Quản trị kinh doanh - E - Commerce and supply chain management

1E-Commerce and Supply Chain Management2Learning ObjectivesDescribe the structure of supply chainsDescribe the bullwhip effectDescribe the issues affecting supply chain managementDescribe B2B and B2C electronic commerceDescribe global issues in supply chain management3Learning Objectives (continued)Describe the role of purchasing in supply chain managementDescribe the ethics of supplier managementDescribe sourcing issuesDescribe strategic purchasing partnershipsDescribe supply chain distribution4Learning Objectives (continued)Describe integrated supply chain managementDescribe supply chain performance measuresDescribe trends in supply chain management5Supply Chains & SCMA supply chain is the network of all the activities involved in delivering a finished product/service to the customerSourcing of: raw materials, assembly, warehousing, order entry, distribution, deliverySupply Chain Management is the vital business function that coordinates all of the network linksCoordinates movement of goods through supply chain from suppliers to manufacturers to distributorsPromotes information sharing along chain like forecasts, sales data, & promotions6Components of a Supply ChainExternal Suppliers– source of raw materialTier one supplier supplies directly to the processorTier two supplier supplies directly to tier oneTier three supplier supplies directly to tier twoInternal Functions include – processing functionsProcessing, purchasing, planning, quality, shippingExternal Distributors transport finished products to appropriate locationsLogistics managers are responsible for traffic management and distribution management 7Components of a Supply ChainExternal Distributors transport finished products to appropriate locationsLogistics managers are responsible for managing the movement of products between locations. Includes;traffic management – arranging the method of shipment for both incoming and outgoing products or materialdistribution management – movement of material from manufacturer to the customer8A Basic Supply ChainComponents of a Supply Chain10The Bullwhip EffectBullwhip effect - the inaccurate or distorted demand information created in the supply chainVolatility amplification along the networkIncrease in demand variability as we move upstream away from the marketMainly because of lack of communication and coordinationDelays in information and material flowsCauses are generated by: demand forecasting updating,order batching, price fluctuations, rationing andgaming - Ask for more than what is needed11The Bullwhip EffectCounteracting the Effect: Change the way suppliers forecast product demand by making this information available at all levels of the supply chainShare real demand information (POS terminals)Eliminate order batching Stabilize pricingEliminate gaming12Issues Affecting Supply Chain ManagementInformation technology – enablers include the Internet, Web, EDI, intranets and extranets, bar code scanners, and point-of-sales demand informationE-commerce and e-business – uses internet and web to transact businessWhat is e-commerce13 E-commerce is a short version of the term Electronic Commercetransactions related to online buying and selling of products or servicesdone using electronic systems such as the Internet and other computer networkspenetration and spread of the internet has fuelled e-commerceExamples os e-commerce are electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systemsdefinition of e-commerce in modern times implies that it typically uses the World Wide Web at least at any point in the transaction's lifecycleOnline retailers are sometimes known as e-tailersonline retail is sometimes known as e-tailTypes of e-commerce14B2B: E-commerce that is conducted between businesses is referred to as Business-to-business (1) open to the entire public or (2) limited to a group of businesses who have been part of the specific groupTransaction cost reduced through reduction insearch costscosts of processing transactions (e.g. invoices, purchase orders and payment schemes)cost in trading processes eliminating intermediaries and distributorsincrease in price transparencycreates supply-side cost-based economies of scaleTypes of e-commerce..contdB2C Commercecommerce between companies and consumersinvolves customers gathering information; purchasing physical goods or information goods online retailing companies such as Amazon.com, Drugstore.com, Beyond.com, Flipkart.com, Lenskart.comreduces transactions costsincreasing consumer access to informationreduces market entry barriers15..ContdB2G e-commercecommerce between companies and the public sectoruse of the Internet for public procurementlicensing procedures16Types of e-commerce..contdC2C e-commercecommerce between private individuals or consumersonline auctionsauctions facilitated at a portal, such as eBay, which allows online real-time bidding on items being sold in the Web; peer-to-peer systems, such as the Napster model (a protocol for sharing files between users used by chat forums similar to IRC) and other file exchange and later money exchange models; and classified ads at portal sites such as Excite Classifieds and eWanted (an inter- active, online marketplace where buyers and sellers can negotiate and which features “Buyer Leads & Want Ads”).Consumer-to-business (C2B) transactions involve reverse auctions, which empower the consumer to drive transactions. A concrete example of this when competing airlines gives a traveler best travel and ticket offers in response to the traveler’s post that she wants to fly from New York to San Francisco. There is little information on the relative size of global C2C e-commerce. However, C2C figures of popular C2C sites such as eBay and Napster indicate that this market is quite large. These sites produce millions of dollars in sales every day17Factors affecting e-commerce Major forces fuelling e-commerce economic forces, marketing and customer interaction forces, and Technologycommunications costs, low-cost technological infrastructure, speedier and more economic electronic transactions with suppliers, lower global information sharing and advertising costs, andcheaper customer service costnetworking of corporations, suppliers, customers/clients, and independent contractors into one community Networking of the various departments within a corporation, and of business operations and processes18Factors affecting e-commerce..contd..critical business information to be stored in a digital formretrieved instantly transmitted electronicallyconnecting businesses (small, medium or large) to trading partnerssourcing out supplies, buying and selling goods and services online in real timecenter for management of content and the processing of business transactionssupport services such as financial clearance and information servicesregional, vertical and industry-specific interoperable B2B e-markets across the globe19Factors affecting e-commerce..contd..provide their target consumers with more detailed product and service information using e-commercelogistical and technological infrastructure to other retailersexpertise in credit analysistracking ordersproduct comparison systemsdigitizing content, compression and the promotion of open systems technology convergence of telephone services, television broadcast, cable television, and Internet access 20E-commerce components A corporate Web site with e-commerce capabilitiesA corporate intranet so that orders are processed in an efficient manner IT-literate employees to manage the information flows and maintain the e-commerce systemBanking institutions that offer transaction clearing servicesNational and international logisticscost-efficient transport of small and big packages critical mass of the population with access to the Internet and disposable income Firms/Businesses with order fulfilling capability21E-commerce components contdA legal framework governing e-commerce transactionsLegal institutions that would enforce the legal framework A robust and reliable Internet infrastructure; A pricing structure that doesn’t penalize consumers for spending time on and buying goods over the Internet global collection of networks connected to share information common set of protocols22E-commerce components23Important component of e-commerce based firm is the websitewebsite should have technology that will make it easier for its customers to navigatesite should offer every single feature necessaryfully-functional and sustainable ecommerce web sitestable server for hosting provide customer specific servicestechnology partners who constantly upgrade the features as well as technologyhelp business partners such as logistics partners and suppliers to share and exchange business dataAlternatively SaaS can be used for running these services (reduce cost)Business transformation through e-commerceLinking stakeholders through e-commerceSupply chain management integrationThe product flowThe information flowThe finances flowShared data in diverse database systems, data warehouseSharing data “upstream” (with a company’s suppliers) and “downstream” (with a company’s clients)shared digital business infrastructureincluding integrated value chainse-business management modelbusiness policies consistent with e-commerce laws, teleworking/virtual work, distance learning, incentive schemes2425SCM FactorsSCM must consider the following trends, improved capabilities, & realities:Consumer Expectations and Competition – power has shifted to the consumerGlobalization – capitalize on emerging marketsGovernment Regulations and E-Commerce – issues of Internet government regulationsEnvironment Implications of E-Commerce – recycling, sustainable eco-efficiency, and waste minimization26Global SCM FactorsManaging extensive global supply chains introduces many complicationsGeographically dispersed members - increase replenishment transit times and inventory investmentForecasting accuracy complicated by longer lead times and different operating practicesExchange rates fluctuate, inflation can be highInfrastructure issues like transportation, communication, lack of skilled labor, & scarce local material suppliesProduct proliferation created by the need to customize products for each market Page 27How many countries does it take to make a coat To make this jacket for the UK market, Hong Kong garment producer Li & Fung ordered materials from factories in five Countries and had them delivered to Thailand, where the jacket was stitched together. Using a network of web-sites, Li & Fung stays in touch with its worldwide suppliers and can compress the time it takes to get items into stores.China, the world’s largestproducer of cotton made the linerThailand, a leading exporter ofimitation fur, ringed the hoodTaiwan, which specialises in makingmaterial for outdoor clothing, producedthe shell and fleeceJapan, the globe’s biggest producerof stainless steel for zippers, put itsteeth in this zipperGermany, which gave the worldthe snap fastener in the 1880s,sent the snaps28Sourcing IssuesWhich products to produce in-house and which are provided by other supply chain membersVertical integration – a measure of how much of the supply chain is owned by the manufacturerBackward integration – owning or controlling of sources of raw material and component partsForward integration – owning or control the channels of distributionVertical integration related to levels of insourcing or outsourcing products or services 29Insourcing vs. OutsourcingWhat questions need to be asked before sourcing decisions are made?Is product/service technology critical to firm’s success?Is product/service a core competency? Is it something your company must do to survive?30Make or Buy AnalysisAnalysis will look at the expected sales levels and cost of internal operations vs. cost of purchasing the product or service31Example: Make-or-Buy analysis- Geraldine and Mawusey, have decided to open a bagel shop. Their first decision is whether they should make the bagels on-site or buy the bagels from a local bakery. If they buy from the local bakery they will need airtight containers at a fixed cost of $1000 annually. They can buy the bagels for $0.40 each. If they make the bagels in-house they will need a small kitchen at a fixed cost of $15,000 annually. It will cost them $0.15 per bagel to make. They believe they will sell 60,000 bagels.Geraldine and Mawusey want to know if they should make or buy the bagels. FCBuy + (VCBuy x Q) = FCMake + (VCMake x Q) $1,000 + ($0.40 x Q) = $15,000 + ($0.15 x Q) Q = 56,000 bagelsSince the costs are equal at 56,000 bagels and Geraldine and Mawusey expect to use 60,000 bagels, they should make the bagels in-house32The Role of PurchasingPurchasing role has attained increased importance since material costs represent 50-60% of cost of goods sold Developing supplier relationships is essentialDetermining how many suppliers to useDeveloping partnerships33Critical Factors in Successful Partnership RelationsCritical factors in successful partnering include;Impact – attaining levels of productivity and competitiveness that are not possible through normal supplier relationshipsIntimacy – working relationship between two partnersVision – the mission or objectives of the partnership34Critical Factors in Successful Partnership RelationsBenefits of PartneringEarly supplier involvement (ESI) in the design processUsing supplier expertise to develop and share cost improvements and eliminate costly processesShorten time to marketHave a long-term orientationShare a common visionAre strategic in natureShare short/long term plansShare informationDriven by end-customer needsShare risks and opportunities35Supply Chain DistributionWarehouses involved in supply chain distributions and includePlant warehousesRegional warehousesLocal warehousesWarehouses can either beGeneral – used for long-term storageDistribution – used for short-term storage, consolidation, and product mixing36Supply Chain Distribution - continuedTransportation consolidation – warehouses consolidate less-than-truckload (LTL) quantities into truckload (TL) quantitiesProduct mixing – warehouse value added customer service of grouping a variety of products into a direct shipment to the customer37Supply Chain Distribution - continuedServices are offered can improve customer service by moving goods closer to the customer and thus reducing replenishment timeCrossdocking or movement of material without storage and order-picking material while still performing the receiving and shipping functions.38Supply Chain Distribution - continuedRadio Frequency Identification Technology (RFID) – automated data collection technology which relies on radio waves to transfer data between reader and RFID tagThird-party Service Providers – ease of developing an electronic storefront has allowed the discovery of suppliers from around the world39Integrated SCMImplementing integrated SCM requires: Analyzing the whole supply chainStarting by integrating internal functions firstIntegrating external suppliers through partnerships Manufacturer’s GoalsReduce costsReduce duplication of effortImprove qualityReduce lead timeImplement cost reduction programInvolve suppliers earlyReduce time to marketSupplier’s GoalsIncrease sales volumeIncrease customer loyaltyReduce costImprove demand dataImprove profitability40Supply Chain MeasurementsMeasuring supply chain performanceTraditional measures include;Return on investmentProfitabilityMarket shareRevenue growthAdditional measuresCustomer service levelsInventory turnsWeeks of supplyInventory obsolescence41Supply Chain Performance MeasurementCustomer demands for better-quality requires company’s to develop ways to measure improvementsSome measurements includeWarranty costs Products returnedCost reductions allowed because of product defectsCompany response timesTransaction costs42Current Trends in SCMIncreased use of electronic marketplace such asE-distributors – independently owned net marketplaces having catalogs representing thousands of suppliers and designed for spot purchasesE-purchasing – companies that connect on-line MRO suppliers to business who pay fees to join the market, usually for long-term contractual purchasing43Current Trends in SCM - continuedIncreased use of electronic marketplace such asValue chain management – automation of a firm’s purchasing or selling processesExchanges – marketplace that focuses on spot requirements of large firms in a single industryIndustry consortia – industry-owned markets that enable buyers to purchase direct inputs from a limited set of invited suppliersDecreased supply chain velocity due to greater distances with greater uncertainty and generally less efficient.44SCM Across the Organization SCM changes the way companies do business.Accounting shares SCM benefits due to inventory level decreasesMarketing benefits by improved customer service levelsInformation systems are critical for information sharing through PSO data, EDI, RFID, the Internet, intranet, and extranetsPurchasing is responsible for sourcing materialsOperations use timely demand information to more effectively plan production schedules45HighlightsEvery organization is part of a supply chain, either as a customer or as a supplier. Supply chains include all the processes needed to make a finished product, from the extraction of raw materials through the sale to the end user. SCM is the integration and coordination of these efforts.The bullwhip effect distorts product demand information passed between levels of the supply chain. The more levels that exist, the more distortion that is possible. Variability results from updating demand estimates at each level, order batching, price fluctuations, and rationing46Highlights (continued)Many issues affect supply chain management. The Internet, the WEB, EDI, intranets, extranets, bar-code scanners, and POS data are SCM enablers.B2B and B2C electronic commerce enable supply chain management. Net marketplaces bring together thousands or suppliers and customers. Allowing for efficient sourcing and lower transaction costs.47Highlights (continued)Global supply chains increase geographic distances between members, causing greater uncertainty in delivery times.Purchasing has a major role in SCM. Purchasing is involved in sourcing decisions and developing strategic long-term partnerships.48Highlights (continued)Ethics in supply management is an ongoing concern. Since buyers are in a position to influence or award business, it is imperative that buyers avoid any appearance of unethical behavior or conflict of interest.Companies make insourcing and outsourcing decisions. These make-or-buy decisions are based on financial and strategic criteria.49Highlights (continued)Partnerships require sharing information, risks, technologies, and opportunities. Impact, intimacy, and vision are critical to successful partnering.Supply chain distribution requires effective warehousing operations. The warehouses provide transportation, consolidation, product mixing, and service.504 Highlights (continued)Integrated SCM usually begins with the manufacturer integrating internal processes first. The, the company tries to integrate the external suppliers. The last step is integrating the external distributors.51Highlights (continued)A company needs to evaluate the performance of its supply chain. Regular performance metrics (ROI, profitability, market share, customer service levels, etc.) and other measures that reflect the objectives of the SC are used.The emergence of net marketplaces has significantly affected SCM. As supply chains become longer, it is likely that supply chain velocity will decrease. It is possible that a more strategic and integrated approach is needed to advance SCM to the next level. akpe na mi!54 Any Question?