Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permis-sion of Idea Group Inc. is prohibited. Best Practce n Leveragng E-Busness Technologes Benefits of Adopting E-Business Application Levels Tables 3, 4, and 5 illustrate how the four application levels of e-business can address the challenges of SCM, SRM, and CRM business processes that were mentioned in the beginning of this section. These tables also show the potential benefits of adopting e-business strategies. Table 3. The impact of e-business application levels on SRM processes SRM.Business.Processes E-Business. Application. Levels Strategic. Sourcing Product.Design Procurement Benefits SC.Visibility Work-Flow. Automation Integrated. SC.Planning Sharing AVL with design and procurement departments A single user interface for design, sourcing, and procurement with flexible and configurable work flows Consolidation of enterprise spend/demand across separate systems Real-time visibility on engineering change requests (ECRs) Shared design workbench Tightly integrated to PDM and AVL Sharing supplier and shipment information, real-time exception visibility, audit-trail notification, alerts, and tracking Automated procurement subprocesses, bid analysis, and resolution work flow Synchronized replenishment, supporting different replenishment types, and matching execution documents like purchase orders, ASN, and invoices • Reducing part-inventory obsoleteness • Improving inventory turns • Reducing safety stock • Reducing expedition cost • Reducing design rework • Reducing process cycle time • Improving productivity • Increasing reuse of existing parts in the design • Improving on-time delivery Copyright © 2007, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited. Sabr Table 3. continued New. Innovative. Processes Analyzing supplier and SC performance (slice and dice by site, commodity, time, supplier, and KPI) Design collaboration Auctions, marketplace exchanges • Reducing development cost • Improving time to market • Reducing part/ raw-material cost • Improving quality Table 4. The impact of e-business application levels on SCM processes SCM.Business.Processes Application. Supply-Chain. Levels Sales.and. Operations. Order Fulfillment Benefits Planning SC .....Visibility Work-Flow. Automation Integrated. SC.Planning New. Innovative. Processes Providing an aggregated view on the SC performance and strategic information Consistent process with friendly user interface Integration with strategic sourcing to reduce supplier base SC redesign Real-time visibility to unexpected events in the SC and audit-trail data Unified demand plan across different departments Synchronized marketing, sales, production, and procurement plans Mass customization • Real-time SC visibility for the order-delivery life cycle • including contract manufacturers, distribution centers, and logistic providers Exception work- • flow resolution for demand changes • and fulfillment delays • • CPFR • • Build to order • Reducing uncertainty and safety stock Early issue detection Increasing efficiency Fast response Speed Accuracy Flexibility Penetrating new markets Customer satisfaction Copyright © 2007, Idea Group Inc. 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