Case Study on Bay Networks Inc.

Bay network Inc. uses the internet to link with its suppliers. The driving force
behind Bay Network extranet, however, was the companys need to link its
supply chain systems with its distributers. For years we have wanted daily pointof-sale information from our distributers; says Maynard Webb, CIO of the Santa
Clara, California, manufacture of networking devices. With such data,
the company knew its manufacturing unit could match production levels better
to demand. After meetings with several distributers, Webb discovered that these
business partners had the technical resources to provide the data, but needed a
link between their sales tracking systems and Bay Networks supply chain
systems.
As a result, Bay Networks wanted to have a look into its partners ordering
systems and it devised an extranet to do so. Partner Net, the companys
extranet, is a conduit for Bay Networks to give distributers the timely sales data
they need. But Webb still had to cajole distributors in to giving data back to
them, because some tracked their sales weekly, not yet daily.
Moving from weekly to daily sales reports required distributors to do some ordersystem recording. They were a little hesitant to do the extra work, Webb says.
But by pointing out that Partner Net would give distributers critical information
such as Bay Networks production capacity and inventory data,
Webb persuaded them to accept the system and do the recording.
When taking customer orders, distributers now can check Bay Networks
inventory status to see how many routers are available for immediate shipping,
for example, and how many
will be available within a week. Enabling distributers to track shipment status
with Federal Express Corp. did not hurt either.
The real issue is that {distributers} have to believe that this will radically
change the business for the better, Webb says, for themselves as well as for
Bay Networks. On the other end of the supply chain, Bay Networks can see how
many orders have been placed so it can step up production during peak
sales periods. The result, Webb says, is that customers get their order faster.
Both distributers and Bay Networks benefit from that.
When you are going outsiders access to sensitive data such as production
schedules for the first time, security is the major concern, he says. To address
that issue, Bay Network distributors and suppliers both have a unique account
number and passwords that give them to access to the system, but only
to the information pertaining to their own business.
For example, a distributer can access to the status of its own backlog orders, but
not that of its competitors. Bay Networks uses SAPs ERP system with an Oracle
database for its supply chain transactions. In order to capture
Bay Networks ERPs data, most production scheduling information from Partner
Net in put into a spread sheet program.

They then import that data in to their own back office database systems. The
ideal method, says Webb, would be a direct transfer of data from Partner Net to a
suppliers back-end systems. To accomplish that, Bay Networks is testing SAPs
new release of the ERP system, R/3, release 3.1, which is internet capable. Not all
of Bay Networks business partners, however, are equipped with SAP. Those that
are do not require a mechanism for translating Bay Networks R/3 data protocol
to their own. A potential solution to that problem may come from ActraBusiness
Systems, a joint venture formed in 1996 between Netscape Communications and
GEIS. Actra sells software that converts conventional EDI software in to internet
formats such as the secure socket layer encryption protocol, allowing EDI
users to do business on the internet. It is still very early in the game, though, and
CIOs may have to find the right solution by trial and error, according to Webb.
You have to be willing to throw some stuff out, he says, because this
stuff is in its infancy and changing so fast.
Que-1 Discuss the advantages of the E-SCM solution deployed by Bay Networks
for its distributers?
AnswerBay network Inc. uses the internet to link with its suppliers. It is called the
Electronic-Supply Chain Management (E-SCM) technique. There is the following
advantage of the E-SCM solution deployed by Bay Networks for its distributers:
By the use of E-SCM, the Bay Networks is able to know daily point-of-sales
information from its distributers. The Bay Networks can match production level
better to the demand.
When taking customer orders, distributers can check Bay
Networks inventory status to see how many will be available within a week. It is
helpful for both Bay Networks and distributers if any radical change in the
business has taken place. Bay Networks can see how many orders have been
placed so it can step up production during peak sales period.
There is no security problem because distributers and suppliers both have a
unique account and password for accessing the information.
Que-2 What are the problems associated with the proper implementation of E
SCM. Find solution to overcome these problems?
Answer-Problems associated with E-SCM:
The electronic technique of supply chain used by Bay Network is very good
because it provides all the information related to production and demand at the
time. But some problems are associated with this, which are as following: The
distributers and suppliers may be sharing the account
number and password which is made for the security purpose. Due to this the
information may leak outside the organization and the competitor may take the
advantage of it. In order to capture Bay Networks ERP data, most suppliers have
started using their browsers to download production scheduling information from
Partner Net(work as conduit)into a spreadsheet program.

Solution to overcome the problems :

There are following ways to overcome the problems: The security system should
be tighter. The account should be distributed only to a few big distributers and
suppliers. A potential solution for the above problem has been found
out by Actra Business Systems in 1996, which has launched software, into
internet formats such as the secure sockets layer encryption protocol,
allowing EDI users to do business on the Internet.