Dell Case

Michael Dell started business as student using mail order approach for selling PCs Customers did not have to come at store Customers can customize computers according to their specifications

E-Supply Chain Management

Dell Case
This approach enabled Dell to under price products As a result they constantly captured market In 1993 Compaq the market leader cut prices Due to stock pile-ups and competition Dell had a loss of $ 65 and was on verge of bankruptcy

Dell Case IT Solution

Changes along supply chain Orders from customers and to suppliers moved to web Customer can configure, find cost deliverability Used to build most computers after getting order Low inventories, quick delivery, low obsolescence

Dell Case IT Solution

Shipments were by UPS all arranged electronically So besides price and quality dell started competing on speed

Dell Case How it works

Order is received Transferred electronically to production floor Intelligent system prepare list of parts Checks in stock if not available then electronically places order to suppliers Also passes info of defect rates
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E-Supply Chains
The success of organizations depends on their ability to manage the flow of materials, information, and money into, within, and out of the organization Supply chain involves activities that take place during the entire product life cycle including the movement of information, money and individuals involved in the movement of a product or a service
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E-Supply Chains (cont.)

Supply chain: The flow of materials, information, money, and services from raw material suppliers through factories and warehouses to the end customers E-supply chain: A supply chain that is managed electronically, usually with Web technologies

E-Supply Chains (cont.)

Supply chain parts
Upstream supply chain
activities of a manufacturing company with its suppliers

E-Supply Chains (cont.)

Internal supply chain

in-house processes for transforming the inputs from the suppliers into the outputs

Downstream supply chain

activities involved in delivering the products to the final customers
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Types of Supply Chain

Make to Stock
Analyze the past customers demand and restock the finish goods inventory efficiently

Types of Supply Chain

Build to Order
In build to order model the products are started assembling immediately on receipt of order

Continuous Replenishment
The idea of the continuous replenishment supply chain model to constantly replenish the inventory by working closely with suppliers and intermediaries. This model is most applicable to environments with stable demand patterns

Channel Assembly
In channel assembly the parts are gathered and assembled as the product moves through the channel
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E-Supply Chains (cont.)

Managing supply chains
E-supply chain management (e(e-SCM):
The collaborative use of technology to improve the operations of supply chain activities as well as the management of supply chains

E-Supply Chains (cont.)

The success of an e-supply chain depends on:
The ability of all supply chain partners to view partner collaboration as a strategic asset Information visibility along the entire supply chain Speed, cost, quality, and customer service Integrating the supply chain segments more tightly

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Traditional Vs Present SCM

Push Model (Traditional) Suppliers
Manufactures Distributors Retailers Customers

Traditional Vs Present SCM

Pull Model Consumers
Retailers Distributors Manufactures Suppliers
Consumer request Products 15 16

Impact of EC on SCM
Order taking Efficiency Cost/Time Customer Orientation Shipment Tracking Shipping Notice (packing lists) Automated documentation generation (BOL, AWB) Faster Order fulfillment Electronic payments Inventories can be minimized Collaborative commerce
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E-Supply Chains (cont.)

E-supply chain consists of six processes:
1. 2. 3. 4. 5. 6. Supply chain replenishment E-procurement Collaborative planning Collaborative design and product development E-logistics Use of B2B exchanges and supply webs

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E-Supply Chains
Major infrastructure elements and tools of e-supply chains are:
Extranets Intranets Corporate portals Workflow systems and tools Groupware and other collaborative tools EDI, webservices and Internet
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An Automotive Supply Chain

Supply Chain Problems

Typical problems along the supply chain
Slow and prone to errors because of the length of the chain involving many internal and external partners Large inventories without the ability to meet demand Insufficient logistics infrastructure Poor quality
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Wal-Mart and Procter & Gamble

Supply Chain Problems

Bullwhip effect: Erratic shifts in orders
up and down supply chains
Creates production and inventory problems Stockpiling can lead to large inventories

Before these two companies started collaborating back in the '80s, retailers shared very little information with manufacturers. But then the two giants built a software system that hooked P&G up to WalMart's distribution centers. When P&G's products run low at the distribution centers, the system sends an automatic alert to P&G to ship more products. In some cases, the system goes all the way to the individual Wal-Mart store. It lets P&G monitor the shelves through real-time satellite link-ups that send messages to the factory whenever a P&G item swoops. With this kind of minute-to-minute information, P&G knows when to make, ship and display more products at the Wal-Mart stores. No need to keep products piled up in warehouses awaiting Wal-Mart's call. Invoicing and payments happen automatically too. The system saves P&G so much in time, reduced inventory and lower orderprocessing costs that it can afford to give Wal-Mart "low, everyday prices" without putting itself out of business

Effect is handled by information sharingcollaborative commerce

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Enterprise Resource Planning

ERP as a Process: ERP is the process of managing all resources and their use in the entire enterprise in an coordinated manner It integrates

Enterprise Resource Planning

Inventory Accounts Sales Purchase

Marketing Finance HRM Operations etc. etc.

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ERP
ERP as a software: Software that integrates the planning, management and use of all resource in the entire enterprise. SAP R/3 the leading EPR software (form SAP AG Crop.): a highly integrated package containing more than 70 business activities modules.

ERP
The first generation of ERP concentrated on activities within the enterprise that were routine and repetitive in nature. The objective of second generation EPR is to leverage existing information systems in order to increase efficiency in handling, transaction, improve decision making, and transform ways of doing business into e-business.

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