Sharing information across the Supply Chain

Dr. Ron Lembke Sharing information across the Supply Chain

Supply Chain Technologies • ASN -- lets customer know exactly what has been sent • Drop Shipping -- Supplier sends directly to the store, not to store’s warehouse • Computer sent to house via UPS • 3PL: Third-party Logistics Provider • Trucking companies, manage inventories, anything you don’t want to do

Bullwhip Effect • Lack of information sharing can cascade through the supply chain. • Small changes at retail level lead to huge swings at manufacturing, like a bullwhip • Several retailers order all at once, distributor thinks sales have jumped, orders a much bigger order, etc. • Better: sales info shared along “Value Chain.” Graph: Disney & Towill, 2006, Supply Chain Mgt: An Intl J

Electronic Data Interchange • My computer talks to yours, tells you exactly what I want to order, when • You fill out a form, very compressed message sent, viewed as form • Software, hardware expensive to implement Sample Purchase Transaction ST88850*1 Transaction Set identifier BEG*00*NE*00498765**010698 Beginning of Segment PID*X*08*MC**Large Widget Description of Product P01**5*DZ*4.55*TD Baseline Item Data CTT*1 Transaction Totals SE*1*1 End of Segment

XML • eXtensibleMarkup Language • Standard for E-Business • XML provides self-describing information. • Easier to implement or modify than EDI. • Expected to eventually, replace EDI, but not nearly as fast as was expected. • Standardization through RosettaNet efforts

XBRL • Standardized set of tags for financial transaction • Identifies data as being Q3 EBITDA, 2011, for WidgetCo. • No rekeying, fewer errors, easier research • 2009 - SEC required for external reporting, 500 largest public cos. • XBRL.org

Video conferencing • Nothing can go wrong now

Summary • Bullwhip effect: small changes can have huge consequences • Sharing information can be very valuable • Technologies: • EDI, XML, XBRL • Importance of face to face

Sharing information across the Supply Chain