Internet-based supply chain management: using the Internet to revolutionize your business

1. Internet-based supply chain management: using the Internet to revolutionize your business 指導教授:廖則竣教授 學 生:周百鳳,郭吉原 報告日期:95/05/20 Zillur RahmanDepartment of Management studies, Indian Institute of Technology Roorkee, Roorkee ( UA ) -247667, India International Journal of Information Management

2. Abstract • The Internet has emerged in the recent past as a dynamic medium for channeling transactions between customers and firms virtual marketplace. • The Internet is challenging the traditional supply chain structure that firms have employed to get goods and services to market. • It is force to re-evaluate their value proposition to customers and meet the challenges of more nimble rivals. • 這篇文章在討論 Internet 在管理面的各方面應用

3. Agenda • Introduction • Objectives of study • Methodology • Management implications • Appendix A • Appendix B

4. Introduction • Nowhere have these changes been more evident than in supply chain functions (procurement, inventory control, logistics) (Soloner & Spence, 2002). • With the advent of Internet and www; the goals would be superseded by a single superobjective: competing on the basis of how well managed your supply chain is (Lancioni，2000)

5. Introduction • 當企業在供應鏈聚焦在企業所擁有的核心能力,利用這個力量影響供應商, 快速回應客戶的需求。 • 成功的SCM是從管理個別的功能活動到整合所供應鏈的主要活動。 • 品質、價格只是企業提供給客戶一個重要因素,供應鏈能提供更大的差異化和更多的價值主張。

6. Introduction • Larsen & Toubro －將發電廠的氣體渦輪機的CAD/CAM設計外包 • Hero Motors －購買它的後工程模型和在台灣，日本和歐洲染色 • Reebok －整個產品線委外，自己僅做行銷 • Dummy foot －在韓國、西班牙或德國設計的鞋子，用的可能是德國或義大利來的鞋底型模型

7. Introduction • 競爭優勢的流程從企業在實現價值鏈的活動的能力,設計、製造、客戶服務等,比競爭者能提供更有價值的活動。 • 建立企業內部差異化活動,確保能提供客戶更大價值。

8. Agenda • Introduction • Objectives of study • Methodology • Management implications • Appendix A • Appendix B

9. Objectives of the study • In order to determine to what extent Indian companies are using the Internet in the operations and management of their supply chains • the author conducted a nation-wide survey of firms that appeared in the list of 1000 companies published by Business Standard, a leading business daily in India (Business Standard, 2002).

10. Objectives of the study • The objectives of the study were to determine • 1. whether firms use the Internet in their supply chains • 2. how and to what extent the Internet is used in customer service • 3. how and to what extent the Internet is used in purchasing

11. Objectives of the study • The objectives of the study were to determine • 4. how and to what extent the Internet is used in material handling systems • 5. how and to what extent the Internet is used in the transportation operations and management of transportation fleet • 6. how and to what extent the Internet is used in the backing of products

12. Agenda • Introduction • Objectives of study • Methodology • Management implications • Appendix A • Appendix B

13. Methodology • Sample • Findings • Supply chain management (SCM) • Purchasing and the Internet • Inventory management and the internet • Transportation and the Internet • Order processing and the internet • Customer service and the Internet • The Internet and vendor relationships • The Internet and production scheduling • Intranet usage • Extranet usage • Company size and the Internet

14. Sample • 1000 companies were sent an E-mail questionnaire. • The research questionnaire was 3 pages in length, covering all aspects of SCM (see Appendix A). • 140 completed questionnaires were returned via E-mail, a response rate of 14%

15. Sample • Although this is a relatively low response rate, the number of returns may be compensated by the extreme heterogeneity of the industries and companies represented by the respondents (see Appendix B) • Beside the seven substantive supply chain decision areas • All of the supply chain dimensions addressed in the questionnaire were analyzed using student T-test, multiple response, and cross-tab analyses.

16. Findings • A total of 80% of the respondents indicated using the Internet in some part of their SCM • In light of those firms who do use the Internet for SCM, the most popular application (Table 1) was for the management of their transportation systems. • Tables 2–8 provide results for how and to whatextent the Internet is used in each of the logistics functional areas (1—little usage; 5—high usage)

17. Supply chain management (SCM)

18. Supply chain management (SCM) • The ranking is explained by the level of operating activity in each area, i.e., shipment frequency, the number of orders received, and the level of expenditures made by firms to support each one. • The use of the Internet in customer service, inventory management, and production planningand scheduling will become more popular as the technology develops.

19. Purchasing and the Internet

20. Purchasing and the Internet • Vendor negotiation has also been streamlined through the use of the Internet • Face-to-face negotiations are not used frequently because the negotiations are conducted through the Internet • This includes the bargaining, renegotiation, price, and term agreements

21. Inventory management and the internet

22. Inventory management and the internet • One of the most costly aspects of supply chains is the management of inventory • The most popular use of the Internet in this area is the communication of stock-outs by customers to vendors, or the notification of stock-outs by companies to their customers

23. Inventory management and the internet • To more quickly institute EDI information programs with their customers • The information available to inventory managers is becoming more readily available because of the reporting systems that can be used through the Internet • with the ability to track out-of-stock inventory items in field depots • The overall benefit is to keep inventory levels low, reduce overall holding costs, and still provide high levels of customer service

24. Transportation and the Internet

25. Transportation and the Internet • Transportation typically is the second highest cost component in a supply chain • This enables transportation managers to make sure that the motor carriers they use are meeting their promised arrival times • It also provides managers with the information they need to inform carriers of shipment delays as they occur, and to not have to wait for days before the information becomes available for corrective measures to be taken

26. Order processing and the internet

27. Order processing and the internet • 因Internet的運用，使得SCM的費用僅為以前的18-20% • 減少傳統繁瑣的紙張文書作業而節省了成本 • 訂單處理減少多達一半的時間 • 各戶下單時產品的價格的正確性是很重要的，Internet提供客戶下單前及時查詢價格的功能

28. Customer service and the Internet

29. Customer service and the Internet • With the ability to offer their customers another way to contact the firm regarding services issues • The overall effect has led to reducedresponse times and resolutions of customer service problems • The Internet can build strong product and service loyalty if used appropriately in the customer service area

30. The Internet and vendor relationships

31. The Internet and vendor relationships • The Internet has proven itself to be an important communication link with vendors • the Internet enables vendors and their customers to handle these functions on a 7-day/24-hour basis.

32. The Internet and production scheduling

33. The Internet and production scheduling • To minimize the difficulty in their production scheduling by improving the communication between vendors, firms and customers • This communication is not only being done domestically, but internationally as well, with over 16.4% of the firms coordinating their production schedules with multiple overseas sites

34. Intranet usage • The research showed that 70.4% of the firms indicated the use of Intranet. • The principal use of an Intranet was for communication (59%).

35. Extranet usage • with 30.1% of those using the Internet for SCM indicating that they also use an Extranet

36. Extranet usage

37. Extranet usage

38. Company size and the Internet • Internet usage was also explored in the context of the size of the firm with sales volume

39. Company size and the Internet

40. Company size and the Internet

41. Agenda • Introduction • Objectives of study • Methodology • Management implications • Appendix A • Appendix B

42. Management implications • Internet的來臨已經使企業改變並且重新規定競爭的規則 • Internet將更持續影響未來供應商及合作夥伴在共同合作時的資源、生產及配送和全球服務

43. Management implications • Internet 將繼續為管理者提供來自大範圍營運的領域快速和準確的訊息，包括運輸，存貨清單，購買，顧客服務，生產調度，訂單處理，和供應商的運作去增進供應鏈的效益 • Internet 將使得後勤管理者能去監控整個供應鏈的運作並且在運作效率低時降低成本花費

44. Agenda • Introduction • Objectives of study • Methodology • Management implications • Appendix A • Appendix B

45. Appendix A – (1/8) • Supply chain management decision areas • Purchasing/procurement • Inventory management • Transportation • Order processing • Customer service • Production scheduling • Relations with vendors

46. Appendix A – (2/8) • Purchase/procurement decision areas • EDI programs with vendors • On-line purchasing from vendor catalogs • Communicating with vendors • Negotiation with vendors • Checking price quotations of vendors • Arranging for returned/damaged products to vendors • Dealing with warranty issues of vendors

47. Appendix A – (3/8) • Inventory management decision areas • EDI programs with vendors • Coordination of JIT delivery programs • Communication with customers on out-of-stocks, etc. • Notification of delays in order ship dates to customers • Communication with vendors on raw-material inventory levels • Communication with customers on emergency situations affecting inventory levels • Communication with vendors on finished-goods inventory levels • Communication with field warehouses and depots on field inventory levels • Communication with field depots on out-of-stock situations, emergencies, etc.

48. Appendix A – (4/8) • Transportation management decision areas • Scheduling pickups at regional distribution centers • Scheduling drop-offs at regional distribution centers • Monitoring on-time arrivals of carriers • Managing claims status and processing communication with carriers on overall performance

49. Appendix A – (5/8) • Order processing management decision areas • Communication with customers on orders status • Communication with vendors on order efforts • Communication with customers on out-of-stocks • Check credit status of customers • Check credit status of vendors • Communication with customers on returned merchandise • Providing total order-cycle performance for customers • Providing credit-processing status to customers • Obtaining price quotes from vendors • Providing price quotes to customers

50. Appendix A – (6/8) • Customer service management decision areas • Receipt of customer complaints • Providing technical service • Notifying customers of emergencies in the supply chain-strikes, fires, etc. • Use of Internet to sell to customers • Manage the outsourcing of customer service functions