Enterprise resource planning 1st by mary summer chapter 09

Enterprise Resource Planning, 1stEdition by Mary Sumner Chapter 9: Supply Chain Management and the eMarketplace... © Prentice Hall, 2005: Enterprise Resource Planning, 1st Edition by Ma

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Enterprise Resource Planning, 1st

Edition by Mary Sumner

Chapter 9:

Supply Chain Management and the

eMarketplace

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by Mary Sumner

9-2

Objectives

• Examine the supply chain participants

• Acknowledge the interrelationships among business

processes that support the supply chain

• Understand the role of ERP in supporting eBusiness

• Recognize how business intelligence tools are used

in decision analysis

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Supply Chain Management

(SCM)

• Integrated planning of the activities in a supply

chain

• Planning and control of flow of goods, services,

money, and information

• Allows customers and suppliers to partner together

– Maximize responsiveness and flexibility

– Reducing costs and paperwork

– Gain sustainable competitive advantage

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by Mary Sumner

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Supply Chain Relationships

• Can be maintained by manufacturer

– Continuous replenishment

– Can link into POS systems

• Cross-docking

• Creates linkages between supplier and

retailer

– Lower costs

– Better customer service

– Increased profitability

• Information sharing along supply chain

– Translates sales transactions into production

processes and material requirements

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Supply Chain Management

(SCM), continued

• Benefits

– Cost reduction

– Inventory reduction

– Cycle time improvement

– Improved customer service

• Integration requires commitment to strategy,

process, organization, and technology

– What linkages should be established

– Communications

– Data integration

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Partnership Evolution

– Responsibility of inventory management on

supplier – Supplier monitors level and replenishes

inventories – No risk of stockouts

– Quicker response time

– Retailer reduces inventory and administration

costs – Supplier gets more business

– No expedited orders

– Returned goods to supplier drops

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SCM Evolution

• Electronic linkages facilitate JIT systems

• Reduced costs, improved response time,

increased responsiveness to customer

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eBusiness Value Chain

• Evolution of virtual value chain

– Provides information-based channels

– Changed from transaction-based to

contract-based relationships – Moved from vertically integrated to selective

sourcing – Core firm outsources all parts of its business

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eProcurement

• eProcurement

– RFBs on web

– Bidding more competitive

• Free-market bidding levels playing field

– Increased choices

– Reduced transaction costs

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B2B Hubs

• B2B hubs

– Spot sourcing of operating inputs

– Systematic sourcing of inputs

– Bring suppliers of similar or complementary

products together at one web site

• One-stop shopping

– Automate transactions and reduce costs

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eSupply Chain

• Facilitates real-time updates across chain

– From consumers to suppliers

– Greater ability to fill orders

– Better understanding of customer needs

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Business Intelligence with ERP

Data

• Data warehouse

– Repository for making management decisions

– Data integrity accomplished by cleaning

– Consistent formatting applied

• Data mart

– Data storage for specific set of users

• Special data analysis

• Data mining

– Analysis of data for trends, sales forecasting,

inventory management

• Identifies problem, develops research, collects and

analyzes data

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Future of ERP

• Increased integration through SCM

• ASPs will provide cost efficiency and access

to latest technology

• Netsourcing

– Renting ERP services, applications, and

infrastructure over web – Additional risks in migration, contracts

– Internal IT capabilities must be maintained

• Application software integration of legacy

systems with ERP

– Plug and play

– Flexible, modular

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Case: Data Solutions

• Specializes in network implementation and

management

– Provides network services to companies with no

internal networking analyst or IT manager – Uses legacy accounting software for financial

accounting and financial management – Added billing package for client services

– Wants CRM

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Case: TechKnowledge

• Disitributor of presentation technologies

• Wants to netsource back-office functions

– Has no internal IT capability

– Wants and ERP vendor via hosting arrangement

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