chapter 8 e-supply chains, collaborative commerce, and intrabusiness ec
DESCRIPTION
Chapter 8 E-Supply Chains, Collaborative Commerce, and Intrabusiness EC. Jason C. H. Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99223 USA [email protected] http://barney.gonzaga.edu/~chen. Learning Objectives. - PowerPoint PPT PresentationTRANSCRIPT
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 1
Chapter 8E-Supply Chains,
Collaborative Commerce,and Intrabusiness EC
Jason C. H. Chen, Ph.D.Professor of MIS
School of Business AdministrationGonzaga University
Spokane, WA 99223 [email protected]
http://barney.gonzaga.edu/~chen
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 2
Learning Objectives
1. Define the e-supply chain and describe its characteristics and components.
2. List supply chain problems and their causes.3. List solutions to supply chain problems provided by EC.4. Define c-commerce and list its major types.5. Describe collaborative planning and Collaboration,
Planning, Forecasting, and Replenishing (CPFR), and list their benefits.
6. Define intrabusiness EC and describe its major activities.7. Discuss integration along the supply chain.8. Understand corporate portals and their types and roles.9. Describe e-collaboration tools such as workflow and
groupware.
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 3
OPENING VIGNETTE : How General Motors Is Collaborating Online
• The Problem– Information regarding a new car design has to be
shared among a pool of approximately 20,000 designers and engineers in hundreds of divisions and departments at 14 GM design labs, some of which are located in different countries
– Communication and collaboration with the design engineers of the more than 1,000 key suppliers could mean 4 years to completion of a model
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 4
How General Motors Is Collaborating Online (cont.)
• The Solution– GM began by examining over 7,000 existing
legacy IT systems, reducing that number to about 3,000 and making them Web enabled
– A computer-aided design (CAD) program that allows 3D design documents to be shared online by both the designers (internal and external) and engineers
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 5
How General Motors Is Collaborating Online (cont.)
– Collaborative and Web conferencing software tools have radically changed the vehicle review process
– GM electronically sends its specifications for the seat to the vendor’s product data system allowing:
• Searching• Designing• Tooling• Testing in real time
– This expedites the process and cuts costs by more than 10%
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 6
How General Motors Is Collaborating Online (cont.)
• The Results– It now takes less than 18 months to bring a new
car to market – The change has produced enormous savings – Shorter cycle time enables GM to bring out
more new car models more quickly, providing the company with a competitive edge
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 7
How General Motors Is Collaborating Online (cont.)
• What we can learn…– Applications of EC that help reduce costs and
increase profits• collaborative commerce
• improvements along the supply chain
• B2E
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 8
End of the Vignette
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 9
8.1 E-Supply Chains`
• The success of organizations (private, public, and military) depends on their ability to manage the flow of materials, information, and money into, within, and out of the organization– Such a flow is referred to as
• Supply chain involves activities that take place during the entire product life cycle including the movement of information, money and individuals involved in the movement of a product or a service
supply chain
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 10
The Product Life Cycle
Introductory
Stage
Growth
Stage
Maturity
StageDecline Stage
Total
Market
Sales
Time
Total Market Profit
N
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 11
E-Supply Chains (cont.)
• Supply chain:
• E-supply chain: A supply chain that is managed electronically, usually with Web technologies
N
The flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 12
E-Supply Chains (cont.)
• Supply chain parts– Upstream supply chain
• activities of a manufacturing company with its suppliers (1st tiers) and their connections to their suppliers (2nd tiers)
•
– Internal supply chain• in-house processes for transforming the inputs from the suppliers
into the outputs•
– Downstream supply chain• activities involved in delivering the products to the final customers•
procurement is the major activity
major concerns are production management, manufacturing, and inventory control
attention is directed at distribution, warehousing, transportation, and after-sale service
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 13
E-Supply Chains (cont.)
(Suppliers)(Distributors/Customers)
(Firms)
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 14
The Value System: Interconnecting relationships between organizations
Upstreamvalue
Firmvalue
Downstreamvalue
N
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 15
E-Supply Chains (cont.)
• Managing supply chains– E-supply chain management (e-SCM): The
collaborative use of technology to improve the operations of supply chain activities as well as the management of supply chains
• The success of an e-supply chain depends on:
N
1. The ability of all supply chain partners to view partner collaboration as a strategic asset
2. Information visibility along the entire supply chain3. Speed, cost, quality, and customer service4. Integrating the supply chain segments more tightly
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 16
E-Supply Chains (cont.)
• E-supply chain consists of six processes:1. Supply chain replenishment
2. E-procurement
3. Collaborative planning
4. Collaborative design and product development
5. E-logistics
6. Use of B2B exchanges and supply webs
N
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 17
E-Supply Chains (cont.)
• Major infrastructure elements and tools of e-supply chains are:– Extranets– Intranets– Corporate portals– Workflow systems and tools– Groupware and other collaborative tools– EDI and EDI/Internet
N
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 18
8.2 Supply Chain Problems and Solutions
• Typical problems along the supply chain1. Slow and prone to errors because of the
length of the chain involving many internal and external partners
2. Large inventories without the ability to meet demand Incorrect demand forecasting
3. Insufficient logistics infrastructure Vehicle failures to road conditions
4. Poor quality
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 19
Supply Chain Problems (cont.)
• : Erratic shifts in orders up and down supply chains– Creates production and inventory problems– Stockpiling can lead to large inventories
• Effect is handled by information sharing -
N
collaborative commerce (c-Commerce)
Bullwhip effect
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 20
Supply Chain Solutions
• Major solutions provided by an EC approach and technologies
1. Order taking
2. Order fulfillment
3. Electronic payments
4. Inventories can be minimized
5. Collaborative commerce
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 21
8.3 Collaborative Commerce
• Collaborative commerce
(c-commerce): The use of digital technologies that enable companies to collaboratively plan, design, develop, manage, and research products, services, and innovative EC applications (e.g., GM opening case)
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 22
Collaborative Commerce (cont.)
• Major benefits (on organizations’ performance) are:
• As a result of:– fewer stock outs– less exception processing– reduced inventory throughout the supply chain– lower materials costs– increased sales volume– increased competitive advantage
cost reduction, increased revenue,better customer retention
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 23
(Linear)
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 24
(Inter-networked)
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 25
Collaborative Commerce (cont.)
• Information sharing between retailers and suppliers: P&G and Wal-Mart– Wal-Mart provides P&G access to sales
information on every item P&G makes for Wal-Mart
– Accomplished done electronically• P&G has accurate demand information• Wal-Mart has adequate inventory
– How?
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 26
Exhibit 8.3 Collaborative Commerce Example: Target’s Extranet (an example, this model can be also employed to other apps)
Web ApplicationsWeb Applications
Customer servicePortal servicesInventory managementQuality assuranceSupply chainProcess designNew productsBudget controlE-procurement
Public InternetPublic Internet GE Private VANGE Private VAN
Connection Via Connection Via
VPN, encryptionGlobal reachadded
Private lineSecure
SecuritySecurity
Access controlRegistrationAuthenticationDigital signatureCertification
GEInterBusiness
Partner extranet
Legacy System
EDIERP
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 27
Collaborative Commerce (cont.)
• Collaborative commerce and knowledge management– Knowledge management :
– Gathering and making available experts’ opinions, as well as providing them to partners
– Learning is also facilitated by KM
• C-commerce is essentially an integration of KM, EC and collaboration tools and methodologies that are designed to carry out transactions and other activities within and across organizations.
the process of capturing or creating knowledge
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 28
Collaborative Commerce (cont.)
• Barriers to c-commerce:
– technical reasons involving integration, standards, and networks
– security and privacy concerns over who has access to and control of information stored in a partner’s database
– internal resistance to information sharing and to new approaches
– lack of internal skills to conduct collaborative commerce– Organizational culture shock: trust
lack of defined and universally agreed-on standards
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 29
8.4 Collaborative Planning and CPFR
• In collaborative planning, business partners—all have real-time access to point-of-sale order information– manufacturers– suppliers – distribution partners– other partners
• What is CPFR?
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 30
Company decideson participating
suppliers
Company decideson participating
suppliers
Agreement on scope of
collaboration
Agreement on scope of
collaboration
Examine thevalue chain
Examine thevalue chain
Selection ofSupporting software(e.g., JDA software)
Selection ofSupporting software(e.g., JDA software)
Develop jointly the forecasts, resolve
forecasts’ exceptions
Develop jointly the forecasts, resolve
forecasts’ exceptions
Use result tomake inventory andscheduling decision
Use result tomake inventory andscheduling decision
Determine on specific project (e.g.,
demands forecastlogistics forecast)
Determine on specific project (e.g.,
demands forecastlogistics forecast)
Exhibit 8.5 The Collaborative Planning CPFR Process
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 31
8.5 Internal Supply Solutions, Intrabusiness, and B2E
• EC: E-commerce activities conducted within an organization
• (B2E): Intrabusiness EC in which an organization delivers products or services to its employees
Intrabusiness
Business-to-employee
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 32
Internal Supply Solutions, Intrabusiness, and B2E (cont.)
• Activities between business units– Large corporations consist of independent units, called
strategic business units (SBUs)—transactions can be easily automated and performed over the organization’s intranet
– Special network may be constructed to support communication, collaboration, and execution of transactions
• Activities among corporate employees– A system by which employees can collaborate on an
individual (sometimes nonbusiness) level– Via classified ads, corporate equipment may be sold to
employees for private use
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 33
8.6 Integration along the Supply Chain
• Enabling integration and the role of standards and Web services– Integration involves connectivity, compatibility,
– Applications, data, processes, and interfaces must be integrated
– Middleware, standards and protocols have been developed to facilitate (ease) integration
security, and scalability
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 34
8.7 Corporate (Enterprise) Portals
• Corporate (enterprise) portal:
• Corporate portals offer employees, business partners, and customers an organized focal point for their interactions with the firm
A gateway for entering a corporate Web site, enabling communication, collaboration, and access to company information
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 35
Corporate (Enterprise) Portals (cont.)
• Types of corporate portals1.
portal for suppliersportal for customersportal for employeessupervisor portalsmobile portals—accessible via mobile devices,
especially cell phones and PDAs
Generic portals
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 36
Corporate (Enterprise) Portals (cont.)
2. Functional portals– : Portals that store data
and enable users to navigate and query these data
– : Portals that allow collaboration
Information portals
Collaborative portals
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 37
Corporate (Enterprise) Portals (cont.)
• Justifying portals– Offer a simple user interface for finding and navigating
content via a browser
– Improve access to business content and increase the number of business users who can access information, applications, and people
– Offer access to common business applications from anywhere
– Offer the opportunity to use platform-independent software
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 38
8.8 Collaboration-Enabling Tools:From Workflow to Groupware
• Workflow: The movement of information as it flows through the sequence of steps that make up an organization’s work procedures
• Workflow systems: Business process automation tools that place system controls in the hands of user departments to automate information processing tasks
• Workflow management: The automation of workflows, so that documents, information, and tasks are passed from one participant to the next in the steps of an organization’s business process
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 39
Collaboration-Enabling Tools:Workflow (cont.)
• Three major categories of workflow applications:–
• project-oriented and collaborative types of processes• goal: to empower knowledge workers
– • mission-critical, transaction-oriented, high-volume
processes• goal: to improve productivity and quality of BP.
– • cross between collaborative and production• goal: to reduce clerical costs in systems with a low
volume of complex transactions.
Collaborative workflow
Production workflow
Administrative workflow
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 40
Collaboration-Enabling Tools:Workflow (cont.)
• Benefits of workflow management systems– Improved control of business processes– Improved quality of services– Lower staff training costs– Lower management costs– Improved user satisfaction
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 41
Collaboration-Enabling Tools:Groupware
• Groupware:
• Provide a way for groups to share resources and opinions
• Groupware technology products are fairly inexpensive and can be easily incorporated into existing IS.
Software products that support collaboration, over networks, among groups of people who share a common task or goal
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 42
Collaboration-Enabling Tools: Group Decision Support Systems (GDSS)
• Electronic (Virtual) meetings: Online (Web-based) meetings whose members are in different locations, frequently in different countries
• Group decision support system (GDSS): An interactive computer-based system that facilitates the solution of semistructured and unstructured problems by a group of decision makers
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 43
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 44
Task Environment
User
The DSS
SoftwareSystem
DBMS MBMS
DGMS
Components of the DSS
DBMS: DataBase Management Systems
MBMS: ModelBase Management Systems
DGMS: DialoGue Management Systems
Multiple participants(the legislators)
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 45
Components of GDSS
HARDWARE
PROCEDURES
SOFTWARE
PEOPLE
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 46
Burr-Brown GDSS session room
Facilitator’s station
Participants’ stations
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 47
Framework: Group Decision SupportDuration of Decision-Making Session
N
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 48
Figure: A Model of a GDSS
ElectronicBrainstorming(generate ideas)
Issue Analyzer(organize and
sort the comments)
Topiccommentor
(examine each of the divisional 5-
year plans)
#9Voting
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 49
Teleconferencing
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 50
Training room
USAF Fusion center USAF Fusion center
DSS Decision center Airline Institute USAF Air Staff Innovation center
Teleconferencing
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 51
Collaboration-Enabling Tools: GDSS (cont.)
• Major characteristics of a GDSS– Its goal is to support the process of group
decision makers by providing automation of subprocesses using information technology tools
– It is a specially designed information system, not merely a configuration of already-existing system components.
– It encourages generation of ideas, resolution of conflicts, and freedom of expression
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 52
• GDSSs improve the decision-making process by:– providing structure to the planning process– support parallel processing of information and
idea generation– make larger meetings possible
Collaboration-Enabling Tools: GDSS (cont.)
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 53
Decision Support and Intelligent Systems
DifferentPlace
SamePlace
Web-based GSSWhiteboardEmail, V-mailWorkflow management systemDocument sharingComputer conferencing with memory
Web-based GSSWhiteboardDocument sharingVideoconferencingAudioconferencingComputer conferencingEmail, V-mail
Same Time
GSS in a Decision Room Web-based GSS Workflow management systemDocument sharingEmail, V-mail
GSS in a Decision Room Web-based GSSMultimedia Presentation SystemsWhiteboardDocument sharing
Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson, 6th edition.
Different Time
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 54
Collaboration-Enabling Tools (cont.)
• Real-time collaboration (RTC) tools help companies bridge time and space to make decisions and collaborate on projects by supporting synchronous communication of graphical and text-based information
• Interactive white boards• Screen sharing• Virtual reality (VR): System that delivers
interactive computer generated 3D graphics to a user through a head-mounted display
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 55
Collaboration-Enabling Tools (cont.)
• Implementation issues– An effective collaborative environment is
necessary– Connecting collaborative tools with file
management products on an organization’s intranet is necessary
– Protocols to change the read-only Web to a truly collaborative environment
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 56
Intelligence
Activities
Search for and identify conditions requiring a decision
Information systems should scan the internal organization and the external environment and help identify problems and opportunities.
Develop and evaluate alternative courses of action
Information systems should help generate and evaluate decision alternatives.
Choice
Activities
Design
Activities
Select a course of action and monitor its implementation
Information system should help emphasize and prioritize decision alternatives and provide feedback on the implemented decision
A model of the decision making process. (Simon’s 3+1 Phases)
A model of the decision making process. (Simon’s 3+1 Phases)
Implement and monitor the success of the decision
Information system should provide feedback on the implemented decision.
Implementation
Activities
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 57
Managerial Issues
1. How difficult is it to introduce e-collaboration?
2. How much can be shared with business partners? Can they be trusted?
3. Who is in charge of our portal and intranet content?
4. Who will design the corporate portal?5. Should we conduct virtual meetings?
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 58
Summary
1. The e-supply chain, its characteristics, and components: Digitized and automated flow of information throughout the supply chain and managing it via the Web
2. Supply chain problems and their causes: access to inventories, lack of supplies when needed, need for rush orders, deliveries of wrong materials or to wrong locations, and poor customer service.
3. Solutions to supply chains problem provided by EC: automate/expedite order taking, speed order fulfillment, provide e-payments, control inventories, provide for correct forecasting and scheduling, and improve collaboration among partners
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 59
Summary (cont.)
4. C-commerce: Definitions and types: planned use of digital technology by business partners.
5. Collaborative planning: concentrates on demand forecasting and on resource and activity planning along the supply chain. CPFR: business strategy that develops standard protocols and procedures for collaboration
6. Intrabusiness: all EC initiatives conducted within an organization.
Prentice Hall & Dr. Chen, Dr. Chen, Electronic CommerceElectronic Commerce 60
Summary (cont.)
7. Intrabusiness: all EC initiatives conducted within an organization.
8. Integration along the supply chain: critical to the success of companies.
9. Types and roles of corporate portals: for suppliers, customers, employees, and supervisors.
10. Collaborative tools: workflow, groupware, GDSS, devices that facilitate product design