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Case Study

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Bay Networks Inc.
Bay network Inc. Uses the internet to link with its suppliers. The
driving force behind Bay Network extranet, however, was the
company’s need to link its supply chain systems with its
distributers.

For years we have wanted daily point-of-sale information from


our distributers; says Maynard Webb, CIO of the Santa Clara,
California, manufacture of networking devices. With such data,
the company new its manufacturing unit could match
production levels better to demand. After meeting 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 Way Networks supply
chain systems.

In, effects, Bay Networks wanted to have a look into


its partners ordering systems and it’s devised an extranet to do
so. Partner Net, the company’s 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 them data
back, because some tracked their sales weekly, not yet daily.

Moving from weekly to daily sales reports required


distributors to do some order-system 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 each 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 SAP’s ERP system with an Oracle


database for its supply chain transactions. In order to capture
Way Networks ’ERP’s data, most production scheduling
information from Partner Net in to 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 supplier’s back-end
systems. To accomplish that, Way Networks is testing SAP’s
new release of the ERP system, R/3, release 3.1, which is
internet capable.

Not all of Way 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 Actra


Business 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 stocks 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.’

Qu-1 Discuss the advantages of the E-SCM solution


deployed by Bay Networks for its distributers?

Answer- Bay 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 Bey Networks for its distributers:

By the using of E-SCM, the Bey Networks has 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 Way 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 each have a unique account and password for
access to information.

Qu-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 share the account


number and password which is made for the security
purpose.
Due to this the information may be leak outside of the
organization and the competitor may take the advantage
of it.
In order to capture Bay Networks, ERP data most suppliers
has started to use their browsers to download production
scheduling information from Partner Net(work as conduit)
in to a spreads sheet program.

Solution to overcome the problems:

There are the


following ways to overcome the problems:

The security system should be tighter.


The account should be distributed only few big distributers
and suppliers.
A potential solution for the above problem has been find
out by Actra Business Systems in 1996, which has
launched a software, in to internet formats such as the
secure sockets layer encryption protocol, allowing EDI
users to do business on the Internet.