The Impact of E-Business

1. The Impact of E-Business Dr. Simon Croom March 2003

2. Some objectives for this session: • To provide an insight into the nature of ‘E-Business’ implementation across Supply Chains using a local case example • To examine some of the main implications for your business & your chains • To provide an opportunity to benefit from our research study • To engage in dialogue, debate and disagreement!

4. Some definitions • ‘E-Business’ - the conduct of business transactions, business planning and control, communications and information sharing over a common I.S. platform such as the web. • ‘E-Commerce’ The conduct of business transactions and trading over a common I.S. platform such as the web.

5. Why focus on Supply Chains? • Because the Internet is an Inter-Organisational Communication Channel • Because E-Business systems are both intra- and inter-organisational • Because organisations are adopting E-Business to manage within and across supply chains

6. What can YOU do? • Understand the stresses in your operations & supply chains • Be aware of the impact of ‘E’ on those stress points • Participate (FREE!) in our benchmarking study at www.supply-chain.org.uk

7. To AUDIT your Business • Logon to http://www.supply-chain.org.uk • Click on the SPA Methodology link • Login to the ht2 site using: • Username SPA** • Password SPA** (Same as your username) • I will allocate your number • Complete the survey • Your results will be emailed to you in early April as a benchmark report

8. Three Main areas of E-Business Activity Knowledge sharing e.g. product development, customer strategies Marketplaces - for trading Supply Chain Collaboration/ synchronisation

9. Starting with the Customer’s Requirement • The objective is to automate the ENTIRE supply chain from product and service selection through receipt. select requisition approve status receive • Using solutions that offer real-time interactivity with trading partners and customers worldwide

11. E-Business In the Supply Chain - Five Phases of Evolution 5 4 3 2 1

12. Supply Chain eBusiness models Wave 1- Emphasis on Promoting to Customers • EDI High speed complex data transmission to core customers & suppliers • Static publishing, email Catalogues & information to users 1998-2001

13. E-Business In the Supply Chain - Five Phases of Evolution 5 4 3 2 1

14. Seller-side or buyer-side system connects with existing transaction systems Sales Order Systems - Web-based order taking Electronic Funds Transfer via BACS system Supply Chain eBusiness models Wave 2- Emphasis on Transaction Systems 2000-3

15. How transactions may be executed • Public Web • Each Seller offers products at list price Buyer Supplier Ad hoc • Exchange • Commodity Trading Venue (Auction) Exchange Venue Buyer Commodity • Market Place • Independent Org provides access to many suppliers Market Suppliers Buyer • Seller Extranet • Seller access to pre-neg products and services Supplier Negotiated Buyer • Company Hub • Individual Companies manage multiple supplier Contracts Suppliers Buyer

16. How E-Business Can Impact on your Demand

17. Demand Profiles? Cyclical Stable Volatile

18. Matching Supply Chain Design to Demand Marshall Fisher. HBR Mar-Apr 1997

19. Streamlines strategic and off—contract buying Leverages dynamic, Internet-based pricing Dramatically lowers Cost of Goods A large channel to new buyers Cost effective method to liquidate inventory More revenue from existing customers A major phenomenon: electronic auctions Auctions May Benefit Buyers and Suppliers Reverse Auctionsfor Buyers Auctionsfor Suppliers

20. E-Business In the Supply Chain - Five Phases of Evolution 5 4 3 2 1

21. E-Procurement system integrates with enterprise control systems CRM system integrating across the organisation ERP system implementation Supply Chain eBusiness models Wave 3- Emphasis on Interfacing with Supply Chain 2002/5

22. E-Business In the Supply Chain - Five Phases of Evolution 5 4 3 2 1

23. Extended enterprise solution - integrating marketplaces, portals and auctions Procurement and Sales via an E-Portfolio ‘Middleware’ adoption to integrate legacy systems Supply Chain eBusiness models Wave 4- Emphasis on Coordination across the Supply Chain 2003/12

24. $200bn Emerging industry portals = many examples Auto Industry Example Covisint Global Supply Chain worth $178000bn

25. E-Business In the Supply Chain - Five Phases of Evolution 5 4 3 2 1

26. Integrated CAD/CAM/CSCM Tracking, Global Positioning as integral part of E-Fulfilment systems Supply chain positioning a key strategic issue Supply Chain eBusiness models Wave 5- Emphasis on Integrating the Supply Chain 2002/10

27. E-Business In the Supply Chain - Five Phases of Evolution 5 4 3 2 1

28. E-Business project Critical Success Factors • If you can’t support the business case, then start again • E-strategy must be seen as Cross-functional • Based on Business first, ‘e’ second • Clear E-Strategy project structure • Technology experts in a key project role • E-strategies identify new channels to customers - do you want them?

29. E-Business project Critical Success Factors - 2 • What have customers said about CRM and E-Business? • What are the implications of CRM for existing processes, strategies and organisation? • What are the skills needed? • Where are the development needs? • Be prepared to spend 75% of time presenting internally to CRM teams,sales and others.

30. E-Business project Critical Success Factors - 3 • Integration with operations and logistics • Logistics channel design MUST be an integral element of CRM strategy implementation • Understand the impact of E-Business on demand profiles • What are the implications for relationships with existing channels. • Identify the portfolio: Which products/services/customers via which channel?

31. It’s not about technology...

32. ….but new ways of doing business