Supply Chain Information Systems and Electronic Sourcing: Chapter 18
____ refers to the process of downloading all data buckets into the main system on a regularly scheduled basis.
Batch updating
Blogs, Tweets, and Cloud Computing
Blog Type of website that regularly posts articles, comments, and questions Twitter Allows users to send and read messages or "tweets" Cloud computing Internet-based software and information sharing on
Third-Party Marketplaces
Bring buyers and seller together in cyberspace Vertical portals Narrow range of commodities Horizontal portals
____ is Internet-based, and users share software and other information that is provided to computers and mobile devices on demand
Cloud computing
ERP and Basic Business Processes
Common database Information is captured only once in real time Highly visible transactions Linked with work flow
Spending Reduction
Consolidation of similar purchases Reduction in number of suppliers Reduction of maverick spend Reduction of spend by other departments Increased use of more efficient contracting methods
ERP Implementation Steps
Define current process "as is" Define what best-in-class business process "should be" Develop system Work through all final bugs and then flip switch
Spend Analysis Data
Derived from existing P.O.s and accounts payable records Minimum of one year of spend data Develop similar categories of spend Assign spend to categories Develop appropriate spend
Spend Analysis
Determination of dollar amount and volume of expenditures What goods and services are purchased?
E-Sourcing Suite Modules
Distribution planning module Identify transportation requirements and DC inventory levels Demand planning module Identify whether long-term capacity is sufficient for future demand Supplier collaboration module Ensure that future supplier capacity is sufficient for future demand
Communication Technology
Electronic data interchange (EDI) system components Standard form (EDI standards) Translation capability (EDI software
Reverse Auction
Electronics process where multiple sellers vie for business of single buyer Results in price reductions Regular reverse auctions vs. rank reverse auctions Can often alienate suppliers by its focus on price only
Replacement of Legacy Systems
Eliminate hardware and software incompatibilities and allow real time, fluid communication Reduce excessive maintenance and programming costs
Routine Decision Making
Exceptions dealt with manually off-line Automated inventory management systems
Supply Chain Information Flows
Execute and control physical and monetary flows Automate routine decisions Support planning activities Support higher-level tactical and strategic decision making
____ systems kick off and control the movement of materials among supply chain partners.
Execution
systems kick off and control the movement of materials among supply chain partners
Execution (p. 674)
E-Sourcing Suites - SRM
Focused on decision support around broad group of transactions Using both data and structured mathematical modeling Interactive systems to assist in: Supplier selection
Purchase Order Issuance
Generation of P.O.s Automatic assignment of consecutive P.O. numbers Transfer of P.O. information to proper database(s)
The Electronic Revolution in SCM
Greater focus and sophistication in e-SCM system expenditures Many competent suppliers Increasing capabilities Shorter project implementation life cycles
Receiving and Inspection
Hold received item in protected state until all inbound processing is completed Inspection, if required Material transfer Stockkeeping
Supply Chain Planning
Identify requirements in terms of the supply base Forecasted demand Production decisions
____ within the supply chain is the process of sharing critical data required to manage the flow of products, services, and information in real time between suppliers and customers.
Information visibility
Execution Systems
Initiate and control movement of materials between supply chain partners Where to store Where to go pick items up How many to pick
Purchasing Database
Integrated collection of computer files capable of storing operational data essential for managing a department
Enterprise Resource Planning
Integrates all classic business functions together Uses common database Best for routine decision making and transaction processing
Strategic Integration
Internal Use of common information between various sites and functional areas Enterprise resource planning systems External Need to link suppliers, distributors, and customers Forecast demand
Drivers of New SCM Systems and Applications
Internal and external strategic integration Globalization and communication Data information management New business processes
Globalization and Communication
Manage global customers and suppliers Calculate total global logistics costs Increase leverage and component standardization worldwide
Buy-Side Systems
May be either self-designed or acquired through e-sourcing suite suppliers Allow supply manager to manage sourcing cycle, track spend, and exert control of contract
Implementing ERP Systems
May need to reengineer processes prior to ERP to remove non-value-adding steps Could result in major organizational and culture shift
Negotiation and Total Cost Support Models
Models incorporate total cost including Shipping Freight Duties Imports and tariffs
Strategic Cost Management
Need to automate data capture in single enterprise-wide data warehouse accessible to all users
New Business Processes
Need to create a rapid response capability to ... Adapt to changing customer needs Controlling costs
____ applications address such long-term, strategic questions as "Where should we locate warehouses?", and "How large should our transportation fleet be?," often making use of simulation and optimization modeling.
Network design
Data Information Management
New IS technologies Servers, wireless applications, and telecommunication Need to effectively filter, analyze, and mine huge amounts of data to support managerial decision making
EDI and the Internet
Often requires major capital investment due to application-specific hardware Different customers have different EDI systems
Contract Management and Compliance
Oversight over back end of the sourcing process Ensure that suppliers and users are in compliance with contract terms
Evolution of e-SCM Systems
Point-of-sale (POS) systems RFID Product life cycle software Bid optimization
Other Challenges
Pricing compliance Changes in terms Volume discount thresholds Payment schedules Due dates
Total Cost Reporting
Provides visibility to entire materials process Uses data warehouses Frequency of reporting Real-time updating
Benefits of Measurement
Providing input into supplier selection considering total costs, not just price Isolating supplier process inefficiencies
[A] ____ is a process in which all data files that include a specific address are automatically updated within the system.
Real-time updating
Transaction Processing
Record and retrieve critical data Execute and control physical and monetary flows Little or no human intervention
Request for Quotation
Request to submit proposal based on set of specifications provided by buyer Also known as eRFx module Request for information (RFI) Request for proposal (RFP)
SRM/CRM Applications
SRM Applications Design collaboration Sourcing decisions Negotiations CRM Applications Market analysis Sell process Order management
Internal and External Systems Integration
SRM-driven e-sourcing suites Communication systems throughout the supply chain Convergence of CRM systems linking suppliers and production schedules Allows calculation and
Strategic Decision Making
Search for data patterns or relationships Customer segment analysis Product life cycle forecasting "What if" analysis Need for flexibility for data
How to Conduct a Reverse Auction
Self-service Through full-service third party provider Helps with selection of commodity Assists in supplier qualification
E-Sourcing Models
Sell-side systems Buy-side systems Third-party marketplaces
Cloud Service
Shared technology infrastructure Data stored on provider's servers Subscription-based or pay-per-use in real time over the Internet Characteristics Public cloud Sells services to anyone on the Internet Private cloud Proprietary network or data center that supplies hosted services to limited number of people Virtual private cloud
Information Visibility in SCM
Sharing critical data required to manage flow of products, services, and information in real time between suppliers and customers Improves responsiveness of supply chain
Considerations of Information Visibility Systems
Size of supply base and customer base Criteria for implementation Content of information shared
Social Networking Software in SCM - Improving Information Visibility
Social network Group of individuals who share something in common Social service providers Allows individuals to share experiences in a virtual setting, i.e., Facebook
E-Bid Optimization
Software tools that extends traditional bid process to permit suppliers to configure bids in alternative ways Flexible bidding process a.k.a. expressive bidding Improves buyer's ability
Characteristics of SRM Systems
Spend analysis Sourcing RFQ processing Reverse auctions Bid optimization Negotiation and total cost support Contract management and compliance Supplier performance measurement and
Purchasing Database Examples
Supplier name and address files Historical usage files Open-order and past-due files Bill-of-material (BOM) files
Professional Networking Software in SCM
Supply managers linked to other supply managers worldwide Seek answers to questions Seek new professional positions Membership in professional interest groups
Internal Information Systems - ERP
Tracks organizational resources, including people, processes, and technology
Levels of Functionality
Transaction processing Routine decision making Strategic decision making Supply chain planning Decision support systems
E-Sourcing Suites - General
Transmission of product specifications Submission of bids Acceptance of contracts
____ systems attempt to allocate fixed logistics capacity in the best possible way, given business requirements.
Transportation and warehouse planning
Purchasing Data Warehouse
Type of decision support tool for collecting data from different resources and making it available to end users in consolidated, consistent manner
Sell-Side Systems
Typically free registration to users Supplier guarantees site security No investment by buyer Ease of access to many suppliers Inability to track expenditures or to control spending
Web-Based EDI
Typically less expensive Presents fewer standards issues
Use of Social Networking in B2B
Understand profile of ideal target prospect Do a better job on the first call Understanding prospect's key responsibilities, accomplishments, and past experience
Transportation and Warehouse Planning Systems
Used to allocate fixed logistics capacity How many units should we ship from each warehouse to each demand point?
Price Forecasting
Variables affecting and item's price Length of item's product life cycle Current life cycle phase Item's price history
Supplier Performance Measurement and Control
Visibility to open-item status Measures and analyzes supplier performance Use of electronic scorecards Automatic inquiry of item status
Network Design Applications
Where should we locate warehouses? How large should our transportation fleet be?
/An ____ is a proprietary network or a data center that supplies hosted services to a limited number of people.
private cloud
A/An ____ is a proprietary network or a data center that supplies hosted services to a limited number of people.
private cloud
A ____ system is often used to search for patterns or relationships in the data.
strategic decision making
At the most basic level, information flows record and retrieve critical data, execute and control physical and monetary flows, and are referred to as ____.
transaction processing
Steps in a Reverse Auction
Buyer decides which commodities to consider Suppliers initially evaluated and invited to participate Buyer writes RFQ and sends to all qualified suppliers Bidding process is conducted
Benefits of Information Visibility
Buyer is assured that shipments are received on time, every time Allows problems to become more visible earlier Encourages decision-making collaboration Facilitates ability to make decisions collaboratively Reduces opportunity and problem resolution latency Measures and monitors supply chain activities
An Ideal EDI Transaction
Buyer's computer monitors real-time inventory status If replenishment needed, application program notifies translation software EDI P.O. is created and released against pre-negotiated blanket order Functional acknowledgement is automatically generated and sent to buyer EDI P.O. creates additional electronic transactions When order is filled at supplier, advance shipping notice (ASN) is created and transmitted to buyer Upon receipt of goods, shipping notice is electronically entered into receiving file Receipt notice is transmitted to buyer's accounts payable application and to supplier's invoicing system Invoice received by buyer is translated into buyer's format and invoice, receiving notice Payment authorization is generated and transmitted to accounts payable, and payment is sent to supplier electronically Electronic remittance advice is sent to supplier, and buyer is credited for payment
