IS-6 Supply Chain Management & e-Commerce

1. IS-6 Supply Chain Management & e-Commerce Supply Chain World - Europe Wednesday, September 22, 1999 Hotel Okura, Amsterdam

2. Amsterdam 1999 Supply Chain Management & e-Commerce (IS-6) Speakers : Shahpur Patell ICI plc shahpur_patell@ici.com Richard Roy Infobank Richard.Roy@infobank.co.uk Adrian Axtell Argos plc adrian.axtell@argos.co.uk Session chaired by: Mary Murphy-Hoye Intel Corporation mary.c.murphy-hoye@intel.com

3. Setting the Stage Mary Murphy-Hoye How to Start Shahpur Patell eProcurement Richard Roy Supplier Management Adrian Axtell Q&A Amsterdam 1999 Session Agenda

4. Supply Chain Integration and eBusiness Supply-Chain World Europe ‘99 Amsterdam, Netherlands September 22, 1999 Mary Murphy-Hoye Director, IT Strategy & Technology Intel Corporation • 1999 by Mary Murphy-Hoye

5. What Does Integration Entail? • Integration is: • information • coordination • systems • organizational linkage • incentive alignment Environment capabilities requirements “activity” Supplier Customer interaction interaction relationship relationship • Integration means: • systems thinking • shared vision • team learning Required Results

6. There are four key attributes to achieve supply chain success: synchronized supply chain networks, [CONNECTED] optimized customer response, [ALIGNED] real-time detection and correction, [RESPONSIVE] rapid adaptability. [FLEXIBLE] Successful Supply Chain Attributes Bottom Line: achieve visibility of the product life-cycle

7. Effects of Supply Chain Misalignment True end customer demand Product cannot meet initial projected demand, resulting in real shortages Channel partners over-order in an attempt to met demand and stock their shelves As supply catches up with demand, orders are canceled or returned Financial and production planning are not aligned with real demand; therefore production continues As demand declines, all parties attempt to drain inventory to prevent write-down 1 2 3 4 5 6 Anderson Consulting/Unlocking Hidden Value in the Personal Computer Supply Chain Channel Orders True End Customer Demand 1 Channel Fill and Phantom Demand Unit Per Period Over-Supply 5 Real Shortage 4 Returns/Cancellations Supply 6 Target Launch Actual Launch End of Life Time

8. A New Challenge & Opportunity eBusiness - The Internet as Enabler

9. Users (M) Internet Trends 136 140 1997 120 2002 100 82 Internet Usage is Growing... 80 60 43 39 37 40 22 17 20 5 5 4 0 Worldwide Market Size ($B) 35X Growth Worldwide! Asia Pacific Market Size ($B) U.S. W. Asia Japan R.O.W. Europe Pacific 450 14 Worldwide 400 12 Asia Pacific 350 10 300 8 250 200 6 eBusiness is Exploding! 150 4 100 2 50 0 0 1997 2002 Source: IDC “Global Market Forecast for Internet Usage and Commerce”

10. Our Vision: A World of 1 Billion Connected Computers Tremendous eBusiness Opportunity

11. Internet as a Business Enabler Internet/Web capabilities can enable the following: • Direct access to a potential world-wide on-line customer base • breaks down barriers of time and visibility • changes demand profile • changes approach to selling /order taking/ customer service • requires flexible, easy to use response to customer requirements • Direct access to a very broad/diverse supplier base • provides direct access to supplier products and services • eliminates transaction processing overhead • improves access to procurement/financial processes and status • reduces cycle time and cost

12. Supply Chain Implications What are the Business Drivers?

13. Internet-Enabled Business Opportunities On-line AML eCollaboration DISCOVER DEVELOP DEPLOY Technology Cost Quality Availability Early Engagement Preposition Generational Learning Standards/ Reuse Benchmarking Design for Market Supply Chain Health Yield Improvement Market Monitoring On-line Marketing Integrated Mfg Supplier Selection Qualification/ Certification Process Control Continuous Improvement eCommerce Selection/ Reuse Capacity Installation Supply Chain Mgmt Flexibility Integrated Planning Integrated Delivery eProcurement

14. eBusiness Strategies for the Supply Chain Strategy Business Functions Metrics eProcurement/eCommerce eCollaboration Integrated Planning/Manufacturing Integrated Delivery On-line Marketing Cross-enterprise system to system integration (Req to Check) Electronic Catalogs On-line buying and selling Cross-enterprise technology/design interaction (customer & supplier) Cross-enterprise planning/execution system to system integration Outsourced manufacturing visibility Cross-enterprise logistics management/ consignment visibility Product boundary extension New products/ services creation New markets/ channel creation Efficiency/Effectiveness Reduced cost/cycle time Contract compliance Customer reach Design cycle time Design synergy, reuse Revenue, TTM Lead time, margin Accuracy/Flexibility Inventory levels On-time delivery Logistics cycle time Reduced cost Lead time Market Segment Share Customer reach