strategic and tactical tools for e-business - supply-chain-management-e-procurement

7/31/2019 Strategic and Tactical Tools for E-business - Supply-chain-management-e-procurement

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2011 ITM, CBS | 1

Lecture 7:Supply Chain Management & E-procurement

B1 Strategic and tactical tools for e-business

Michelle C. Antero

Department of ITM

Copenhagen Business School


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Session 7 - Readings

n Chaffey, D. (2009). E-business and E-commercemanagement, Chapter 6: Supply Chain

Management, pp. 330-379.

n Chaffey, D. (2009). E-business and E-commercemanagement, Chapter 7: E-procurement, pp.380-411.

2

eBusinessSupply Chain

Management &E-Procurement

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Learning Outcomes

nIdentify the main elements of supply chainmanagement and their relationship to the value

chain and value networks

nAssess the potential of information systems tosupport supply chain management and the

value chain.

n Identify the benefits and risks ofe-procurement

nAnalyse procurement methods to evaluate costsavings

nAssess different options for integration oforganizations information

systems with e-procurement suppliers. 3



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Learning Outcomes

nIdentify the main elements of supply chainmanagement and their relationship to the value

chain and value networks

nAssess the potential of information systems tosupport supply chain management and the

value chain.

n Identify the benefits and risks ofe-procurement

nAnalyse procurement methods to evaluate costsavings

nAssess different options for integration oforganizations information

systems with e-procurement suppliers. 4



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Management issues

n Which technologies should we deploy forsupply chain management and how should

they be prioritized?

n Which elements of the supply chain should bemanaged within and beyond the organizationand how can technology be used to facilitate

this?

n What are the practical issues with online supplychain management?



16 March 2010


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SCM some definitions

n Supply chain management (SCM) Thecoordination of all supply activities of anorganization from its suppliers and partners toits customers

n Upstream supply chain Transactions betweenan organization and its suppliers andintermediaries, equivalent to buy-side e-commerce

n Downstream supply chain Transactionsbetween an organization and its customers andintermediaries, equivalent to sell-side e-commerceeBusiness

Supply Chain


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Members of the supply chain:

(a) simplified view, (b) including intermediaries (Figure 6.2)


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A typical supply chain for a B2B company (Figure 6.5 )



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(a)Benefits of supply chain management,Note: respondents could select all benefits that apply

Figure 6.1 Source: PMP (2008)



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(b) realization of benefits.Note respondents could select all benefits that apply

(Figure 6.1 Continued) Source: PMP (2008)


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Push and pull approaches to supply chain management(Figure 6.7)


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Push and pull approaches to supply chain management(Figure 6.7 - Continued)


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The characteristics of vertical integration, vertical

disintegration and virtual integration (Figure 6.10)

Options for restructuring the supply chain


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Benefits of e-SCM

n Increased efficiency of individual processesn Reduced complexity of the suppy chain

(disintermediation)

n Improved data integration between elements ofthe supply chain

n Reduced costs through ease of dynamicoutsourcing

n Enabling innovation and customerresponsiveness



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Examples of e-SCM tools

n Emailn Web-based orderingn EDI of invoices and paymentn Web-based order trackingn

RFID (Radio Frequency Identification)



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Popularity of different e-business applications in Europeaccording to company size Figure 6.12Source: European Commission (2008)

Examples of e-SCM tools



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Figure 6.8 Two alternative models of the value chain: (a) traditional value chainmodel, (b) revised value chain model

Source: Figure 6.4(b) adapted from Deise et al. (2000)


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E-procurement


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Management issues

n What benefits and risks are associated withe-procurement?

n Which method(s) of e-procurement shouldwe adopt?

n What organizational and technical issues areinvolved in introducing e-procurement?



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How important is procurement?

We estimate that for every dollar a companyearns in revenue, 50 cents to 55 cents isspent on indirect goods and servicesthings like office supplies and computerequipment.

That half dollar represents an opportunity:By driving costs out of the purchasing

process, companies can increase profits

without having to sell more goods.Hildebrand (2002)



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Key procurement activities within an organization (Figure 7.1)


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The 5 rights of e-procurement

n at the right pricen delivered at the right timen are of the right qualityn of the right quantityn from the right source.Baily et al., 1994



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Benefits of e-procurement

n Reduced purchasing cycle time and costn Enhanced budgetary controln Elimination of administrative errorsn Increased buyers productivityn Lowering prices through product

standardization and consolidation of buys

n Improve information managementn Improve payment process



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Barriers to adoption of e-procurement

n Competition issuesn Possible negative perception from

suppliers

n Negotiated procurement benefits may beshare with other exchange users who maybe competitors

n Creation of catalogues can be a long andcostly process

n Culture profile within organizationseBusinessSupply Chain


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2011 ITM, CBS | 25Use of different information systems for different aspects of thefulfilment cycle (Figure 7.4 )

Elements of an e-procurement system



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The three main e-procurement model alternatives for buyers

(Figure 7.7 )



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Ford supplier portal provided by Covisint (Figure 7.11)Source: Covisint.com



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Supplier route to government portal (www.supply2.gov.uk)

Figure 7.12



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Types of Procuring

n Systematic sourcingn Negotiated contract with regular suppliers

n Spot sourcingn Commoditized item which is less important to

know credibility



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Risks and Impacts of E-procurement

n Organizational risksn Failure to achieve real cost reductionsn Technology Risks



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n Solve the following examinationquestions in Chaffey p. 377 # 2, # 4 ,

#6 , # 7

n Do sub question 1 in activity 7.1 inChaffey p. 385 (10 min.)

n Solve the following examinationquestions in Chaffey p. 409: #1, # 4

#7, #8

Exercise Questions



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strategic and tactical tools for e-business - supply-chain-management-e-procurement

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