<unit> <title>Unit 6 Supply chain management</title> <newpage/> <intro> <title>Introduction</title> Robert Rodin, CEO o !

ar"hall indu"trie", one o the large"t global di"tributor" o electronic component", highlighted the importance o "upply chain management when he "aid# <di"playte$t %uote> &In the end business all comes down to supply chain vs. supply chain. ' </di"playte$t> <para>(y applying in ormation "y"tem", companie" can enhance or radically impro)e many a"pect" o the "upply chain* In the conte$t o <popup medium><hyperlin+>,igure -*-</hyperlin+> <popte$t>< igure le t><image ile>**."hared. -/-*gi </image ile><caption>,igure -*- 0he di"tinction between buy1"ide, "ell1"ide and in1"ide e1 commerce</caption></ igure></popte$t></popup>, which wa" u"ed to introduce the concept o e1bu"ine"", "upply chain management can be enhanced through buy1"ide e1commerce, internal communication", relation"hip" with partner" and "ell1"ide e1commerce*</para> !uch o the e$citement generated by the e1bu"ine"" concept concern" the bene it" that companie" can achie)e through increa"ing the e iciency o the whole "upply chain* Companie" that ha)e enthu"ia"tically embraced technology to manage the "upply chain, "uch a" 0e"co 2Ca"e "tudy 6*-3, are already "tarting to reap the"e bene it"* </intro> <newpage/> <ob4ecti)e"> <title>5earning ob4ecti)e"</title> 6 ter completing thi" unit you "hould be able to# Identi y the main element" o "upply chain management and their relation"hip to the )alue chain and )alue networ+", 6""e"" the potential o in ormation "y"tem" to "upport "upply chain management and the )alue chain* </ob4ecti)e"> <newpage/> <ob4ecti)e"> <title>!anagement i""ue"</title> 0he i""ue" or the manager#

 7hich technologie" "hould we deploy or "upply chain management and how "hould they be prioriti"ed8 7hich element" o the "upply chain "hould be managed within and beyond the organi"ation and how can technology be u"ed to acilitate thi"8 </ob4ecti)e"> <newpage/> <topicli"t> <title>5i"t o topic"</title> Topic 7hat i" "upply chain management8 7hat i" the )alue chain8 Option" or re"tructuring the "upply chain U"ing in ormation "y"tem" to re"tructure the "upply chain E$ample" o IS "upported "upply chain management !anaging the "upply chain </topicli"t> <newpage/> <e""ential> <title>E""ential +nowledge</title> (e ore underta+ing thi" unit, you "hould en"ure that you ha)e thoroughly under"tood the concept" behind# the di"tinction between e1bu"ine"" and e1commerce and buy1"ide and "ell1 "ide e1commerce 2Unit -3* </e""ential> <newpage/> <"el te"t> <title>6re you ready8</title> @ow complete the"e %ue"tion" to te"t your +nowledge# 9age numb er" :-6; :: :::; <= :<=; :<< :<<;6 :<6; >> :>>; ?=

<%ue"tion mch-> <te$t>(uy1"ide e1commerce i"#</te$t> <an"wer correct>6n organi"ation u"ing electronic media to purcha"e rom to it" "upplier"</an"wer> <an"wer>6n organi"ation u"ing electronic media to "ell direct to it" cu"tomer"</an"wer> <an"wer>0he u"e o electronic communication" or all bu"ine"" proce""e"</an"wer> <an"wer>6ny electronically mediated communication between an organi"ation and it" "ta+eholder"</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>Sell1"ide e1commerce i"#</te$t> <an"wer>6n organi"ation u"ing electronic media to purcha"e rom to it" "upplier"</an"wer> <an"wer correct>6n organi"ation u"ing electronic media to "ell direct to it" cu"tomer"</an"wer> <an"wer>0he u"e o electronic communication" or all bu"ine"" proce""e"</an"wer> <an"wer>6ny electronically mediated communication between an organi"ation and it" "ta+eholder"</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>E1bu"ine"" i"#</te$t> <an"wer>6n organi"ation u"ing electronic media to purcha"e rom to it" "upplier"</an"wer> <an"wer>6n organi"ation u"ing electronic media to "ell direct to it" cu"tomer"</an"wer> <an"wer correct>0he u"e o electronic communication" or all bu"ine"" proce""e"</an"wer> <an"wer>6ny electronically mediated communication between an organi"ation and it" "ta+eholder"</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>0he up"tream "upply chain i"#</te$t> <an"wer>E$clu"i)ely in"ide an organi"ation</an"wer> <an"wer correct>In)ol)ed with procurement o material rom "upplier"</an"wer>

<an"wer>0he di"tribution o product" or deli)ery o "er)ice" to cu"tomer"</an"wer> <an"wer>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>0he down"tream "upply chain i"#</te$t> <an"wer>E$clu"i)ely in"ide an organi"ation</an"wer> <an"wer>In)ol)ed with procurement o material rom "upplier"</an"wer> <an"wer correct>0he di"tribution o product" or deli)ery o "er)ice" to cu"tomer"</an"wer> <an"wer>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> </"el te"t> <newpage/> <topic> <title>7hat i" "upply chain management8</title> Supply chain management (SCM) in)ol)e" the coordination o all "upply acti)itie" o an organi"ation rom it" "upplier" and deli)ery o product" to it" cu"tomer"* ,igure 6*- introduce" the main player" in the "upply chain* In ,igure 6*-2a3 the main member" o the "upply chain are the organi"ation" that manu acture a product and/or deli)er a "er)ice* < igure le t> <image ile> 6/-*gi </image ile> <caption>,igure 6*- !ember" o the "upply chain, 2a3 "impli ied )iew, 2b3 including intermediarie"</caption> </ igure> ,or mo"t commercial and not1 or1pro it organi"ation" we can di"tingui"h between upstream supply chain acti)itie" which are e%ui)alent to buy1"ide e1commerce and downstream supply chain acti)itie" which e%uate to "ell1 "ide e1commerce* In thi" unit and the ne$t we ocu" mainly on impro)ing the e iciency o up"tream "upply chain acti)itie", while in Unit" A and B the empha"i" i" on the mar+eting a"pect" o impro)ing down"tream "upply chain acti)itie"* <para>Remember al"o rom <popup big><hyperlin+>,igure -*-</hyperlin+> <popte$t>< igure le t> <image ile>**."hared. -/-*gi </image ile> <caption>,igure -*- 0he di"tinction between buy1"ide, "ell1"ide and in1"ide e1 commerce</caption> </ igure> </popte$t></popup> that "upply chain management include" not only "upplier and buyer, but al"o the intermediarie"

"uch a" the "upplier'" "upplier" and the cu"tomer'" cu"tomer" 2,igure 6*-2b33* Indeed ,igure 6*-2b3 i" a "impli ication o "ome companie" which may ha)e ir"t1tier, "econd1tier or e)en third1tier "upplier" and ir"t1tier, "econd1 or more1 tier cu"tomer"* (ecau"e each company e ecti)ely ha" many indi)idual "upply chain" or di erent product", the u"e o the term &chain' i" limiting and supply chain network i" a more accurate re lection o the lin+" between an organi"ation and it" partner"* 0he e$i"tence o thi" networ+ increa"e" the need or electronic communication" technology to manage and optimi"e thi" networ+*</para> <newpage/> <para> 0echnology i" )ital to "upply chain management "ince managing relation"hip" with cu"tomer", "upplier" and intermediarie" i" ba"ed on the low o in ormation and the tran"action" between the"e partie"* 0he main "trategic thru"t o enhancing the "upply chain i" to pro)ide a "uperior )alue propo"ition to the cu"tomerC "ee more in ormation here on <popup "crolling><hyperlin+>E icient con"umer re"pon"e 2ECR3</hyperlin+> <popte$t> <"mallhead>E icient con"umer re"pon"e 2ECR3</"mallhead> 0he ECR concept wa" de)eloped or the ood retailing bu"ine"" in the US, but ha" "ince been applied to other product" and other countrie"* It wa" originally de)eloped by Da)id Een+in", then chairman o Shaw'" "upermar+et", to compete with other player" "uch a" 7al1!art* 0able 6*- "how" that "ome o the aim" and "trategic approache" generated by ECR can al"o apply to bu"ine"" cu"tomer"* Objective 0imely, accurate, paperle"" in ormation low Smooth, continual product low matched to con"umption Optimi"e producti)ity o retail "pace and in)entory Optimi"e or time and co"t in the ordering proce"" !a$imi"e e iciency o promotion" !a$imi"e e ecti)ene"" o new product de)elopment 2@9D3 Strategy Re)i"ion o organi"ation proce""e" "upported by in ormation "y"tem" See "trategie" below E icient "tore a""ortment" E icient replacement 9romotion" are integrated into entire "upply chain planning @9D proce"" impro)ed and better orward planning with other partner"

<caption>0able 6*- Ob4ecti)e" and "trategie" or ECR</caption> </popte$t></popup>* 6" e$plained in Unit ?, impro)ing cu"tomer )alue in)ol)e" impro)ing product %uality, cu"tomer "er)ice %uality and/or reducing

price and ul ilment time"* 6n alternati)e empha"i" i" on increa"ing e iciency in obtaining re"ource" rom a "upplier organi"ation or di"tributing product" to cu"tomer"* 0hi" empha"i" i" about reducing operational co"t" and "o increa"ing pro itability*</para> <newpage/> 6n organi"ation'" "upply chain can be )iewed rom a "y"tem" per"pecti)e a" the ac%ui"ition o re"ource" 2input"3 and their tran" ormation 2proce""3 into product" and "er)ice" 2output"3 that are then deli)ered to cu"tomer"* Such a per"pecti)e indicate" that, a" part o mo)ing to e1bu"ine"", organi"ation" can re)iew the tran" ormation proce"" and optimi"e it in order to deli)er product" to cu"tomer" with greater e iciency and lower co"t* @ote that the po"ition o the "y"tem" boundary or SC! e$tend" beyond the organi"ation ; it not only in)ol)e" impro)ing internal proce""e", but al"o proce""e" per ormed in con4unction with "upplier", di"tributor" and cu"tomer"* Fowe)er, thi" proce"" per"pecti)e mi""e" the "trategic importance o "upply chain management ; it al"o pro)ide" great opportunitie" to impro)e product per ormance and deli)er "uperior )alue to the cu"tomer* 6" a re"ult, "upply chain management can dramatically impact the pro itability o a company through reducing operating co"t" and increa"ing cu"tomer "ati" action and "o loyalty and re)enue* <newpage/> <para>Since <popup big><hyperlin+>,igure 6*-</hyperlin+> <popte$t>< igure le t><image ile> 6/-*gi </image ile><caption>,igure 6*- !ember" o the "upply chain, 2a3 "impli ied )iew, 2b3 including intermediarie"</caption></ igure></popte$t></popup> i" a gro""ly "impli ied )er"ion o mo"t "upply chain", a more repre"entati)e "upply chain i" illu"trated in ,igure 6*: which "how" the "upply chain or 0he (:( Company* Complete the introductory acti)ity 26cti)ity 6*-3 to con"ider the i""ue" in)ol)ed in modi ying the "upply chain in re"pon"e to e1bu"ine""* @ote that although thi" e$ample i" ba"ed on a bu"ine""1to1bu"ine"" "cenario, "upply chain management i" al"o )ital to the management o bu"ine""1to1con"umer and "er)ice companie"* 7ith "er)ice companie" "uch a" inancial "er)ice", the re"ource" managed tend not to be phy"ical but human, inancial and in ormation re"ource"* Fowe)er, the "ame principle" o u"ing e1commerce technology to enhance "upply chain acti)itie" can "till be applied*</para> < igure le t> <image ile> 6/:*gi </image ile> <caption>,igure 6*: 6 typical "upply chain 2an e$ample rom 0he (:( Company3</caption> </ igure> <newpage/> <"ubtopic> <title>6cti)ity 6*- 0he "upply chain or 0he (:( Company</title>

<"mallhead>9urpo"e</"mallhead> 0o e$amine the nature o a (:( "upply chain and it" potential or modi ication through re"tructuring and in ormation "y"tem" a" part o e1bu"ine"" de)elopment* <"mallhead>Gue"tion"</"mallhead> 0hin+ing bac+ to what you learnt in Unit : about di"intermediation and re1 intermediation, di"cu"" the opportunitie" or 0he (:( Company to re"tructure it" "upply chain a" part o the mo)e to e1bu"ine"" and the bene it" thi" may bring* <"el te"t> <%ue"tion match-> <te$t>Up"tream "upply chain# !atch the"e opportunitie" with di"intermediation and re1intermediation*</te$t> <an"wer>o er" the opportunity to buy direct rom the "upplier with reduced co"t" and "horter cycle time"</an"wer> <an"wer>o er" the chance to u"e bu"ine""1to1bu"ine"" e$change" to "ource product" at lower co"t"</an"wer> <match>Di"intermediation</match> <match>Re1intermediation</match> < eedbac+> Di"intermediation o er" the opportunity to buy direct rom the "upplier with reduced co"t" and "horter cycle time"* Re1intermediation o er" the chance to u"e bu"ine""1to1bu"ine"" e$change" to "ource product" at lower co"t" </ eedbac+> </%ue"tion> <%ue"tion match-> <te$t>Down"tream "upply chain# !atch the"e opportunitie" with di"intermediation and re1intermediation*</te$t> <an"wer>o er" the opportunity to sell direct to the cu"tomer with lower co"t o "ale" and impro)ed lead time or cu"tomer"*</an"wer> <an"wer>o er" the opportunity to compete in new mar+etplace" through (:( e$change"</an"wer> <match>Re1intermediation</match> <match>Di"intermediation</match>

< eedbac+> Di"intermediation o er" the opportunity to sell direct to the cu"tomer with lower co"t o "ale" and impro)ed lead time or cu"tomer"* Re1intermediation o er" the opportunity to compete in new mar+etplace" through (:( e$change" </ eedbac+> </%ue"tion> <%ue"tion t$t-> <te$t>Fow can in ormation "y"tem" be u"ed to accompli"h the change" you ha)e identi ied in the pre)iou" %ue"tion8</te$t> < eedbac+>7ithout any re"tructuring o the "upply chain, technologie" "uch a" e1mail, web1ba"ed ordering, EDI and order trac+ing can be u"ed to reduce co"t" and cycle time"* Di"intermediation and re1intermediation option" are al"o acilitated through e1mail, web"ite", EDI and e1commerce*</ eedbac+> </%ue"tion> </"el te"t> </"ubtopic> <newpage/> <"ubtopic> <title>7hat i" logi"tic"8</title> 5ogi"tic" i" a clo"ely related concept to "upply chain management* 6ccording to the In"titute o 5ogi"tic" and 0ran"portation 2<url>www*iolt*org*u+</url>3# <di"playte$t %uote> &Logistics is the time-related positioning of resource, or the strategic management of the total supply-chain. The supply-chain is a sequence of events intended to satisfy a customer. It can include procurement, manufacture, distribution, and waste disposal, together with associated transport, storage and information technology. ' </di"playte$t> <para>0hi" de inition o logi"tic" i" broad, re lecting it" pro)enance* !ore typically, logi"tic" i" u"ed to re er not to all "upply chain acti)itie", but "peci ically to the management o outbound logistics or inbound and outbound logistics 2<popup big><hyperlin+>,igure 6*-</hyperlin+> <popte$t>< igure le t><image ile> 6/-*gi </image ile><caption>,igure 6*!ember" o the "upply chain, 2a3 "impli ied )iew 2b3 including intermediarie"</caption></ igure></popte$t></popup>3* 5ogi"tic" i" e""ential to the e icient management o the "upply chain, or e$ample re"ource management and tran"port are integral part" o the "upply chain, not only between "upply chain proce""e", but within the"e proce""e"*</para>

<newpage/> <para> 0o under"tand why "upply chain management play" an important role in modern management thin+ing, read <popup "crolling><hyperlin+>De)elopment" in "upply chain management</hyperlin+> <popte$t> <"mallhead>De)elopment" in "upply chain management</"mallhead> In order to under"tand how e1commerce can be u"ed to enhance "upply chain and logi"tic" management it i" u"e ul to con"ider the hi"torical conte$t o management approache" to "upply chain management and how in ormation "y"tem" ha)e been u"ed to "upport them* 0he ollowing "tage" can be identi ied# 1 !"s#$"s %hysical distribution management (%&M) * 9hy"ical di"tribution management 29D!3 ocu"ed upon the phy"ical mo)ement o good" by treating "toc+ management, warehou"ing, order proce""ing and deli)ery a" related rather than "eparate acti)itie"* 6lthough in ormation "y"tem" were de)eloped to manage the"e proce""e", they were o ten paper1ba"ed and not integrated acro"" di erent unction"* Fowe)er, "ome leading companie" "tarted u"ing EDI at thi" time* 9D! wa" e""entially about the management o ini"hed good" but not about the management o material" and proce""e" that impacted upon the di"tribution proce""* 9D! wa" "uper"eded by logi"tic" management which )iewed manu acturing, "torage and tran"port rom raw material to inal con"umer a" integral part" o a total di"tribution proce""* 1 $"s#'"s (ogistics management (materials re)uirement planning (M*%) and just in time (+,T))* 0he 4u"t in time 2EI03 philo"ophy i" "till a relati)ely recent de)elopment o logi"tic" management, it" aim being to ma+e the proce"" o raw material" ac%ui"ition, production and di"tribution a" e icient and le$ible a" po""ible in term" o material "upply and cu"tomer "er)ice* !inimum order %uantitie" and "toc+ le)el" were "ought by the cu"tomer and there ore manu acturer" had to introduce le$ible manu acturing proce""e" and introduce "y"tem" that inter aced directly with the cu"tomer, who could call an order directly again"t a prearranged "chedule with a guarantee that it would be deli)ered on time* !aterial" re%uirement planning "y"tem" were important in maintaining re"ource" at an optimal le)el* 0he de"ign or manu acture techni%ue wa" u"ed to "impli y the number o component" re%uired or manu acture* Fowe)er, none o the abo)e method" loo+ed at the management o the total "upply chain* 6n a""ociated phenomenon i" lean production and lean supply where "upply chain e iciency i" aimed at eliminating wa"te and minimi"ing in)entory and wor+ in progre""* 1 '"s# "s Supply chain management and e--icient consumer response (.C*)/ E ecti)e management o the "upply chain in)ol)ed much clo"er integration

between the "upplier, cu"tomer and intermediarie" and in "ome in"tance" in)ol)ed one organi"ation in the channel ta+ing o)er unction" that were traditionally the domain o the intermediary* (ottlenec+" or under"upply/o)er"upply can ha)e "igni icant impact" on an organi"ation'" pro itability* 0he two primary goal" o "upply chain management are to ma$imi"e the e iciency and e ecti)ene"" o the total "upply chain or the bene it o all the player", not 4u"t one "ection o the channel, and to ma$imi"e the opportunity or cu"tomer purcha"e by en"uring ade%uate "toc+ le)el" at all "tage" o the proce""* 0he"e two goal" impact upon the "ourcing o raw material" and "toc+holding* 6 recent phenomenon ha" been the rapid growth in global "ourcing o "upplie" rom pre erred "upplier", particularly among"t multinational and/or global organi"ation"* 0he Internet will pro)ide increa"ed capability or "maller player" to "ource raw material" globally and there ore impro)e their competiti)ene""* Guelch and Hlein 2-BB63 argue that the Internet will re)olutioni"e the dynamic" o international commerce and, in particular, lead to the more rapid internationali"ation o "mall and medium1 "iIe enterpri"e"* 0he web will reduce the competiti)e ad)antage o economie" o "cale in many indu"trie", ma+ing it ea"ier or "maller companie" to compete on a worldwide ba"i"* @ew integrated in ormation "y"tem" "uch a" the S69 enterpri"e re"ource planning 2ER93 "y"tem ha)e helped manage the entire "upply chain* ER9 "y"tem" include module" which are deployed throughout the bu"ine"" and inter ace with "upplier"* 0echnology ha" enabled the introduction o a"ter, more re"pon"i)e and le$ible ordering, and manu acturing and di"tribution "y"tem" that ha)e dimini"hed e)en urther the need or warehou"e" to be located near to mar+et" that they "er)e* 1 "s#""s Technological inter-ace management (T,M)/ 6ccording to Famill and Jregory 2-BBK3, the challenge acing "upplier", intermediarie" and cu"tomer" in the "upply chain will "hi t rom a ocu" on phy"ically di"tributing good" to a proce"" o collection collation, interpretation and di""emination o )a"t amount" o in ormation* Enterpri"e re"ource planning "y"tem" are continuou"ly being updated to "upport ir"t direct data inter ace" with "upplier" and cu"tomer", or e$ample to "upport EDI* 6 more recent de)elopment i" inter acing o ER9 "y"tem" with (:( intermediary "ite" or e$change" "uch a" Commerce One 2<url>www*commerceone*com</url>3* See the & ocu" on (:( e$change"' in Unit A or urther di"cu""ion o the"e* S69 ha" al"o created the myS69 acility to help cu"tomer" manage and per"onali"e their interaction" with the"e e$change"* L!5 2Unit <3 i" increa"ingly u"ed a" the technical mean" by which technological inter ace management i" achie)ed* 20he critical re"ource po""e""ed by the"e new intermediarie" will be in ormation rather than in)entory* Fagel and Rayport 2-BBK3 ta+e thi" a "tage urther by "ugge"ting that cu"tomer in ormation capture will "er)e cu"tomer" rather than )endor" in uture* Currently cu"tomer" lea)e a trail o in ormation behind them a" they )i"it "ite" and ma+e tran"action"* 0hi" data can be captured and then u"ed by "upplier" and agent" to impro)e targeting o o er"* Fowe)er, a" cu"tomer" become more aware o the )alue o in ormation and a" technology on the Internet enable" them to protect pri)ate in ormation relating to "ite )i"it" and tran"action", the opportunity or intermediarie" to act a" cu"tomer agent" and not "upplier agent" grow"*3

</popte$t> </popup>*</para> </"ubtopic> <newpage/> <"ubtopic> <title>9u"h and pull "upply chain model"</title> 6 change in "upply chain thin+ing, and al"o in mar+eting communication" thin+ing, i" the mo)e rom pu"h model" o "elling to pull model" or combined pu"h;pull approache"* 0he pu"h model i" illu"trated by a manu acturer who perhap" de)elop" an inno)ati)e product and then identi ie" a "uitable target mar+et* 6 di"tribution channel i" then created to pu"h the product to the mar+et* 0hi" "ituation i" "hown in ,igure 6*<2a3 where it can be characteri"ed by the "tatement &This is a great product, now who shall we sell it to? ' or the %uip about the original !odel 0 ,ord ; &you can ha)e any colour, "o long a" it i" blac+'* 0he typical moti)ation or a pu"h approach i" to optimi"e the production proce"" or co"t and e iciency* < igure le t> <image ile> 6/<*gi </image ile> <caption>,igure 6*< 9u"h and pull approache" to "upply chain management</caption> </ igure> <newpage/> 0he alternati)e approach con"i"tent with ECR i" ocu"ed on the cu"tomer'" need" and it "tart" with analy"i" o their re%uirement" through mar+et re"earch and clo"e co1operation with cu"tomer" and "upplier" in new product de)elopment 2,igure 6*<2b3, pre)iou" page3* Fere the "upply chain i" con"tructed to deli)er )alue to the cu"tomer by reducing co"t" and increa"ing "er)ice %uality* ,igure 6*<2b3 "how" how there are much clo"er lin+" between the element" o the "upply chain through u"e o technology "uch a" EDI to minimi"e document tran" er and re+eying* 0hi" approach can be characteri"ed by the "tatement &What do our customers demand in the ideal product and service?' !odern car manu acturer" now not only pro)ide a choice o colour, but thou"and" o permutation" o trim and acce""orie" bac+ed up by "er)ice promi"e" "uch a" three1year warrantie"* 0he typical moti)ation or a pull approach i" to optimi"e the production proce"" or cu"tomer re"pon"e, co"t and e iciency* It will be apparent that "uch an approach i" al"o con"i"tent with management thin+ing about the "imilar concept o the )alue chain, a" illu"trated in the &,ocu" on the )alue chain' "ection* </"ubtopic> <newpage/> <"el te"t>

<title>E$erci"e 6*-</title> <%ue"tion t -> <te$t al"e>0he typical aim o the pu"h approach to "upply chain management i" to enhance product and "er)ice %uality*</te$t> < eedbac+ incorrect>@o, the pu"h approach i" typically to optimi"e production or co"t and e iciency</ eedbac+> < eedbac+ correct>Correct* Enhancing product and "er)ice %uality i" at the centre o the pull approach to "upply chain management</ eedbac+> </%ue"tion> <%ue"tion t -> <te$t true>0he typical characteri"tic" o the pull approach to "upply chain management are that it i" mar+et re"earch dri)enC technology i" u"ed to achie)e data integration, "horter cycle and re"pon"e time" and low in)entory le)el"*</te$t> < eedbac+ correct>Correct*</ eedbac+> < eedbac+ incorrect>7rong ; the de inition i" correct*</ eedbac+> </%ue"tion> </"el te"t> <newpage/> <"el te"t> <title>Re)iew %ue"tion</title> E$plain way" in which in ormation "y"tem" can "upport increa"ed e iciency o the up"tream and down"tream "upply chain* <popup medium> <hyperlin+>Sugge"ted an"wer</hyperlin+> <popte$t> In ormation "y"tem" "upport "haring o in ormation between member" o the up"tream and "upply "tream chain* 0he main implication" o thi" are# "horter cycle time" or product de)elopment and order ul ilmentC lower in)entory le)el" or manu actured product"C clo"er match between product characteri"tic" and cu"tomer re%uirement" through impro)ed mar+et re"earch* </popte$t>

</popup> </"el te"t> </topic> <newpage/> <topic> <title>7hat i" the )alue chain8</title> !ichael 9orter'" value chain i" a well1e"tabli"hed concept or con"idering +ey acti)itie" that an organi"ation can per orm or manage with the intention o adding )alue or the cu"tomer a" product" and "er)ice" mo)e rom conception to deli)ery to the cu"tomer 29orter, -BA=3* 0he )alue chain i" a model that de"cribe" di erent )alue1adding acti)itie" that connect a company'" "upply "ide with it" demand "ide* 7e can identi y an internal )alue chain within the boundarie" o an organi"ation and an e ternal )alue chain where acti)itie" are per ormed by partner"* (y analy"ing the di erent part" o the )alue chain, manager" can rede"ign internal and e$ternal proce""e" to impro)e their e iciency and e ecti)ene""* Malue can be added to the cu"tomer by reducing co"t and adding )alue to cu"tomer"# within each element o the )alue chain "uch a" procurement, manu acture, "ale" and di"tributionC at the interface between element" o the )alue chain "uch a" between "ale" and di"tribution* In e%uation orm# Malue N 2(ene it o each MC acti)ity ; it" co"t3 O 2(ene it o each inter ace between MC acti)itie" ; it" co"t3 <newpage/> Electronic communication" can be u"ed to enhance the )alue chain by ma+ing )alue chain acti)itie" "uch a" procurement 2"ee Unit A3 and al"o enabling data integration between acti)itie"* ,or e$ample, i a retailer "hare" in ormation electronically with a "upplier about demand or it" product", thi" can enhance the )alue chain o both partie" "ince the cycle time or ordering can be reduced, re"ulting in lower in)entory holding and hence co"t" or both* Ca"e Study 6*- illu"trate" thi" point* 0raditional )alue chain analy"i" 2,igure 6*>2a3 ; "ee E$erci"e 6*: below3 di"tingui"he" between primary activities that contribute directly to getting good" and "er)ice" to the cu"tomer 2"uch a" inbound logi"tic", including procurement, manu acturing, mar+eting and deli)ery to buyer", "upport and "er)icing a ter "ale3 and support activities which pro)ide the input" and in ra"tructure that allow the primary acti)itie" to ta+e place* Support acti)itie" include inance, human re"ource" and in ormation "y"tem"* It can be argued

that, with the ad)ent o e1bu"ine"", the "upport acti)itie" o er much more than "upportC indeed, ha)ing e ecti)e in ormation "y"tem" and management o human re"ource" i" critical to contribute to the primary acti)itie"* !ichael 9orter now ac+nowledge" that thi" i" the ca"e* <interaction la"h popup> <title>E$erci"e 6*:</title> <in"truction"> ,igure 6*> "how" two alternati)e model" o the )alue chain* 2a3 the traditional )alue chain modelC 2b3 a re)i"ed )alue chain model or electronic commerce* 0he part 2b3 o the diagram i" un ini"hed ; drag each o the element" o the re)i"ed )alue chain model to the appropriate location to create the correct "e%uence o element" in the chain* </in"truction"> < ile>e6/:*"w </ ile> < la"h/width>K==</ la"h/width> < la"h/height>>?=</ la"h/height> </interaction> <newpage/> Internet technologie" can reduce production time" and co"t" by increa"ing the low o in ormation a" a way to integrate di erent )alue1chain acti)itie"* 0hrough doing thi" the )alue chain can be made more e icient and "er)ice" deli)ered to cu"tomer" more readily* Rayport and S)io+la 2-BB63 contend that the Internet enable" )alue to be created by# gathering, organi"ing, "electing, "ynthe"i"ing, and di"tributing in ormation*

0hey re er to a "eparate parallel virtual value chain mirroring the phy"ical )alue chain* 0he )irtual )alue chain in)ol)e" electronic commerce u"ed to mediate traditional )alue chain acti)itie" "uch a" mar+et re"earch, procurement, logi"tic", manu acture, mar+eting and di"tributing* 0he proce""ing i" machine1ba"ed or )irtual rather than paper1ba"ed* 0he "ituation i" not truly )irtual in that human inter)ention i" "till re%uired in many )alue1 chain acti)itie", "uch a" procurement* 0he &)irtuality' o the )irtual )alue chain will increa"e a" "o tware agent" increa"ingly per orm the"e acti)itie"* <newpage/>

<"ubtopic> <title>Re"tructuring the internal )alue chain</title> 0raditional model" o the )alue chain 2"uch a" ,igure 6*>2a3, "een in E$erci"e 6*: and again on the ne$t page3 ha)e been re1e)aluated with the ad)ent o global electronic communication"* Hey wea+ne""e" in the traditional )alue chain model# It i" mo"t applicable to manu acturing o phy"ical product" a" oppo"ed to "er)ice"* It i" a one1way chain in)ol)ed with pu"hing product" to the cu"tomer 2"ee "ection &pu"h and pull "upply chain model"'C it doe" not highlight the importance o under"tanding cu"tomer need" through mar+et re"earch and re"pon"i)ene"" through inno)ation and new product de)elopment3* <para> 0he internal )alue chain re erred to by <popup big><hyperlin+>,igure :*A</hyperlin+> <popte$t> < igure> <image ile>**."hared. :/A*gi </image ile> <caption>,igure :*A 6lternati)e per"pecti)e" on bu"ine"" model"</caption> </ igure></popte$t> </popup> doe" not empha"i"e the importance o )alue networ+" 2although 9orter 2-BA=3 did produce a diagram that indicated networ+ relation"hip"3* </para>

<newpage/> <"mallhead>6 re)i"ed orm o the )alue chain</"mallhead> 0hi" ha" been "ugge"ted by Dei"e et al. 2:===3C an adaptation o thi" model i" pre"ented in ,igure 6*>2b3* < igure le t> <image ile> 6/>*gi </image ile> <caption>,igure 6*> 0wo alternati)e model" o the )alue chain* 2a3 0raditional )alue chain modelC 2b3 re)i"ed )alue chain model</caption> </ igure> 0hi" )alue chain "tart" with the mar+et re"earch proce"", empha"i"ing the importance o real1time en)ironment "canning made po""ible through electronic communication" lin+" with di"tributor" and cu"tomer"* ,or e$ample, leading e1tailer" now monitor, on an hourly ba"i", how cu"tomer" are re"ponding to promotional o er" on their web"ite, re)iew competitor"' o er" and then re)i"e them accordingly* Similarly, manu acturer" "uch a" Ci"co ha)e eedbac+ orm" and orum" on their "ite that enable them to collect in ormation rom cu"tomer" and channel partner" that can eed through to new product de)elopment* 6" new product de)elopment occur", the mar+eting "trategy will be re ined and at the "ame "tep" ta+en to obtain the re"ource" and production proce""e" nece""ary to create, "tore and di"tribute

the new product* 0hrough analy"i" o the )alue chain and loo+ing at how electronic communication" can be u"ed to "peed up the proce"", manu acturer" ha)e been able to "igni icantly reduce time to mar+et rom conception o a new product idea through to launch on the mar+et* ,or e$ample, car manu acturer" ha)e reduced time to mar+et rom o)er ? year" to -A month"* 6t the "ame time the u"e o technology increa"e" )alue chain e iciencyC or e$ample, it enable" cu"tomer" to "peci y their need" through a web"ite or a +io"+ in a car dealer"hip and then the car will be manu actured to order* <newpage/> In addition to change" in the e iciency o )alue chain acti)itie", electronic commerce al"o ha" implication" or whether the"e acti)itie" are achie)ed internally or e$ternally* 0he"e change" ha)e been re erred to a" )alue chain disaggregation 2Hala+ota and Robin"on, :===3 or deconstruction 20immer", -BBB3 and )alue chain reaggregation 2Hala+ota and Robin"on, :===3 or reconstruction 20immer", -BBB3* Malue chain di"aggregation can occur through decon"tructing the primary acti)itie" o the )alue chain* Each o the element" can be approached in a new way, or in"tance by wor+ing di erently with "upplier"* In )alue chain reaggregation the )alue chain i" "treamlined to increa"e e iciency between each o the )alue chain "tage"* Indeed 0immer" 2-BBB3 note" that the con)entional wi"dom o the )alue chain a" a "eparate or di"crete "tep may no longer be tenable a" "tep" "uch a" inbound logi"tic" and operation" become more tightly integrated through technology* 7e ha)e only touched upon change" to the "tructure o the )alue chain here, "ince there i" great "imilarity with the change" po""ible in the "tructure o the "upply chain* 0hi" i" e)aluated in more depth in the "ection" on )ertical integration and model" or rede ining the "upply chain* </"ubtopic> <newpage/> <"ubtopic> <title>0he )alue "tream</title> 0he value stream i" a clo"ely related concept to the )alue chain* 0he di erence i" that it con"ider" di erent type" o ta"+" that are in)ol)ed with adding )alue and loo+" at how the e iciency o the"e ta"+" can be impro)ed* 7omac+ and Eone" 2-BBA3 de ine the )alue "tream a"# <di"playte$t %uote> the set of all the specific actions required to bring a specific product through the three critical management tas!s of any business" -* the problem-solving tas! 2the proce""e" o new product de)elopment and production launch3 :* the information management tas! 2the proce""e" o order ta+ing,

"cheduling to deli)ery3 <* the physical transformation tas! 2the proce""e" o tran" orming raw material" to ini"hed product deli)ered to cu"tomer"3* </di"playte$t> It i" apparent that : and < are part o the )alue chain acti)ity, but -, new product de)elopment, mi""ing in ,igure 6*>2a3 but not 6*>2b3, i" added* <newpage/> Returning to the de inition o cu"tomer )alue rom Dei"e et al. 2:===3 "hown in the e%uation below, we can "ee that the lean thin+ing approach propo"ed by 7omac+ and Eone" i" aimed at adding )alue by cutting out wa"te in each o the"e three management ta"+"* (y reducing new product de)elopment and production time" and co"t", organi"ation" can then either increa"e cu"tomer )alue by decrea"ing ul ilment time or, i they wi"h, by decrea"ing price, and/or increa"ing product and "er)ice %uality* Clearly e1commerce play" a +ey role in decrea"ing time to mar+et and production time" and co"t"* < igure centre> <image ile> 6/-:*gi </image ile> </ igure> 7e will now loo+ at two alternati)e approache" to analy"ing )alue chain"* 6" you read through each one, thin+ about the "trength" and wea+ne""e" o each approach# -* Malue chain analy"i"* :* Malue "tream analy"i"* <newpage/> <"mallhead>Malue chain analy"i"</"mallhead> 0hi" i" an analytical ramewor+ or decompo"ing an organi"ation into it" indi)idual acti)itie" and determining )alue added at each "tage* In thi" way the organi"ation can then a""e"" how e ecti)ely re"ource" are being u"ed at the )ariou" point" within the )alue chain* 0he rele)ance or in ormation "y"tem" i" that or each element in the )alue chain it may be po""ible to u"e IS to increa"e the e iciency o re"ource u"age in that area* In addition, IS may be u"ed between )alue chain acti)itie" to increa"e organi"ational e iciency* Fow can an organi"ation "ee+ to impact po"iti)ely on it" )alue chain by in)e"ting in new or upgraded in ormation "y"tem"8 9orter and !illar 2-BA?3 propo"e the ollowing i)e1"tep proce""# #tep $. 6""e"" the in ormation inten"ity o the )alue chain 2i*e* the le)el and u"age o in ormation within each )alue chain acti)ity and between each le)el o acti)ity3* 0he higher the le)el o inten"ity and/or the higher the degree o

reliance on good %uality in ormation, the greater the potential impact o new in ormation "y"tem"* #tep %. Determine the role o IS in the indu"try "tructure 2 or e$ample, ban+ing will be )ery di erent rom mining3* It i" al"o important here to under"tand the in ormation lin+age" between buyer", "upplier" within the indu"try and how they and competitor" might be a ected by and react to new in ormation technology* #tep &. Identi y and ran+ the way" in which IS might create competiti)e ad)antage 2by impacting one o the )alue chain acti)itie" or impro)ing lin+age" between them3* Figh co"t or critical acti)ity area" pre"ent good target" or co"t reduction and per ormance impro)ement* #tep '. In)e"tigate how IS might "pawn new bu"ine""e" 2 or e$ample, the Sabre computeri"ed re"er)ation "y"tem "pawned a multi1billion dollar "o tware company which now ha" higher earning" than the original core airline bu"ine""3* #tep (* De)elop a plan or ta+ing ad)antage o IS* 6 plan mu"t be de)eloped which i" bu"ine""1dri)en rather than technology1dri)en* 0he plan "hould a""ign prioritie" to the IS in)e"tment" 2which o cour"e "hould be "ub4ected to an appropriate co"t;bene it analy"i"3* <newpage/> <"mallhead>Malue "tream analy"i" </"mallhead> In the i)e1"tep )alue chain analy"i" we ha)e mainly been loo+ing at how )alue chain analy"i" can be applied to the internal )alue chain* Such a proce"" can al"o be applied to an organi"ation'" e$ternal )alue chain* 7omac+ and Eone" 2-BBA3 re er to the related concept o value stream analysis* 0hi" con"ider" how the whole production and deli)ery proce"" can be made more e icient* 0o conduct thi" analy"i", they "ugge"t that companie" "hould map e)ery acti)ity that occur" in creating new product" and deli)ering product" or "er)ice" to cu"tomer" and then categori"e them a"# -* tho"e that create )alue a" percei)ed by the cu"tomerC :* tho"e that create no )alue, but are re%uired by product de)elopment or production "y"tem" "o can't immediately be eliminatedC <* tho"e that don't add )alue, "o can be immediately eliminated* Fa)ing per ormed thi" analy"i", plan" or remo)ing the category < acti)itie" can be made and manager" can then concentrate on eliminating category : acti)itie" and enhancing category - acti)itie"* 7omac+ and Eone" gi)e the e$ample o the )alue "tream or a cola can* E)en a "uper icially "imple product "uch a" canned cola can ha)e many acti)itie" in)ol)ed in it" production* Indeed there are "e)eral )alue "tream"# that in producing the can it"el , tho"e to produce the content", rom beet ield to "ugar and corn ield to caramel, and tho"e to produce the pac+aging* 0a+ing the e$ample o the can it"el , )alue "tream analy"i" can be per ormed to identi y the "tage" in production a" ollow"# -* !ine bau$ite* :* Reduction mill*

<* Smelter* >* Fot rolling mill* ?* Cold rolling mill* 6* Can ma+er* K* (ottler* A* Regional di"tribution centre 2RDC3* B* Retail unit "torage* -=* Fome "torage* <newpage/> In )alue "tream analy"i", e iciency or each o the "tage" abo)e will be calculated* ,or e$ample, at "tage K ; the bottler 2adding the drin+ to the can3 ; 7omac+ and Eone" 2:===3 gi)e the e$ample o incoming "torage > day", proce""ing time - minute, ini"hed "torage ? wee+"* 0he need or "uch analy"i" i" "hown by the delay" in the whole proce"" which gi)e incoming "torage o ? month", ini"hed "torage o 6 month", but proce""ing time o only < hour"* 0hi" gi)e" a total cycle time o nearly a year rom mine to home* Clearly i in ormation management can be u"ed to reduce the"e "torage time", it can create large "a)ing" in term" o reduced "torage capacitie"* 0he bene it" are e)ident or a retailer "uch a" 0e"co 2Ca"e Study 6*-3, which ha" already underta+en )alue "tream analy"i" and deployed e1commerce in the 0e"co In ormation E$change to reduce it" "torage in the RDC and in the "tore to only : and < day" re"pecti)ely* It ha" al"o been able to mo)e to a "y"tem o continuou" repleni"hment in :> hour"* Order" made by a 0e"co "tore on a !onday night are deli)ered rom "upplier" )ia the RDC" to arri)e be ore a "tore open" on 7edne"day morningP </"ubtopic> <newpage/> <"ubtopic> <title>Malue networ+"</title> Reduced time to mar+et and increa"ed cu"tomer re"pon"i)ene"" are not "imply the re"ult o re)iewing the e iciency o internal proce""e" and how in ormation "y"tem" are deployed, but al"o through con"ideration o how partner" can be in)ol)ed to out"ource "ome proce""e" that ha)e traditionally been con"idered to be part o the internal )alue chain o a company* 9orter'" original wor+ con"idered both the internal )alue chain and the e$ternal )alue chain or networ+* Since the -BA=" there ha" been a tremendou" increa"e in out"ourcing o both core )alue chain acti)itie" and "upport acti)itie"* 6" companie" out"ource more and more acti)itie", management o the lin+" between the company and it" partner" become" more important* Dei"e et al. 2:===3 de"cribe )alue networ+ management a"# <di"playte$t %uote> &the process of effectively deciding what to outsource in a constraint-based, real-time environment based on fluctuation). </di"playte$t>

Electronic communication" ha)e enabled thi" "hi t to out"ourcing, enabling the tran" er o in ormation nece""ary to create, manage and monitor partner"hip"* 0he"e lin+" are not nece""arily mediated directly through the company, but al"o through intermediarie", +nown a" )alue chain integrator", or directly between partner"* 6" a re"ult, the concept o managing a )alue networ+ o partner" ha" become commonplace* <newpage/> ,igure 6*? 2"ee ne$t page3, which i" adapted rom the model o Dei"e et al. 2:===3, "how" "ome o the partner" o a )alue networ+ that characteri"e" partner" a"# Supply1"ide partner" 2up"tream "upply chain3 "uch a" "upplier", bu"ine""1 to1bu"ine"" e$change", whole"aler" and di"tributor"* 9artner" who ul il primary or core )alue chain acti)itie"* 0he number o core )alue chain acti)itie" that will ha)e been out"ourced to third partie" will )ary with di erent companie" and the degree o )irtuali"ation o an organi"ation* In "ome companie" the management o inbound logi"tic" may be out"ourced, in other" di erent a"pect" o the manu acturing proce""* In the )irtual organi"ation all core acti)itie" may be out"ourced* Sell1"ide partner" 2down"tream "upply chain3 "uch a" bu"ine""1to1bu"ine"" e$change", whole"aler", di"tributor" and cu"tomer" 2not "hown, "ince concei)ed a" di"tinct rom other partner"3* Malue chain integrator" or partner" who "upply "er)ice" that mediate the internal and e$ternal )alue chain* 0he"e companie" typically pro)ide the electronic in ra"tructure or a company and include "trategic out"ourcing partner", "y"tem integrator", IS9/76@ pro)ider" and 6S9 pro)ider"* <newpage/> < igure le t> <image ile> 6/?*gi </image ile> <caption>,igure 6*? !ember" o the )alue networ+ o an organi"ation</caption> </ igure> <para>0he "imilarity between element" o the )alue networ+ o ,igure 6*? and the "upply chain o 0he (:( Company o <popup "crolling><hyperlin+>,igure 6*:</hyperlin+> <popte$t>< igure le t><image ile> 6/:*gi </image ile><caption>,igure 6*: 6 typical "upply chain 2an e$ample rom 0he (:( Company3</caption></ igure></popte$t></popup> will be apparent* (ut the )alue networ+ o er" a di erent per"pecti)e that i" intended to empha"i"e#</para> 0he electronic interconnection" between partner" and the organi"ation and directly between partner" that potentially enable real1time in ormation e$change between partner"* 0he dynamic nature o the networ+* 0he networ+ can be readily modi ied

according to mar+et condition" or in re"pon"e to cu"tomer demand"* @ew partner" can readily be introduced into the networ+ and other" remo)ed i they are not per orming* Di erent type" o lin+" can be ormed between di erent type" o partner"* ,or e$ample, EDI lin+" may be e"tabli"hed with +ey "upplier", while e1mail lin+" may "u ice or le"" "igni icant "upplier"* <para> 0he <popup "crolling><hyperlin+>7ater"tone'" boo+ chain</hyperlin+> <popte$t> <"mallhead>7ater"tone'"</"mallhead> 0he 7ater"tone'" boo+ chain 2<url>www*water"tone"*co*u+</url>3 pro)ide" an e$ample o the importance o de)eloping a )alue networ+ o in ra"tructure partner"* ,ield 2:===3 de"cribe" how initially the web"ite wa" de"igned and ho"ted by a "ingle company, Fyperlin+, and o ered boo+ "earching among -*:m boo+", "ecure ordering, diary, 7ater"tone'" club and online chat* (ut ,ield "tate" that, according to 6ndrew Fatton, pro4ect manager, the technology wa" holding the company bac+, particularly a" 6maIon continued to u"e it" huge mar+et capitali"ation to in)e"t in web inter ace and bac+1end ul ilment "y"tem"* U"ing an in1hou"e1de)eloped application and web "er)er, the "ite wa" unable to deli)er new unctionality %uic+ly or co"t1e ecti)ely "ince the "upplier had to per orm a time1con"uming "o tware upgrade to meet 7ater"tone'" re%ue"t or the "ite'" page" to change more rapidly* 7ater"tone'" decided to e$pand the networ+ o "upplier" to get be"t1o 1breed "upplier"* 9artner" included numerou" hardware and "o tware )endor", a" well a" integration and de"ign con"ultant"C the"e included Siemen", web"ite de"igner" (rain"tormer", and e1commerce integrator @)i"ion* @)i"ion achie)ed the +ey bac+1end integration to lin+ the new "olution to 7ater"tone'" e$i"ting bu"ine"" "y"tem" in -: wee+"* 0he integrator per ormed a S7O0 2"trength", wea+ne""e", opportunitie", threat"3 analy"i" to identi y the mar+et opportunitie" or an online boo+"tore, and the"e were then matched again"t 7ater"tone'" e$i"ting capabilitie", both on the web"ite and in the "upply chain* </popte$t></popup> pro)ide" an e$ample o the importance o de)eloping a )alue networ+ o in ra"tructure partner", which you can read more about by clic+ing on the lin+*</para> <newpage/> In thi" "ection, we re er to whole"ale out"ourcing o the element" o a )alue networ+ to third partie"* In act, the option" are more comple$ than thi"* 0he di erent type" o partner"hip that can be ormed are de"cribed in more detail in the later "ection on managing partner"hip"* Remember al"o that out"ourcing doe" "imply imply co"t reduction* !ichael Dell relate" that Dell do not "ee out"ourcing a" getting rid o a proce"" that doe" not add )alue, rather

they "ee it a" a way o &coordinating their activity to create the most value for customers' 2!agretta, -BBA3* Dell ha" impro)ed cu"tomer "er)ice by changing the way it wor+" with both it" "upplier" and di"tributor" to build a computer to the cu"tomer'" "peci ic order within 4u"t "i$ day"* </"ubtopic> <newpage/> <"ubtopic> <title>0oward" the )irtual organi"ation</title> 0he implication o increa"ing out"ourcing o core acti)itie" i" that companie" will mo)e toward" the )irtual organi"ation* (en4amin and 7igand 2-BB?3 "tate that &it is becoming increasingly difficult to delineate accurately the borders of today)s organisations'* 6 urther implication o the introduction o electronic networ+" "uch a" the Internet i" that it become" ea"ier to out"ource a"pect" o the production and di"tribution o good" to third partie" 2Hraut et al*, -BBA3* 0hi" can lead to the boundarie" between "upplier and organi"ation becoming blurred* Employee" may wor+ in any time Ione and cu"tomer" are able to purcha"e tailored product" rom any location* 0he ab"ence o any rigid boundary or hierarchy within the organi"ation "hould lead to a more re"pon"i)e and le$ible company with greater mar+et orientation* <newpage/> Da)idow and !alone 2-BB:3 de"cribe the )irtual corporation a" ollow"# <di"playte$t %uote> &To the outside observer, it will appear almost edgeless, with permeable and continuously changing interfaces between company, supplier and customer. *rom inside the firm, the view will be no less amorphous, with traditional offices, departments, and operating divisions constantly reforming according to need. +ob responsibilities will regularly shift, ' </di"playte$t> Hraut et al. 2-BBA3 "ugge"t that the eature" o a )irtual organi"ation are# 9roce""e" tran"cend the boundarie" o a "ingle orm and are not controlled by a "ingle organi"ational hierarchy* 9roduction proce""e" are le$ible, with di erent partie" in)ol)ed at di erent time"* 9artie" in)ol)ed in the production o a "ingle product are o ten geographically di"per"ed* Ji)en thi" di"per"ion, co1ordination i" hea)ily dependent o on telecommunication" and data networ+"* 6ll companie" tend to ha)e "ome element" o the )irtual organi"ation* 6" the"e characteri"tic" increa"e, thi" i" +nown a" )irtuali"ation* !alone et al. 2-BAK3 argued that the pre"ence o electronic networ+" tend" to lead to )irtuali"ation "ince the go)ernance and co1ordination o bu"ine"" tran"action"

can be conducted e ecti)ely at lower co"t"* </"ubtopic> <newpage/> <"el te"t> <title>Re)iew %ue"tion</title> <%ue"tion match-> <te$t>!atch the ollowing )alue1chain1related concept" to their de inition"*</te$t> <an"wer>&0he combination o action" re%uired to deli)er )alue to the cu"tomer a" product" and "er)ice"'</an"wer> <an"wer>&0he lin+" between an organi"ation and it" "trategic and non1 "trategic partner" that orm it" e$ternal )alue chain'</an"wer> <an"wer>&6 model or analy"i" o how "upply chain acti)itie" in"ide and out"ide an organi"ation can add )alue to product" and "er)ice" deli)ered to the cu"tomer'</an"wer> <an"wer>&6n organi"ation which u"e" in ormation and communication" technology to allow it to operate without clearly de ined phy"ical boundarie" between di erent unction"* It pro)ide" cu"tomi"ed "er)ice" by out"ourcing production and other unction" to third partie"'</an"wer> <match>Malue chain</match> <match>Mirtual organi"ation</match> <match>Malue networ+</match> <match>Malue "tream</match> < eedbac+>a3 Malue "tream b3 Malue networ+ c3 Malue chain d3 Mirtual organi"ation</ eedbac+> </%ue"tion> </"el te"t> </topic> <newpage/> <topic> <title>Option" or re"tructuring the "upply chain</title> 6" part o "trategy de inition or e1bu"ine"", manager" will con"ider how the "tructure o the "upply chain can be modi ied* 0he"e choice" are not primarily ba"ed on Internet technology choice", rather they are mainly choice" that ha)e e$i"ted or many year"* 7hat Internet technology pro)ide" i" an enabler or more e icient, lower1co"t communication" within the new "tructure"* Supply chain management option" can be )iewed a" a continuum between

internal control o the "upply chain element" and e$ternal control o "upply chain element" through out"ourcing* 0he two end element" o the continuum are u"ually re erred to a" vertical integration and virtual integration* 0he intermediate "ituation i" "ometime" re erred to a" )ertical di"integration or "upply chain di"aggregation* 0hi" continuum i" illu"trated in ,igure 6*6* < igure le t> <image ile> 6/6*gi </image ile> <caption>,igure 6*6 0he characteri"tic" o )ertical integration, )ertical di"integration and )irtual integration</caption> </ igure> <newpage/> 0here wa" a general trend during the "econd hal o the twentieth century rom )ertical integration through )ertical di"integration to )irtual integration* 6 good e$ample i" pro)ided by the car manu acturing indu"try where traditionally car plant" would be located near to "teel wor+" "o that the input to the car plant would be raw material", with ini"hed car" produced a" the output* Other component" o the car, "uch a" the engine and pa""enger e%uipment, would al"o be manu actured by the company* In addition, other )alue chain acti)itie" "uch a" mar+eting would al"o be largely per ormed in1 hou"e* 0here ha" been a gradual mo)e to "ourcing more and more component" "uch a" light", uphol"tery and trim and e)en engine" to third partie"* !ar+eting acti)itie" "uch a" web"ite de)elopment, brochure ul ilment and ad)erti"ing campaign" are now largely out"ourced to mar+eting agencie"* 6nother e$ample i" the purcha"e by pharmaceutical companie" o pharmacy bene it manager" 2companie" that manage drug di"tribution with pri)ate and company health "cheme"3* (y ac%uiring the"e companie", which are part o a pharmaceutical company'" down"tream "upply chain, the aim i" to &get clo"er to the cu"tomer' while at the "ame time a)ourably controlling the di"tribution o it" own drug"* <newpage/> Faye" and 7heelwright 2-BB>3 pro)ide a u"e ul ramewor+ that "ummari"e" choice" or an organi"ation'" )ertical integration "trategy* 0he three main deci"ion" are# The direction of any e pansion* Should the company aim to direct owner"hip at the up"tream or down"tream "upply chain8 0he pharmaceutical" companie" re erred to abo)e ha)e decided to buy into the down"tream part o the "upply networ+ 2down"tream )ertical integration3* 0hi" i" "ometime" re erred to a" an offensive "trategic mo)e "ince it enable" the company to increa"e it" power with re"pect to cu"tomer"* 6lternati)ely, i the pharmaceutical" company purcha"ed other re"earch lab", thi" would be up"tream1directed )ertical integration which i" "trategically defensive* The e tent of vertical integration* Fow ar "hould the company ta+e down"tream or up"tream )ertical integration8 Originally car manu acturer" had a high degree o )ertical integration, but more recently they ha)e mo)ed

rom a wide process span to a narrow process span* 0hi" change i" the main way in which e1bu"ine"" can impact )ertical integration by a""i"ting the change rom wide to narrow proce"" "pan* The balance among the vertically integrated stages * 0o what e$tent doe" each "tage o the "upply chain ocu" on "upporting the immediate "upply chain8 ,or e$ample, i a "upplier to a motor manu acturer al"o produced component" or other indu"trie", thi" would be an unbalanced "ituation* <para>Combining the"e concept", we can re er to 0he (:( Company 2<popup "crolling><hyperlin+>,igure 6*:</hyperlin+> <popte$t>< igure le t><image ile> 6/:*gi </image ile><caption>,igure 6*: 6 typical "upply chain 2an e$ample rom 0he (:( Company3</caption></ igure></popte$t></popup>3* I it owned the ma4ority o the up"tream and down"tream element" o the "upply chain and each element wa" ocu"ed on "upporting the acti)itie" o 0he (:( Company, it" "trategy would be to ollow up"tream and down"tream direction" o )ertical integration with a wide proce"" "pan and high degree o balance* 6lternati)ely, i the "trategy wa" changed to ocu" on core competencie", it could be "aid to ha)e a narrow proce"" "pan*</para> <newpage/> Fow, then, can electronic communication" "upport the"e "trategie"8 0hrough increa"ing the low o in ormation between member" o the "upply chain, a "trategy o narrower proce"" "pan can be "upported by e1commerce* Fowe)er, thi" relie" on all member" o the "upply chain being e1enabled* I only immediately up"tream "upplier" ha)e adopted e1commerce then the e iciency o the "upply chain a" a whole will not be greatly increa"ed* It may be di icult or a manu acturer to encourage companie" urther up the "upply chain to adopt e1commerce* So companie" underta+ing o en"i)e or de en"i)e "trategie" will be in a better po"ition to "tipulate adoption o e1commerce, and "o increa"e the o)erall e iciency o the "upply chain* 6" we "aw in Ca"e Study -*-, a company "uch a" Shell help" e1enable the "upply chain by "haring in ormation in it" own databa"e" with cu"tomer" to increa"e the e iciency o the "upply chain* <newpage/> Our inal e$ample i" the manu acture o per"onal computer", which al"o illu"trate" the concept o the two di erent "upply chain product" well* Complete 6cti)ity 6*: to re)iew the bene it" o each approach* <"ubtopic> <title>6cti)ity 6*: Supply chain model" in per"onal computer manu acture</title> -* Read the approache" o the two companie" below, and decide which wa" adopting# a )ertical integration "trategyC a )irtual integration "trategy*

6pproach -# I(! during the -BA=" and early -BB=" !anu acture o many component" by I(! plant" in di erent location", including I(! proce""or", I(! hard di"+", I(! ca"e", I(! monitor" and e)en I(! mice* Di"tribution to companie" by I(! logi"tic"* 6pproach :# Dell during the -BB=" and :=== !anu acture o all component" by third partie" in di erent location", including Intel proce""or", Seagate hard di"+", Sony monitor" and !icro"o t mice* 6""embly o "ome component" in inal product by third partie", e*g* adding appropriate monitor to "y"tem unit or each order* ,or more in ormation on Dell "ee !agretta 2-BBA3* <popup "mall> <hyperlin+>Sugge"ted an"wer </hyperlin+> <popte$t> 6pproach -, ta+en by I(! in the A=", wa" a )ertical integration "trategy* 6pproach :, ta+en by Dell in the B=", wa" a )irtual integration "trategy* </popte$t></popup> :* 9roduce a table "ummari"ing the bene it" and di"bene it" o each approach* 7hich do you thin+ i" the be"t approach8 <popup big> <hyperlin+>Sugge"ted an"wer </hyperlin+> <popte$t> 0pproach 1/ ,1M/ 2ertical integration 6d)antage" Control o manu acturing %uality 5ower o)erhead in dealing with third partie" 2ea"ier to integrate "y"tem" internally3 0pproach 3/ &ell/ 2irtual integration 6d)antage" E$cellent control o co"t" through "upplier competition ,ewer a""et"* Co"t" o in)entory borne by "upplier"* Co"t" o data integration "hared with partner" !ore re"pon"i)e to "hort1 and medium1term

Di"ad)antage" 5e"" pre""ure on manu acturing co"t" Co"t" o "y"tem" all borne by manu acture

Di"ad)antage" 5e"" direct control on %uality 2although can "wap to other "upplier"3 Empha"i" on management o "upplier"

!ore re"pon"i)e to "hort1 and medium1term

mar+et demand )ariation"

mar+et demand )ariation"

<caption>0able 6*: 6d)antage" and di"ad)antage" o )ertical integration and )irtual integration</caption> </popte$t> </popup> <* Fow can in ormation "y"tem" to acilitate each approach8 <popup "mall> <hyperlin+>Sugge"ted an"wer</hyperlin+> <popte$t> In ormation "y"tem" can help both "ituation" through u"ing enterpri"e re"ource planning "y"tem", EDI and groupware "y"tem" to integrate mar+et re"earch, product de"ign, "ourcing, material re%uirement" planning, production, warehou"ing and di"tribution* 6" i" pointed out in the table, it may be ea"ier to integrate "y"tem" with )ertical integration, but more o the co"t i" borne by the manu acturer* </popte$t> </popup> </"ubtopic> <newpage/> <"el te"t> <title>Re)iew %ue"tion</title> <%ue"tion match-> <te$t>Di"tingui"h between )irtual and )ertical integration by matching each to their de inition*</te$t> <an"wer>0he ma4ority o "upply chain acti)itie" are underta+en and controlled outside the organi"ation by third partie"</an"wer> <an"wer>0he e$tent to which "upply chain acti)itie" are underta+en and controlled within the organi"ation</an"wer> <match>Mertical integration</match> <match>Mirtual integration</match> < eedbac+> Mirtual integration# 0he ma4ority o "upply chain acti)itie" are underta+en and

controlled outside the organi"ation by third partie" Mertical integration# 0he e$tent to which "upply chain acti)itie" are underta+en and controlled within the organi"ation </ eedbac+> </%ue"tion> </"el te"t> </topic> <newpage/> <topic> <title>U"ing in ormation "y"tem" to re"tructure the "upply chain</title> In thi" "ection we "tart by re)iewing the e$tent o adoption o di erent type" o in ormation "y"tem" to "upport "upply chain management a" part o e1 bu"ine"" "trategy* 0he bene it" o implementing the"e technologie" are al"o de"cribed* 7e then con"ider, through re erring to ca"e "tudie", how companie" can u"e technologie" to "upport the management o the up"tream and down"tream "upply chain* 6 report rom the UH trade and indu"try department 2D0I, :===3 pro)ide" u"e ul e)idence o the e$tent to which technologie" are being adopted by irm" to enable "upply chain management* ,igure" 6*K to 6*B "how the range o technologie" that di erent type" o companie" in di erent organi"ation" u"e to allow cu"tomer" to order* 6naly"e the"e %ue"tion" to e)aluate u"e o in ormation "y"tem" by di erent organi"ation"* <"el te"t> <title>E$erci"e 6*<</title> <%ue"tion mch-> <te$t> Re erring to ,igure 6*K, an"wer the %ue"tion below# < igure le t> <image ile> 6/K*gi </image ile> <caption>,igure 6*K 0echnologie" u"ed by cu"tomer" to order online* <"ource>Source# D0I 2:===3</"ource></caption> </ igure> 0he u"e o "tructured techni%ue" o data e$change or SC! e$ceed" un"tructured data e$change# </te$t> <an"wer>0rue</an"wer> <an"wer correct>,al"e</an"wer>

< eedbac+ incorrect>7rong* Un"tructured e$change o data through e1mail "eem" to dominate in all countrie", with ,rance apparently more ad)anced in "tructured data e$change* 7eb1ba"ed ordering doe", howe)er, repre"ent a change to more u"e o "tructured method"*</ eedbac+> < eedbac+ correct>Correct* Un"tructured e$change o data through e1mail "eem" to dominate in all countrie", with ,rance apparently more ad)anced in "tructured data e$change* 7eb1ba"ed ordering doe", howe)er, repre"ent a change to more u"e o "tructured method"*</ eedbac+> </%ue"tion> <%ue"tion mch-> <te$t> Re erring to ,igure 6*A, an"wer the %ue"tion below# < igure le t> <image ile> 6/A*gi </image ile> <caption>,igure 6*A (u"ine""e" that ma+e payment" online to cu"tomer" by bu"ine"" "iIe* <"ource>Source# D0I 2:===3</"ource></caption> </ igure> 5arger companie" tend to be more proacti)e in adopting technology or online payment# </te$t> <an"wer correct>0rue</an"wer> <an"wer>,al"e</an"wer> < eedbac+ correct>Correct* 0hi" i" a clear pattern in mo"t countrie" and perhap" re lect" the co"t o in)e"ting in the"e technologie" and the e$i"tence o a coherent "trategy* E$ception" to the rule are Jermany and Sweden*</ eedbac+> < eedbac+ incorrect>7rong* 0hi" i" a clear pattern in mo"t countrie" and perhap" re lect" the co"t o in)e"ting in the"e technologie" and the e$i"tence o a coherent "trategy* E$ception" to the rule are Jermany and Sweden*</ eedbac+> </%ue"tion> <%ue"tion mch-> <te$t> Re erring to ,igure 6*B, an"wer the %ue"tion below# < igure le t> <image ile> 6/B*gi </image ile>

<caption>,igure 6*B U"e o e1commerce at di erent "tage" o the buying proce""* <"ource>Source# D0I 2:===3</"ource></caption> </ igure> 0here i" no clear pattern between countrie" o the proportion o bu"ine""e" that accept online in)oice" 2a3 and that ma+e payment" online 2b3# </te$t> <an"wer correct>0rue </an"wer> <an"wer>,al"e </an"wer> < eedbac+ correct>Correct* 0hi" data illu"trate" the immaturity o "tructured data e$change or (:( tran"action"*</ eedbac+> < eedbac+ incorrect>7rong* 0hi" data illu"trate" the immaturity o "tructured data e$change or (:( tran"action"*</ eedbac+> </%ue"tion> <%ue"tion match-> <te$t> Speci ic bene it" o applying in ormation "y"tem" to "upply chain management in ormation "y"tem", and in particular electronic communication", can be u"ed to impact "upply chain management in a number o way"* !atch the ollowing bene it" to how they are achie)ed* <para> I you get "ome o the an"wer" wrong, ha)e a loo+ at thi" <popup "crolling><hyperlin+> urther e$planation relati)e to 0he (:( Company</hyperlin+> <popte$t> In ormation "y"tem", and in particular electronic communication" can be u"ed to impact "upply chain management in a number o way"* 7ith re"pect to 0he (:( CompanyC change" in in ormation "y"tem" could include# -* ,ncreased e--iciency o- individual processes * Fere the cycle time to complete a proce"" and the re"ource" needed to e$ecute it are reduced* I 0he (:( Company adopt" e1procurement thi" will re"ult in a lower a"ter cycle time and co"t per order* (ene it# reduced cycle time and co"t per order a" de"cribed in Unit K* :* *educed comple4ity o- the supply chain* 0hi" i" the proce"" o di"intermediation re erred to in Unit :* Fere 0he (:( Company will o er the acility to "ell direct rom it" e1commerce "ite rather than through di"tributor" or retailer"*

(ene it# reduced co"t o channel di"tribution and "ale* <* ,mproved data integration between elements o- the supply chain * 0he (:( Company can "hare in ormation with it" "upplier" on the demand or it" product" to optimi"e the "upply proce""* (ene it# reduced co"t o paper proce""ing* >* *educed cost through outsourcing * 0he company can out"ource or u"e )irtual integration to tran" er a""et" and co"t" "uch a" in)entory holding co"t" to third1party companie"* 0echnology i" al"o an enabler in orming )alue networ+", and in ma+ing it a"ter to change "upplier" on the ba"i" o co"t and %uality* (ene it"# lower co"t" through price competition and reduced "pend on manu acturing capacity and holding capacity* (etter "er)ice %uality through contractual arrangement"8 ?* ,nnovation* It may be po""ible to o er new product" or new way" o ordering and "er)icing product" to cu"tomer"* ,or e$ample, 0he (:( Company may u"e e1commerce to enable it" cu"tomer" to "peci y the mi$ture o chemical compound" and additi)e" u"ed to ormulate their pla"tic" and re er to a hi"tory o pre)iou" ormulation"* (ene it# (etter cu"tomer re"pon"i)ene""* 6n alternati)e per"pecti)e i" to loo+ at the bene it" that technology can deli)er to cu"tomer" at the end o the "upply chain* ,or 0he (:( Company the"e could include# Increa"ed con)enience through :> hour" a day, K day" a wee+, <6? day" ordering* Increa"ed choice o "upplier leading to lower co"t"* ,a"ter lead time" and lower co"t" through reduced in)entory holding* 0he acility to tailor product" more readily* Increa"ed in ormation about product" and tran"action" "uch a" technical data "heet" and order hi"torie"* </popte$t></popup>*</para> </te$t> <an"wer>(etter cu"tomer re"pon"i)ene""*</an"wer> <an"wer>Reduced co"t o channel di"tribution and "ale through di"intermediation*</an"wer> <an"wer>Reduced co"t o paper proce""ing*</an"wer> <an"wer>5ower co"t" through price competition and reduced "pend on manu acturing and holding capacity*</an"wer> <an"wer>Reduced cycle time and co"t per order*</an"wer>

<match>Increa"ed e iciency o indi)idual proce""e"*</match> <match>Reduced comple$ity o the "upply chain*</match> <match>Impro)ed data integration between element" o the "upply chain*</match> <match>Reduced co"t through out"ourcing*</match> <match>Inno)ation*</match> < eedbac+> 1ene-it Reduced cycle time and co"t per order Reduced co"t o channel di"tribution and "ale through di"intermediation Reduced co"t o paper proce""ing 5ow it is achieved Increa"ed e iciency o indi)idual proce""e" Reduced comple$ity o the "upply chain Impro)ed data integration between element" o the "upply chain 5ower co"t" through price competition Reduced co"t through out"ourcing and reduced "pend on manu acturing and holding capacity (etter cu"tomer re"pon"i)ene"" Inno)ation </ eedbac+> </%ue"tion> </"el te"t> <newpage/> <"ubtopic> <title>Implication" o electronically mediated "upply chain</title> 0here are two alternati)e, but contradictory implication" o increa"ed adoption o electronically mediated networ+"* !alone et al* 2-BAK3 and Stein ield et al. 2-BB63 "ugge"t that networ+" may o"ter electronic mar+etplace" that are characteri"ed by more ephemeral relation"hip"* In other word", "ince it i" ea"ier to orm an electronically mediated relation"hip, it i" al"o ea"ier or the cu"tomer to brea+ it and choo"e another "upplier* Counter to thi" i" the "ugge"tion that electronic networ+" may loc!-in cu"tomer" to a particular "upplier becau"e o the o)erhead or ri"+ in changing to another "upplier* Fere networ+" are u"ed to "trengthen partner"hip"* 6n e$ample o thi" i" when the u"e o an EDI "olution i" "tipulated by a dominant cu"tomer* 0he popular conception o the introduction o the Internet into a channel i" that it will tend to lead to more ephemeral relation"hip"* 0hi" may yet pro)e to be the ca"e a" more intermediarie" e)ol)e and thi" become" an accepted way o buying* Fowe)er, a re)iew by Stein ield et al. 2-BB63 "eem" to "ugge"t that EDI and the Internet tend to cement e$i"ting relation"hip"* ,urthermore, re"earch indicate" that the u"e o networ+" or buying may actually reduce outcome" "uch a" %uality, e iciency and "ati" action with "upplier"* I the inding" o Stein ield et al. 2-BB63 are con irmed in practice, then thi" call" into

doubt the uture o many (:( mar+etplace"* 9er"onal relation"hip" between the member" o the buying unit and the "upplier "till "eem to be important* It will be intere"ting to "ee which type o arrangement predominate" in the uture, or it may well be that there i" a role or both according to the nature o the product purcha"ed* </"ubtopic> <newpage/> <"ubtopic> <title>Mideo 6cti)ity 6*- EDI in "upply chain management</title> <"mallhead>Conte$t</"mallhead> This clip reviews changes in use of EDI in supermarket supply chain management. Even one of Britain's oldest supermarkets is putting an 'e' into its supply chain, according to Jerry Bridson. olly !aymond asks the "uestions* <"mallhead>Miew )ideo</"mallhead> The !etail Interview# Jerry Bridson, supply chain programme manager, $ains%ury's. QRunning 0ime# <*<AR* Copyright# <hyperlin+>"ilicon*com <image ile>"ilicon/logo*gi </image ile><url>http#//www*"ilicon*com</url></hyp erlin+>* ,ormat# Real9layer* <)ideo real popup><hyperlin+>lowband</hyperlin+>< ile> http#//media*pear"oncmg*com/intl/ema/ema/u+/he/ebu"ine""/-p/)ideo/unit= 6/)6reallow*rm</ ile></)ideo> <"mallhead>Gue"tion" or di"cu""ion</"mallhead> !a+e note" under the ollowing heading" and then di"cu"" your an"wer"# 7hat i" the purpo"e o changing rom EDI to web ba"ed EDI procurement8 7hat doe" thi" mean or "upplier"8 Fow doe" Sain"bury" encourage ta+e1up o Internet EDI8 7hat i" the re"i"tance to change8

</"ubtopic> <newpage/> <"el te"t> <title>Re)iew %ue"tion"</title> <%ue"tion mch-> <te$t>IS can be u"ed to reduce co"t" o SC! by#</te$t>

<an"wer correct>Reducing in)entory holding time"</an"wer> <an"wer>Increa"ing product cycle time"</an"wer> <an"wer>6utomating in ormation collection about product "ati" action</an"wer> <an"wer>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>IS can be u"ed to impro)e product %uality by#</te$t> <an"wer>Reducing in)entory holding time"</an"wer> <an"wer>Increa"ing product cycle time"</an"wer> <an"wer correct>6utomating in ormation collection about product "ati" action</an"wer> <an"wer>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> </"el te"t> </topic> <newpage/> <topic> <title>E$ample" o IS1"upported "upply chain management</title> <"ubtopic> <title>Up"tream "upply chain management e$ample"</title> 0he +ey acti)itie" o up"tream "upply chain management are procurement and up"tream logi"tic"* In thi" unit we will loo+ at "ome e$ample" o how technologie" are u"ed to impro)e up"tream "upply chain management* !ore detail" on procurement ollow in Unit A* Clic+ on the lin+" below to read each e$ample* <popup "crolling><hyperlin+>Jrocery retail</hyperlin+> <popte$t> <"mallhead>Jrocery retail</"mallhead> !any grocery retailer" ha)e been at the ore ront o u"ing technology to manage their up"tream "upply chain* 0he ma4or e$ample we will re)iew here i" the "y"tem created by 0e"co, but other UH retailer" ha)e de)eloped "y"tem" "uch a" &Sain"bury In ormation Direct' and &Sa eway Supplier In ormation Ser)ice'* Ca"e Study 6*- illu"trate" the u"e o technology to manage the up"tream "upply chain rom the retailer'" per"pecti)e, but al"o highlight" the bene it" or their "upplier"* 0he 0e"co In ormation E$change 20IE3 wa" de)eloped in con4unction with JE In ormation Ser)ice" 2JE3, and i" an e$tranet "olution that allow" 0e"co and it" "upplier" to e$change trading in ormation collaborati)ely* ,igure 6*-= "how" how 0IE i" lin+ed to 0e"co'"

+ey "y"tem" to gi)e "upplier" acce"" to rele)ant and up1to1date in ormation "uch a" electronic point o "ale 2E9OS3 data, to trac+ "ale", and the internal telephone/mail directory, "o that "upplier" can %uic+ly ind the right per"on to tal+ to* < igure le t> <image ile> 6/-=*gi </image ile> <caption>,igure 6*-= In ra"tructure or 0e"co In ormation E$change 20IE3</caption> </ igure> 0he 0e"co ca"e "tudy illu"trate" the bene it" and di icultie" o implementing EDI or "upply chain optimi"ation rom a retailer per"pecti)e* 7e will now con"ider it rom the per"pecti)e o the manu acturer* ,i"her 2-BBK3 ma+e" the di"tinction between two "trategie" that manu acturer" can ollow according to the type o product and the nature o it" demand* ,or unctional product", particularly tho"e with ea"ily predictable demand, or e$ample con"umer good" "uch a" toothpa"te or "hampoo, the product doe" not need to be modi ied re%uently in re"pon"e to con"umer demand* Fere the implication i" that the "upply chain "hould be directed at co"t reduction and e iciency* ,or more comple$ product", including tho"e with le"" predictable demand, ,i"her 2-BBK3 gi)e" the e$ample o two contra"ting product", S+iwear rom Sport Obermayer and "oup rom Campbell'"* Each year, B?S o Sport Obermayer'" product" are new de"ign" and demand oreca"t" may err by o)er :==S* In contra"t, B?S o Campbell'" product" are "imilar each year, with predictable demand le)el"* 0he "trategic re"pon"e or the"e product" i" to de)elop a phy"ically e icient "upply chain in the ormer ca"e and a mar+et1re"pon"i)e "upply chain in the latter ca"e* </popte$t></popup> <popup big><hyperlin+>!anu acturer</hyperlin+> <popte$t> <"mallhead>!anu acturer</"mallhead> Co"t cutting within a company "uch a" Campbell'" may "oon gi)e dimini"hing return", In the"e ca"e" the bigge"t co"t "a)ing" are po""ible by re)iewing the "tructure o the "upply chain a" a whole* In -BB- the company operationali"ed what it re erred to a" a continuou" repleni"hment programme* It "et up EDI lin+" with ma4or retailer" and, each morning, retailer" electronically in orm Campbell'" o their demand or all product"* Campbell'" then u"e" thi" in ormation to determine which product" re%uire repleni"hment ba"ed on upper and lower limit" o in)entory agreed with each retailer* 0ruc+" lea)e Campbell'" "hipping plant" and then arri)e at the retailer'" di"tribution centre" each day* 0hi" approach reduced the in)entory o participating retailer" rom about > wee+" to : wee+", with the a""ociated co"t reduction"* 0hi" two1wee+ in)entory reduction i" the e%ui)alent o a -S increa"e in "ale"* 0hi" doe" not "ound li+e a large impro)ement, but retailer"' margin" are thin "o thi" tran"late" to a large increa"e in pro itability on the"e product line"* 0hi"

e$ample i" in"tructi)e "ince it illu"trate" not only the "a)ing" po""ible with thi" approach, but the pit all" o minimi"ing in)entory through the u"e o EDI* 0he problem that Campbell'" encountered wa" that when it ran price promotion" thi" could lead to up to i)e time" the demand* 0hi" cannot be ul illed on a "hort time1"cale "o manu acture and retailer ha)e to co1operate on ad)anced buying to meet the"e pea+" in demand* </popte$t></popup> </"ubtopic> <newpage/> <"ubtopic> <title>Down"tream "upply chain management e$ample"</title> 0he +ey acti)itie" o down"tream "upply chain management are outbound logi"tic" and ul ilment* It i" e)ident that in a (:( conte$t the bene it" or down"tream cu"tomer" are, o cour"e, "imilar to the bene it" that the organi"ation recei)e" through automating it" up"tream "upply chain* 0he"e i""ue" are con"idered rom a mar+eting per"pecti)e in Unit" A and B, but in thi" unit we re)iew the importance o ul ilment in achie)ing e1commerce "ucce""* Clic+ on the lin+" below to read each e$ample* <popup medium><hyperlin+>Jrocery retail</hyperlin+> <popte$t> <"mallhead>Jrocery retail</"mallhead> 7e can al"o u"e the grocery retail mar+et to illu"trate the implication" o e1 commerce or management o the down"tream "upply chain* In addition to being one o the leader" in u"ing technology to impro)e up"tream "upply change management, 0e"co i" al"o one o the leader" in u"ing e1commerce or down"tream "upply chain management* 0e"co'" down"tream "upply chain in)ol)e" "elling direct to cu"tomer"C in other word", it i" operating a "trategy o di"intermediation by reducing the role o it" branche"* 0hrough being an early adopter, 0e"co*com ha" de)eloped a" the world'" large"t online grocery "ite* (y end :===, annuali"ed "ale" were running at nearly T<== million, with >A,=== order" per wee+ ; the mo"t tran"action" or any online "upermar+et* O)er ?==,=== people ha)e "igned up or the grocery "er)ice* 6t the end o thi" Unit, Ca"e Study 6*: highlight" many o the i""ue" that ma+e ul ilment di icult to manage or e1tailer"* </popte$t></popup> <popup big><hyperlin+>(oo+ retail 2outbound logi"tic" management3</hyperlin+> <popte$t> <"mallhead>(oo+ retail 2outbound logi"tic" management3</"mallhead> 0he importance o outbound logi"tic" relate" to the e$pectation" o o ering direct "ale" through a web"ite* In a nut"hell, logi"tic" are crucial to deli)ering

the "er)ice promi"e e"tabli"hed on the web"ite* I a cu"tomer i" in ormed on the web"ite that a boo+ will ta+e two day" to arri)e, there will not be a repeat order i the boo+ arri)e" two wee+" later* 6 di erent angle on the importance o logi"tic" concerning how it relate" to the bottom line i" illu"trated by the ortune" o 6maIon, which i" amou" or not deli)ering pro itability de"pite multi1billion dollar "ale"* 9hilip" 2:===3 reported that the ul ilment mechani"m wa" adding to 6maIon'" co"t" becau"e o "plit "hipment", where multiple deli)erie" o item" rom a "ingle order are nece""ary* E)idence "ugge"t" that 6maIon may re%uire more than three "hipment" to ul il "ome order"* 0hi" i" a particular problem in the US, which i" the "ource o A6S o 6maIon'" re)enue* Fere the di"tance between population centre" re%uire" a networ+ o "e)en di"tribution centre" or "hipment"* 9hilip" 2:===3 e$plain" that the need to ul il a "ingle order by "hipping item" rom multiple location" increa"e" co"t" or po"tage and the labour to a""emble and di"patch good"* 0he alternati)e "ituation o "toc+ing all di"tribution centre" with e)ery product i" inancially prohibiti)e* Some analy"t" "ugge"t that 6maIon "hould change it" logi"tic" "trategy by "eparating out it" di"tribution operation a" a "eparate re)enue "ource and out"ourcing ul ilment to reduce co"t"* </popte$t></popup> <popup medium><hyperlin+>Order trac+ing at Man Jend U 5oo"</hyperlin+> <popte$t> <"mallhead>Order trac+ing at Man Jend U 5oo"</"mallhead> 0he challenge or di"tribution companie" i" to deli)er on time and pro)ide "er)ice" to enable cu"tomer" to trac+ "hipment o product" ordered online* 7hil"t an order trac+ing acility ha" been reality or international parcel carrier" "uch a" ,ederal E$pre"" "ince the mid1-BB=", thi" i" a challenge that need" now to be met by all di"tribution companie" o con"umer and bu"ine"" good"* 0he "cale o the challenge can be gauged by loo+ing at Man Jend U 5oo" 2MJU5, <url>www*)gl*nl</url>3, a Dutch di"tribution company ba"ed within the (enelu$ countrie"* 7ith o)er >,=== employee", a leet o -,?== truc+", and annual re)enue" o appro$imately V?== million, MJU5 wanted to o er it" >=,=== cu"tomer" the ability to trac+ and trace their "hipment" o)er the Internet* 7hile "ome di"tribution companie" o er the ability or the "ender to trace a pac+age ba"ed on a con"ignment number, MJU5 let" both the "ender and the recipient trac+ and trace pac+age" ba"ed on date and de"tination "earche"* 0hi" +ey eature mean" that the "ending partie" can loo+ at their in ormation without the need or a "pecial number, and they can loo+ at all pa"t "hipment" or the pre)iou" two month"* 6t the "ame time, MJU5 cu"tomer" can al"o re%ue"t pic+up" and "hipment" o)er the Internet* </popte$t></popup> </"ubtopic> <newpage/> <"el te"t>

<title>Re)iew %ue"tion</title> <%ue"tion t$t-> <te$t>5i"t the di erent type" o "upply chain "olution" mentioned in thi" "ection*</te$t> < eedbac+>Outbound logi"tic" ,ul ilment 9rocurement Order1trac+ing</ eedbac+> </%ue"tion> </"el te"t> <newpage/> <"ubtopic> <title>IS in ra"tructure or "upply chain management</title> In ormation "y"tem" need to deli)er supply chain visibility to di erent partie" who need to acce"" the "upply chain in ormation o an organi"ation, whether it i" employee" within an organi"ation, "upplier", logi"tic" "er)ice pro)ider" or cu"tomer"* In ormation "y"tem" ha)e a +ey role in pro)iding thi" )i"ibility* Since a huge )olume o in ormation de ine" "upply chain proce""e" or each organi"ation, u"er" o thi" in ormation need to be able to per"onali"e their )iew o the in ormation according to their need" ; cu"tomer" want to "ee the "tatu" o their order, "upplier" want to acce"" the organi"ation'" databa"e to +now when their cu"tomer i" ne$t li+ely to place a ma4or order* Security i" al"o important ; i a company ha" di erential pricing, it will not want cu"tomer" to "ee price di erence"* 0he"e re%uirement" or deli)ering "upply chain in ormation imply the need or an integrated "upply chain databa"e with di erent per"onali"ed )iew" or di erent partie"* 6 typical integrated in ormation "y"tem" in ra"tructure or deli)ering "upply chain management i" illu"trated in ,igure 6*--* It can be "een that application" can be di)ided into tho"e or planning the "upply chain and tho"e to e$ecute the "upply chain proce""e"* 6 +ey eature o a modern "upply chain in ra"tructure i" the u"e o a central operational databa"e that enable" in ormation to be "hared between "upply chain proce""e" and application"* 0hi" operational databa"e i" u"ually part o an enterpri"e re"ource planning "y"tem "uch a" S69, (aan or 9ri"m and i" u"ually purcha"ed with the application" or "upply chain planning and e$ecution* Some o the planning application" "uch a" networ+ "imulation and optimi"ation are more li+ely to be "upplied by "eparate "o tware "upplier"* 0he u"e o Internet technologie" to deli)er in ormation o)er a 0C9/I9 protocol i" becoming "tandard in order to reduce the co"t" o proprietary lea"ed line networ+"* In ormation needed by manager" to inter)ene in the "upply chain proce"" when problem" occur i" deli)ered a" alert" or through continuou" monitoring acro"" "ecure pri)ate intranet" or e$tranet" u"ed to lin+ to partner"*

< igure le t> <image ile> 6/--*gi </image ile> <caption>,igure 6*-- 6 typical IS in ra"tructure or "upply chain management</caption> </ igure>

0o conclude thi" "ection on the IS in ra"tructure to acilitate e1commerce, complete 6cti)ity 6*< ; IS application" or e1commerce* </"ubtopic> <newpage/> <"ubtopic> <title>6cti)ity 6*< So tware application" to acilitate "upply chain management</title> <"mallhead>9urpo"e</"mallhead> 0o "ummari"e the range o application" that can "upport "upply chain management* <"mallhead>6cti)ity</"mallhead> ,rom your +nowledge o the di erent type" o in ormation "y"tem and "o tware application, the ca"e "tudie" in thi" "ection or by re erring to a te$t on in ormation "y"tem" 2e*g* (oci4 et al., -BBB3, name "peci ic "o tware application" or SC!* <popup "crolling> <hyperlin+>Sugge"ted an"wer</hyperlin+> <popte$t> <"mallhead>E1mail me""aging and 769</"mallhead> Jroupware or new product de)elopment 2acro"" intranet" and partner e$tranet"3 6uction" on bu"ine""1to1bu"ine"" e$change" Online catalogue" tailored or buyer" 9rice compari"on engine" 2agent"3 E$tranet acilitie" 2Dell 9remier 9age"3 Order trac+ing C6D/C6! "y"tem" (arcode" or traceability Document management "y"tem" or "haring "tandard", technical "peci ication", engineering drawing" and u"er guide"* </popte$t> </popup> </"ubtopic>

</topic> <newpage/> <topic> <title>!anaging the "upply chain</title> 0he di icultie" acing manager" within a company who are re"pon"ible or managing "upply chain" i" indicated by the"e %uote" rom Con"pectu" 2:===3* ,or e$ample, when a"+ed &Fow di icult do you ind it co1ordinating di"tribution and logi"tic plan" at your "ite"8', a re"pondent rom a UH mobile phone operator de"cribed hi" company'" di"tribution and logi"tic" proce"" a" &an ab"olute nightmare' and another commented# <di"playte$t %uote> &-verything is moving so quic!ly within our industry at the moment that sourcing suppliers and changing our processes to fit with them is a constant battle. We are hoping our #./ software and the roll-out of our e tranet will grow end-to-end 01I but it is easy to forget that we must constantly e amine the business model to ensure we are doing things right *' </di"playte$t> I you are un amiliar with the re"pon"ibilitie" aced by manager" ta"+ed with "upply chain management, complete 6cti)ity 6*>* <newpage/> <"ubtopic> <title>6cti)ity 6*> ; who manage" the "upply chain8</title> <"mallhead>9urpo"e</"mallhead> 0o highlight the role" re%uired o "ta in)ol)ed in "upply chain management* <"mallhead>Gue"tion"</"mallhead> -* Re)iew the 4ob ad)ert" below and, or each, li"t the proce""e" that the manager i" re"pon"ible or and the "+ill" that are re%uired* :* Di"cu"" the practicality o recruiting a per"on to thi" po"ition with the nece""ary "+ill" and e$perience* <"mallhead>6d)ert -* Supply Chain !anager ; 0he Fealthcare Company</"mallhead> The opportunity 7ith annual turno)er o V:K billion, the Fealthcare Company i" a world leader in healthcare product", "er)icing o)er -?= countrie" in the pharmaceutical, con"umer diagno"tic and pro e""ional mar+et"* !anu acturing e$cellence coupled with e$ceptional cu"tomer "er)ice deli)ery i" being met with repeat purcha"e and new account de)elopment* 0o rein orce bu"ine"" growth and pro itability, the Fealthcare Company "ee+ to appoint an e$perienced "upply chain pro e""ional to lead a team o "upply chain e$pert"* The challenge Reporting to the Jeneral !anager, UH, you will pro)ide "trategic and tactical

leader"hip to the UH operation, rein orcing cu"tomer "er)ice e$cellence whil"t "imultaneou"ly deli)ering "upply chain pro itability* Wou will be in"trumental in de)eloping and implementing "upply chain initiati)e" that impact po"iti)ely acro"" procurement, product de)elopment, manu acturing and di"tribution "upply chain"* Wour team will be mea"ured again"t the optimal u"e o bu"ine"" re"ource", lead time reduction", acce"" to real1time data, "toc+ turn", wor+ing capital co"t" and on1time in1 ull deli)ery to cu"tomer"* 0hrough the e ecti)e co1ordination o all bu"ine"" operating department" and the leader"hip o unctional report", purcha"ing, ma"ter "cheduling/manu acturing control and data management, you will be the amba""ador o cu"tomer "er)ice and "upply chain e$cellence* The solution 6n ambitiou" and commercially mature bu"ine"" pro e""ional, your breadth o management e$po"ure will ideally encompa"" "upplier liai"on, "y"tem" de)elopment, implementation and maintenance, material management, "ale" oreca"ting and capacity planning* Career progre""ion to date ha" been enhanced by your ability to lead bu"ine"" pro e""ional" in the e ecti)e implementation o "upply chain "y"tem" and their ongoing de)elopment 2pre erably !R9II3* 9er"onal %ualitie" include out"tanding communication and in luencing "+ill", combined with e$cellent analytical "+ill" and a thorough wor+ing +nowledge o I0 bu"ine"" management tool" 2S69/Oracle/(9EL3 which ha)e allowed your team" to deli)er bu"ine"" "upply e$cellence* T?=,=== O (onu" O Car <"mallhead>6d)ert :* Supply Chain !anager ; 0he !anu acturing Company</"mallhead> 0he !anu acturing Company i" an international manu acturer operating throughout @orthern and Continental Europe* 0he 4ob will in)ol)e the management o in ormation channel" between cu"tomer, company "upplier" and partner"* 0he role re%uire" con"tant monitoring o production again"t co"t to achie)e optimum per ormance le)el"* 0he re"pon"ibilitie" o thi" role will include# 0he de"ign and implementation o in ormation low" that are con"i"tent and appropriate to achie)e minimum co"t to the bu"ine""* !anage trade1o between production e iciency, in)entory and cu"tomer "er)ice* 6naly"i" o data to en"ure that )alid bu"ine"" deci"ion" can be made* !anagement o "er)ice le)el agreement" to ma$imi"e "er)ice whil"t minimi"ing in)entory* Championing the u"e o I0 planning "y"tem"* 0he de)elopment o team member" to en"ure that "tandard" are "et and achie)ed* Candidate" "hould be#

 Educated to a high "tandard, ideally a rele)ant degree* It i" e""ential that you ha)e e$cellent analytical and problem "ol)ing "+ill", "trong "y"tem" +nowledge 2ER9/!R9, inite "cheduling3 and e$perience in planning and in)entory control, pre erably in a "hort lead time en)ironment* Wou "hould be highly moti)ated, with "trong in luencing and communication "+ill"* T >=,=== O car allowance <"mallhead>6d)ert <* 5ogi"tic" manager ; 0he Engineering Company</"mallhead> 6 mar+et leader with turno)er in e$ce"" o T-==m and approaching -,=== employee", the bu"ine"" i" engaged in "ourcing, manu acturing and direct "ale" bene iting rom "trong brand" and a good cu"tomer ba"e* Supply chain and logi"tic" are recogni"ed a" critical, with >=,=== product line" and :=,=== "upplier"* O)er -=,=== order" are proce""ed daily with a "ub"tantial third1party tran"port budget and a large in1hou"e @DC* Wou will be the logi"tic" champion or the bu"ine"", co1ordinating acti)itie" between operation" and unction* Succe""e" will be mea"ured by the achie)ement o po"iti)e change in a continuou" impro)ement en)ironment* In addition, it will in)ol)e direct control o di"tribution and third partie"* Candidate" "hould be o graduate calibre, rom a bac+ground in)ol)ing commercial and budget re"pon"ibility, and "hould be cu"tomer ocu"ed with character, dri)e and energy* 0o V>?,=== plu" car <"mallhead>6d)ert >* 0ran"port !anager ; 0he ,ood !anu acturer</"mallhead> 6 long1e"tabli"hed, amily1owned ood manu acturer with an annual turno)er o T-==m* Re"pon"ible or e icient di"tribution operation rom three "ite" utili"ing a range o owned "peciali"t )ehicle" "upported by appro)ed "ubcontractor", you will po""e"" e$ten"i)e tran"port and management e$perience operating a leet "iIe in e$ce"" o <= )ehicle"* 6nalytical and planning "+ill" are e""ential in order to monitor and optimi"e leet e iciency in re"pon"e to cu"tomer re%uirement* 0o T<6,=== O (ene it" </"ubtopic> <newpage/> 6 new concept i" that o integration manager" who enable "upply chain partner"hip" to be rede"igned* 6pproache" include launching -==1day

pro4ect" to achie)e "hort1term bottom1line re"ult", tran" er o be"t practice between companie", and mobili"ation o 4oint team"* <"ubtopic> <title>0he "upply chain management "trategy proce""</title> 6 "trategic approach or "upply chain management can al"o be de ined u"ing the SOS06C0! approach re erred to in Unit" ? and A* 0able 6*< "ummari"e" a SOS06C0! approach to "upply chain management "trategy de)elopment ba"ed on the guidance o Fughe" et al. 2-BBA3* Strategy element Situation analy"i" SCM approach o- 5ughes et al. (1 ') Jather the data# Internal a""e""ment o current approache" to the "upply chain E$ternal analy"i" o mar+etplace trend" and cu"tomer opportunitie" Set the ob4ecti)e"# De inition o re%uired target return" and relea"e o "hareholder )alue ,rame the "trategie"# De)elopment o "upply chain "trategie" to achie)e the"e goal" 2action"3 9rioriti"ation o operational impro)ement "trategie" and %uic+ win" Implement the change and challenge the thin+ing# ,ormation o a "upply chain "trategy orum to a""e"" the need" 6naly"i" o )alue1added, co"t and cycle time o "upply chain acti)itie" Ca"cade o e$ecuti)e1led pro4ect group" to "crutini"e +ey proce""e" 6llocation o bu"ine"" de)elopment "trategie" to "pon"or e$ecuti)e" !ea"ure the outcome# Integration o "upply chain mea"urement in corporate1wide re)iew" (a"elining to maintain pre""ure or per ormance deli)ery

Ob4ecti)e "etting Strategy

0actic"

6ction"

Control

<caption>0able 6*< 6 SOS06C0! approach to "upply chain management</caption> <newpage/>

Strategie" or "upply chain impro)ement ha)e been categori"ed by Fughe" et al. 2:===3 according to the "cope o change and the "peed o change* 0he"e dimen"ion" o change are "imilar to tho"e a""ociated with bu"ine"" proce"" re1engineering and bu"ine"" proce"" impro)ement 2(oci4 et al. 2-BBB3* ,igure 6*-:, which you will complete in E$erci"e 6*> below, illu"trate" our "trategic option" or the "upply chain* 0he two "trategie" that are relati)ely limited in "cope apply to indi)idual proce""e" "uch a" procurement or outbound logi"tic" and can be thought o a" deli)ering impro)ement at an operational le)el* 0he"e may gi)e "hort1term bene it" while minimi"ing the ri"+ o more radical change* Con)er"ely, where the "cope o change i" more e$ten"i)e there i" a greater ri"+, but al"o greater potential reward* 0he"e change" include complete re1engineering o proce""e" or ma4or change" to the "upply chain* <newpage/> <interaction la"h embed> <title>E$erci"e 6*></title> <in"truction"> ,our alternati)e "trategie" or modi ication o the e1bu"ine"" "upply chain are "hown on the right* Drag each into the correct bo$, according to the change "cope and change "peed you thin+ it corre"pond" to* </in"truction"> < ile>e6/>*htm"w </ ile> < la"h/width>K==</ la"h/width> < la"h/height>>?=</ la"h/height> <caption>,igure 6*-: 6lternati)e "trategie" or modi ication o the e1bu"ine"" "upply chain</caption> </interaction> </"ubtopic> <newpage/> <"ubtopic> <title>!anaging partner"hip"</title> 6 +ey element o re"tructuring o the "upply chain i" e$amining the orm o relation"hip" with partner" "uch a" "upplier" and di"tributor"* 0hi" need to re)iew the orm o partner"hip ha" been accentuated with the globali"ation enabled by e1commerce* 0he importance o orming new international partner"hip" i" indicated by the "ur)ey o UH manu acturing companie" with a turno)er greater than T-==m reported by Con"pectu" 2:===3* 0hi" "howed that, at the time o the "ur)ey, ?:S o the "ample operated their "upply chain at a national le)el, with <=S at a pan1European le)el and -AS on a global "cale* (y :==: the proportion wa" e$pected to change dramatically, with the percentage o tho"e operating on a national le)el alling rom ?:S to ->S, tho"e operating on a pan1European ba"i" ri"ing rom <=S to ?AS and tho"e

operating on a global "cale ri"ing rom -AS to :AS* In thi" "ection we con"ider what orm" the"e partner"hip" "hould ta+e and how technology can be u"ed to acilitate them* <newpage/> Stuart and !cCutcheon 2:===3 "tate that, typically, low co"t i" the main dri)er or partner"hip management in "upply management 2mainly up"tream3* 6ccording to the"e author", the modi ication o "upply chain partner"hip" u"ually ollow" what they de"cribe a" the &recei)ed wi"dom which many practitioner" are rigidly ollowing'* 0hi" approach re%uire" companie" to# -* ocu" on core competencie"C :* reduce their number o "upplier"C <* de)elop "trong partner"hip relation"hip" built on "hared in ormation and tru"t with the remaining "upplier"* Stuart and !cCutcheon 2:===3 "ugge"t that thi" approach may not "uit all need" and the type o relation"hip re%uired will be dependent on the ultimate ob4ecti)e* 7hen re)iewing partner"hip", companie" need to decide the option" or the e$tent o their control o the "upply chain proce""* 0able 6*> pre"ent" "ome "trategic option" or partner"hip" in order o increa"ing control and owner"hip o)er the proce"" by the organi"ation* 9artnering arrangement -* 0otal owner"hip 2more than ?-S e%uity in company3 Technical in-rastructure integration 0echnical i""ue" in merging company "y"tem" .4amples 9urcha"e o (oo+er 2di"tribution company3 by retailer 2Iceland3* Since -BB< Ci"co ha" made o)er <= ac%ui"ition" 2not all SC! related3 Ci"co ha" al"o made o)er >= in)e"tment" in hardware and "o tware "upplier" Cable and 7irele"", Compa% and 6pple new e1bu"ine"" "olution 6rrangement "ometime" u"ed or IS out"ourcing IS9" ha)e per ormance and a)ailability S56" with penalty clau"e" 0e"co In ormation E$change ca"e "tudy 2thi" unit3

:* In)e"tment "ta+e 2le"" than >BS e%uity3 <* Strategic alliance >* 9ro it1"haring partner"hip ?* 5ong1term contract 6* 9re erred "upplier"

0echnical i""ue" in merging company "y"tem" Collaboration tool" and groupware or new product de)elopment 6" abo)e See abo)e* 0ool" or managing "er)ice le)el agreement" important 9ermanent EDI or Internet EDI lin+" "et up with pre erred partner"

K* Competiti)e tendering

0ender" i""ued at intermediary or buyer'" web"ite 6" abo)e 6uction" at intermediary or buyer'" web"ite

A* Short1term contract" B* Spot mar+et" and auction"

(uyer1arranged auction", e*g* SmithHline (eecham 2Unit :3 6" abo)e (u"ine""1to1bu"ine"" mar+etplace", e*g* <url>www*itoi*com</url>

<caption> 0able 6*> Strategic option" or partner"hip"</caption> In 0able 6*>, option - i" total in"ourcing o a particular proce"" while option" : to B gi)e )arying degree" o out"ourcing* 0here i" al"o a continuum between collaborati)e partner"hip" where ri"+" are "hared 2option" - to ?3 and competiti)e "ourcing where mar+et competition i" u"ed to achie)e the be"t combination o price and )alue* @ote that although an organi"ation may lo"e control o the process through out"ourcing, a contractual arrangement will "till enable them to e$ert a "trong control o)er the outputs o the proce""* 6lthough there i" a general trend to out"ourcing, thi" doe" not mean that owner"hip arrangement" are not uncommon, a" the Iceland ac%ui"ition o (oo+er "how"* ,rom 0able 6*> it can be "een that a" the depth o relation"hip between partner" increa"e", the )olume and comple$ity o in ormation e$change re%uirement" will increa"e* ,or a long1term arrangement, in ormation e$change can include# "hort1term order"C medium1 to long1term capacity commitment"C long1term inancial or contractual agreementC product de"ign, including "peci ication"C per ormance monitoring, "tandard o product and "er)ice %ualityC logi"tic"*

,or "hort1term relation"hip", "imple in ormation on tran"action" only, "uch a" the EDI purcha"e order e$ample in Unit <, i" all that i" re%uired* <newpage/> Stuart and !cCutcheon 2:===3 pre"ent a "impli ied "et o partner"hip choice" to tho"e in 0able 6*> 2pre)iou" page3* 0hey "ugge"t that the partnering option cho"en "hould be dependent on the core ob4ecti)e* I thi" i" co"t reduction, then a relation"hip with competiti)e ten"ion i" re%uired 2e%ui)alent to option" 6 to B in 0able 6*>3* 6lternati)ely, i the core ob4ecti)e i" )alue1added bene it" "uch a" impro)ed deli)ery "peed, additional de"ign eature" or the need or

cu"tomi"ation, then the &arm'"1length' approach o option" 6 to B may not be appropriate* In thi" ca"e they "ugge"t that a "trategic alliance or co1operati)e partner"hip i" the be"t option* Stuart and !cCutcheon point out that the competiti)e ad)antage" achie)ed through co"t reduction are li+ely to be "hort1 li)ed, "o companie" will need to turn increa"ingly to )alue1added bene it"* Each "upplier ha" to be con"idered to determine which type o partner"hip i" mo"t appropriate* ,or e$ample, IC5, the UH computer "upplier, ha" "trategic alliance" with only :;<S, with the ma4ority in the co"t reduction category* </"ubtopic> <newpage/> <"el te"t> <title>Re)iew %ue"tion</title> <%ue"tion match-> <te$t>!atch the"e element" o "upply chain management ramewor+ with the SOS06C outline o "trategy#</te$t> <an"wer>(a"elining to maintain pre""ure or per ormance deli)ery and integration o "upply chain mea"urement in corporate1wide re)iew"</an"wer> <an"wer>Jather the data concerning an internal a""e""ment o current approache" to the "upply chain and e$ternal analy"i" o mar+etplace trend" and cu"tomer opportunitie"</an"wer> <an"wer> ,ormation o a "upply chain "trategy orum to a""e"" the need"C analy"i" o )alue1added, co"t and cycle time o "upply chain acti)itie" </an"wer> <an"wer>De inition o re%uired target return" and relea"e o "hareholder )alue</an"wer> <an"wer>9rioriti"ation o operational impro)ement "trategie" and %uic+ win"</an"wer> <an"wer>De)elopment o "upply chain "trategie" to achie)e goal"</an"wer> <match>Situation analy"i"</match> <match>Ob4ecti)e "etting</match> <match>Strategy</match> <match>0actic"</match> <match>6ction"</match> <match>Control</match> < eedbac+> SOST0C Strategy element Situation analy"i" .lement o- Supply Chain Management Jather the data concerning an internal a""e""ment o current approache" to the "upply chain and

Ob4ecti)e "etting Strategy 0actic" 6ction"

Control

e$ternal analy"i" o mar+etplace trend" and cu"tomer opportunitie" De inition o re%uired target return" and relea"e o "hareholder )alue De)elopment o "upply chain "trategie" to achie)e goal" 9rioriti"ation o operational impro)ement "trategie" and %uic+ win" ,ormation o a "upply chain "trategy orum to a""e"" the need"C analy"i" o )alue1added, co"t and cycle time o "upply chain acti)itie" (a"elining to maintain pre""ure or per ormance deli)ery and integration o "upply chain mea"urement in corporate1wide re)iew"

</ eedbac+> </%ue"tion> </"el te"t></topic> <newpage/> <"ummary> <title>Summary</title> -* Supply chain management in)ol)e" the co1ordination o all "upply acti)itie" o an organi"ation, rom it" "upplier" and partner" to it" cu"tomer"* Up"tream "upply chain acti)itie" 2procurement and inbound logi"tic"3 are e%ui)alent to buy1"ide e1commerce and down"tream "upply chain acti)itie" 2"ale", outbound logi"tic" and ul ilment3 e%uate to "ell1"ide e1commerce* :* 0here ha" been a change in "upply chain management thin+ing rom the pu"h1oriented "upply chain that empha"i"e" di"tribution o a product to pa""i)e cu"tomer" to a pull1oriented "upply chain that deli)er" )alue to cu"tomer" who are acti)ely in)ol)ed in product and "er)ice "peci ication* <* 0he )alue chain concept i" clo"ely allied to "upply chain management* It con"ider" how )alue can be added both between and within element" o the "upply chain and at the inter ace between them* >* Electronic communication" enable )alue networ+" to be created that enable the e$ternal )alue chain to be dynamically updated in re"pon"e to mar+etplace )ariable"* ?* Supply chain" and )alue chain" can be re)i"ed by di"aggregation or re1 aggregation* Di"aggregation may in)ol)e out"ourcing core "upply chain acti)itie" to e$ternal partie"* 6" more acti)itie" are out"ourced, a company mo)e" toward" a )irtual organi"ation* 6* Electronic communication" ha)e played a ma4or role in acilitating new model" o "upply chain management* 0echnology application" that ha)e

acilitated "upply chain management are# e1mailC web1ba"ed orderingC EDI o in)oice" and paymentC web1ba"ed order trac+ing* (ene it" o deploying the"e technologie" include# more e icient, lower co"t e$ecution o proce""e"C reduced comple$ity o the "upply chain 2di"intermediation3C impro)ed data integration between element" o the "upply chainC reduced co"t" through ea"e o dynamic out"ourcingC enabling inno)ation and cu"tomer re"pon"i)ene""* K* Intranet" connecting internal bu"ine"" application" "uch a" operational enterpri"e re"ource planning "y"tem" and deci"ion1"upport1oriented data warehou"e" enable "upply chain management* Such "y"tem" increa"ingly "upport e$ternal lin+" to third partie" "uch a" "upplier"* A* Hey "trategic i""ue" in "upply chain management include#<br> a* rede"igning "upply chain acti)itie"C b* re"tructuring partner"hip" which "upport the "upply chain through out"ourcing or owner"hip* </"ummary> <newpage/> <ca"e"tudy> <title>Ca"e "tudie"</title> <"mallhead>Ca"e "tudy 6*- 0e"co de)elop buy1"ide e1commerce "y"tem or "upply chain management</"mallhead> <para> Read thi" <popup "crolling><hyperlin+>Ca"e Study</hyperlin+><popte$t> <"mallhead>Tesco develop buy6side e6commerce system -or supply chain management</"mallhead> Retailer" ha)e long "ought greater collaboration in their "upply chain", but ew ha)e managed to achie)e it* One that ha" i" 0e"co, the UH'" large"t grocery retailer, which ha" built a reputation a" one o Europe'" mo"t inno)ati)e retailer" in it" u"e o in ormation technology* 6" with many retailer", 0e"co ha" long u"ed electronic data interchange 2EDI3 to order good" rom "upplier" and the networ+ lin+" -<== o 0e"co'" :=== "upplier", repre"enting around B6 per cent by )olume o good" "old in 0e"co "tore"* 0he EDI "y"tem "tarted operating in the -BA=" and it" u"e wa" initially limited to "treamlining "tore repleni"hment* In -BAB, 0e"co too+ it" ir"t "tep" on the road to collaboration and began u"ing it" EDI networ+ to help it" "upplier" better oreca"t demand* 6bout <?= "upplier" recei)e EDI me""age" with detail" o actual "tore demand, depot "toc+holding" and 0e"co'" wee+ly "ale" oreca"t"* 6ccording to (arry Hnichel, 0e"co'" "upply chain director, thi" oreca"ting pro4ect ha" been "ucce"" ul a" a)erage lead time" ha)e allen rom "e)en to three day"* &@e)erthele"", the in ormation low i" "trictly one way,' he "ay"*

&7e "till do not +now the true )alue o thi" "ale" data becau"e we ne)er get any eedbac+*' In -BBK, 0e"co thu" "tarted it" 0e"co In ormation E$change 20ie3 pro4ect in an attempt to achie)e much more "ophi"ticated two1way collaboration in it" "upply chain, a" "hown in ,igure 6*-= below* < igure le t> <image ile> 6/-=*gi </image ile> <caption>,igure 6*-= In ra"tructure or 0e"co In ormation E$change 20IE3</caption> </ igure> &0hi" really wa" a big de)elopment or u",' he "ay"* &0he guiding principle wa" to combine our retailing +nowledge with the product +nowledge o our "upplier"*' 6 large 0e"co "tore may carry ?=,=== product" while a "upplier will ha)e at mo"t :==* 6n important aim o the 0ie pro4ect wa" thu" to "hi t re"pon"ibility or managing product" down to the rele)ant "upplier* &Supplier" clearly ha)e a better under"tanding o their "peci ic product line", "o i you can engage the "upplier to manage the "upply chain you are going to get much better product a)ailability and reduce your in)entory,' "ay" Eorge Ca"tillo, head o retail bu"ine"" or JE In ormation Ser)ice", which de)eloped the e$tranet technology behind 0ie* Supplier" pay rom T-== to T-==,=== to 4oin 0ie, depending on their "iIe* 0hi" then allow" them to acce"" the 0ie web "ite and )iew daily electronic point1o 1 "ale 29o"3 data rom 0e"co "tore"* 6ccording to !r Ca"tillo, 0ie let" "upplier" monitor change" in demand almo"t in real time and "o gi)e" them more time to react* &(e ore, 0e"co'" "upplier" would not ha)e "een a problem until 0e"co got on the phone to them,' he "ay"* &@ow, it i" the "upplier" who get on the phone to 0e"co and they can "ee much earlier on i a product i" not "elling well*' 0he data can be analy"ed in a number o way" to allow "upplier" to "ee how "ale" per orm by di"tribution centre, by indi)idual "tore or e)en by 0M region ; important or promotion"* 0he management o promotion" i" a comple$ proce"" re%uiring clo"e cooperation between "upplier and retailer* Fowe)er, it ha" traditionally been di icult to do well becau"e o the lac+ o "hared data to "upport collaborati)e deci"ion"* &9romotion" can be a nightmare,' "ay" !r Hnichel* 0e"co and JEIS added a promotion" management module to the "er)ice in -BBB* It allow" retailer" and "upplier" to collaborate in all "tage" o the promotion# initial commercial planning, "upply chain planning, e$ecution and inal e)aluation*

6ccording to St I)el, one o 0e"co'" bigger ood "upplier", 0ie ha" "a)ed <= per cent o it" annual promotional co"t"* !ore than 6== "upplier", repre"enting K= per cent o 0e"co'" bu"ine"", are u"ing 0ie today and 0e"co aim" to ha)e all it" "upplier" onboard by the end o :===* 6round >= "upplier" are participating in the mo"t recent addition to the 0ie "y"tem, a collaborati)e data module* 0hi" aim" to allow &"eamle""' planning in which the planning data on the "creen i" 4ointly illed in by both retailer and "upplier* !r Hnichel "ee" thi" a" radical change or the retail indu"try a" "upplier" and retailer" ha)e traditionally wor+ed to "eparate agenda"* Fe eel" 0ie ha" much potential to "treamline 0e"co'" "upply chain and to help "upplier" impro)e their "er)ice le)el" and promotion"* (ut retailing i" a traditional indu"try and many "upplier" are "et in their way"* &Only two "upplier" ha)e undamentally changed the way they wor+ a" a re"ult o 0ie* @e)erthele"", they can bring product" to mar+et much a"ter than any o their competitor",' he "ay"* <"ource>Source# 6rticle by Jeo rey @airn, <hyperlin+>*inancial Times<url>www* t*com</url></hyperlin+>, < !ay :===</"ource>

</popte$t> </popup>, then an"wer the %ue"tion" below*</para> -* 7hat bene it" doe" 0e"co'" in ormation e$change o er to the retailer and it" "upplier"8 :* 7hat di erence" ha)e the u"e o 0IE added o)er the original EDI "y"tem8 <* Di"cu"" rea"on" why only two o 0e"co'" "upplier" ha)e undamentally altered the way they wor+ a" a re"ult o 0IE* </ca"e"tudy> <newpage/> <ca"e"tudy> <title>Ca"e "tudie"</title> <"mallhead>Ca"e "tudy 6*: 6 "hort hi"tory o Sain"bury'" approach to e1 ul ilment model"</"mallhead> <para> Read thi" <popup "crolling><hyperlin+>Ca"e Study</hyperlin+><popte$t>

<"mallhead>0 short history o- Sainsbury7s approach to e6-ul-ilment models</"mallhead> 1ackground UH grocery retailer Sain"bury'" commenced it" online "er)ice in -BB? when there wa" a ir"t pilot at Solihull in the 7e"t !idland"* In "pring -BBA it" Orderline "er)ice wa" launched* 0hi" wa" e)entually rolled out to :K "tore", but in -BBB it wa" rationaliIed to eight "tore" near 5ondon* 6 rebranded &Sain"bury'" to you' e1commerce "er)ice wa" launched in -BBB and thi" i" targeted to reach 6= per cent o the UH population by :==-* Ody 2:===3 report" that 9atric+ !cFugh, the group e1commerce director, i" hoping that within our year" there will be an online re)enue contribution o := per cent* 0he action" Sain"bury'" and other grocer" are ta+ing are in"tructi)e "ince they highlight "ome o the practical problem" o ul ilment aced by retailer" when e1commerce "er)ice" are de)eloped* 0he di icultie" are magni ied in thi" in"tance by the range o product" and the limited "hel li e o "ome item"* 7e will now highlight "ome o the i""ue" rai"ed by the Sain"bury'" ca"e* Initially, a" with the 0e"co operation, the Orderline ul ilment wa" )ia indi)idual "tore"* 0hi" pro)ed to be too e$pen"i)e, the chie e$ecuti)e at the time wa" %uoted a" "aying# &a "tore1ba"ed home "hopping "er)ice i" not a )iable propo"ition'* E"timate" or the co"t o "electing or pic+ing each 0e"co Direct order range rom T-: to T-?* 0hi" i" a "igni icant amount when the cu"tomer only pay" a T? "er)ice charge or each purcha"e* 0hi" "how" that mo)ing rom cu"tomer "el 1"er)ice to a more per"onal "er)ice re)er"e" the economie" o "cale built up by "upermar+et"* Sain"bury'" now u"e" the model o regional pic+ing centre"* It i" planning to build a networ+ o regional pic+ing centre"* Currently there i" one in 5ondon, but other" are planned* !anaging the rate o e$pan"ion o e1commerce "er)ice" i" important "ince pre)iou" initiati)e" appear to ha)e in)ol)ed e$pan"ion that wa" too rapid, re"ulting in o)er1capacity* 6 mi$ed ul ilment model i" currently u"ed with the cu"tomer ha)ing the option o ordering direct and then pic+ing up rom a "upermar+et or the order being di"patched rom a warehou"e* 7ith the ormer it i" not po""ible to chec+ "toc+ "ince it i" dependent on how the "toc+ le)el" in an indi)idual "tore )ary* (oth approache" place con"traint" on the time the order mu"t be pic+ed by* Fome deli)ery al"o gi)e" i""ue" o "cheduling deli)ery )an" in line with when it i" con)enient or cu"tomer" to be at home to recei)e the good"* Con)enient or the cu"tomer could mean %uic+ly, or at a pre1de ined time, or at a pre1de ined location at wor+, home or el"ewhere, but "uch le$ibility i" di icult to "chedule* 0he di iculty or the e1tailer i" that the "peed o e1commerce tran"action "et" up an e$pectation with the cu"tomer o rapid ul ilment or what ha" been re erred to a" ul ilment )elocity* 0he "cale o order" al"o )arie" con"iderably according to buying beha)iour* Ody 2:===3 report" that rom a gi)en cu"tomer, initial order" tend to be "imilar to a wee+ly "hopC the )alue then increa"e" a" cu"tomer" e$periment, and then decline" to a core o "taple order"* In term" o technology &Orderline' ran a" a "tandalone operation* 0hi" i" al"o

the ca"e with &Sain"bury'" to Wou'* !cFugh would li+e to integrate the "y"tem with I0 rom the main "y"tem, but "ay" thi" may ta+e i)e year"* 0hi" "ugge"t" the di iculty o getting a "u iciently a"t integration with e$i"ting "y"tem" and which per orm ade%uately* It o ten pro)e" ea"ier to purcha"e an o 1the1"hel "y"tem* 0he -> million cu"tomer loyalty card cu"tomer" are not yet integrated with the "ite* 6 urther data i""ue i" that there are regional price di erence" with di erent "tore" and price" can change re%uently* 6" a re"ult indicati)e rather than e$act price" ha)e to be u"ed on the web "ite* Sain"bury'" ha" al"o con"idered how in ormation content can be u"ed to "upport the buying e$perience* !irroring the approach u"ed in "tore, in a "eparate initiati)e &0a"te or 5i e' i" aimed at pro)iding an electronic magaIine that build" on the "ucce"" o the in"tore magaIine that i" read by nearly three million "hopper"* <"ource> Source# (a"ed on Ody 2:===3* </"ource> 8eblink# Sain"bury'" web "ite 2<url>www*"ain"bury"toyou*co*u+</url>3 </popte$t></popup>, then an"wer the %ue"tion" below*</para> (a"ed on the Sain"bury'" ca"e "tudy ma+e note" under the ollowing heading" which illu"trate the typical problem" o ul ilment acing any e1tailer# -* :* <* Deci"ion" about pic+ing location and method* Deci"ion" about di"tribution and deli)ery* Deci"ion" about integration o new technology with e$i"ting technology*

</ca"e"tudy> <newpage/> <ca"e"tudy> <title>Ca"e "tudie"</title> <"mallhead>Ca"e "tudy 6*< Integrated "y"tem" o er big bene it"</"mallhead> <para> Read thi" <popup "crolling><hyperlin+>Ca"e Study</hyperlin+><popte$t> <"mallhead>,ntegrated systems o--er big bene-its</"mallhead> In any di"cu""ion about how companie" can apply new idea" to manu acturing automation, two name" ; Siemen" and 6(( ; "tand out* 6" well a" being global leader" in automation, the two ha)e been in the ore ront in reorgani"ing their operation" around new concept" in I0, much o thi" in)ol)ing the internet*

Siemen" o Jermany and the Swi""1Swedi"h 6(( are prime e$ample" o &old economy' companie" ; in both ca"e", their bu"ine""e" date to the -Bth century ; which ha)e "pent con"iderable e ort adapting to new digital technologie"* 0he companie" are two o Europe'" leader" in engineering1related indu"trie" ; with annual "ale" o around V6=bn, Siemen" i" roughly three time" bigger than 6((* Jlobal "pending on manu acturing automation i" put at V6=bn a year, with roughly hal o thi" related to product" "uch a" control "y"tem", motor", power "y"tem" and dri)e", plu" the re"t to &"o t area"', "uch a" "o tware, "er)ice" and con"ultancy* Sale" o both Siemen" and 6(( in thi" area o bu"ine"" add up to VKbn;VAbn a year, ma+ing them ; according to many e"timate" ; the two leader" in automation worldwide* Ri)al" include In)en"y" o the UH, Foneywell and Emer"on o the US, ,rance'" Schneider, and !it"ubi"hi Electric and ,anuc o Eapan* Siemen" and 6(( each employ more than >?,=== people globally in their manu acturing automation di)i"ion", with "ale" "pread around the world* Fowe)er, they each concentrate on di erent "ector"* 7hile Siemen"' main "trength i" automating actorie" which turn out di"crete product", "uch a" car" or machine tool", 6(( ha" more o it" employee" in)ol)ed with wor+ing out how to automate proce"" indu"trie", anything rom chemical" to cement* ,actory and proce""1plant automation each account or roughly ?= per cent o the total manu acturing automation bu"ine""* In term" o "peci ic automation1related product", Siemen" i" the bigge"t ma+er worldwide o programmable logic control" 295C"3, the ubi%uitou" "mall computer" "een in a huge number o production line" worldwide, while 6(( i" the large"t "upplier o dri)e "y"tem" u"ed to power a wide )ariety o machinery* Uniting the two companie", howe)er, i" a +een intere"t in ma+ing the mo"t o de)elopment" in "o tware and communication" technology and applying them to their automation acti)itie"* (oth Siemen" and 6(( "ee the"e two area" a" the &glue' which hold" together their e ort" in pro)iding "olution" or the cu"tomer, applied to automation problem"* XIntegration o all the )ariou" part" o the automation "pectrum i" the +ey to )irtually e)erything we do,Y "ay" Fanne" ,eldmeyer, a )ice pre"ident at Siemen"' automation and dri)e" di)i"ion* 7hat he mean" i" be"t illu"trated by loo+ing at a typical automation pro4ect* 0hi" could in)ol)e a programme to wor+ out the mo"t e icient way to manage, or e$ample, a car or paper plant* In each ca"e, people in charge o the

in"tallation would re%uire "y"tem" to organi"e the low o in ormation rom indi)idual wor+ "tation" ; or in"tance, where part" o a car body are welded together ; to a centrali"ed control room "o that "uper)i"or" can monitor what it happening in the entire proce""* Computer" in the control room may be re%uired to lin+ up with "upplier" or cu"tomer", to help in the low o part" or order ul ilment* 6l"o +een to tap in on the low o data will probably be product de)elopment "ta or people in)ol)ed in plant maintenance* (oth Siemen" and 6(( are increa"ingly u"ing the internet a" part o the proce"" o integrating the people in)ol)ed in the automation chain* 0he networ+ could be u"ed, or in"tance, or connecting up "upplier" to the control room in an electric motor actory "o that part" low i" co1ordinated more e iciently* 7here both companie" are probably in a better po"ition than many o their "maller ri)al" i" in their ability to o er the cu"tomer ; u"ing the internet ; an immen"e range o idea" and "olution" ba"ed around a lot o technological e$perti"e* XFow you connect with cu"tomer" i" the bigge"t challenge or u",Y "ay" Eorgen Centerman, head o 6(('" automation di)i"ion and who ha" 4u"t been named a" the new chie e$ecuti)e o the whole o 6((, ta+ing o)er rom Joran 5indahl in Eanuary* X7e thin+ we can u"e the internet increa"ingly to tailor what we do to "uit the "peci ic need" o our cu"tomer",Y "ay" !r Centerman* 6t Siemen", or in"tance, internet lin+" are being u"ed routinely to tran"mit rom the company'" de)elopment o ice" million" o line" o new in"truction" to the :m;<m Siemen" 95C" which are operating in plant" around the world* In the pa"t, "uch new "et" o computer code would be tran"mitted either by a$ or po"t* 0he inno)ation mean" that cu"tomer" can ta+e ad)antage ar more "peedily o new thin+ing rom Siemen"' de)elopment "ta in what could potentially lead to a big boo"t or their plant"' competiti)ene""* 6t 6((, the company i" organi"ing, or about ?= large cu"tomer" "uch a" Du9ont or 9anCanadian 2a large @orth 6merican energy company3, "pecial internet "ite" which contain large amount" o data about both their own operation", and po""ibly tho"e o other comparable in"tallation" where 6(( "upplie" automation "y"tem"* 0he "ame "ite" can be u"ed to lead technical "ta rom the cu"tomer to new product" or "er)ice pac+age" which could "ol)e a "peci ic problem ; or in"tance about how to "peed up a particular chemical proce""* In thi" way, employee" rom a cu"tomer could u"e an 6(( internet "ite a" a &chat room' to di"cu"" new idea" with either an 6(( engineer or one rom another 6(( cu"tomer, be ore trying out a product "imulation o)er the internet

and then, po""ibly, placing an order* X7e can u"e the internet to bridge the gap between the &con"ultancy' "ide to what we do and the inal tran"action,Y "ay" !r Centerman* In)e"tment by Siemen" and 6(( in internet connection" i" al"o being matched by e ort" to en"ure that cu"tomer" ne)er eel they are too ar rom human contact* Siemen"' automation and dri)e" di)i"ion ha" "pent "ome E:=m on "etting up three automation call centre" ; in Jermany, Singapore and 0enne""ee ; in which -== "ta can tal+ to cu"tomer" around the world in "e)eral language"* 0he call centre" are "een a" a "upplement to the internet a" a way o reacting to the need" o cu"tomer"* X7hate)er we do in the technical part o our operation", we mu"t alway" bear in mind that the cu"tomer need" to thin+ we are clo"e to him and intere"ted in what he i" doing,Y "ay" !r ,eldmeyer* <"ource>Source# (y 9eter !ar"h, <hyperlin+>*inancial Times<url>www* t*com</url></hyperlin+>, :K October :=== and ,0I0 @o)ember :===*</"ource> </popte$t> </popup>, then an"wer the %ue"tion below*</para> -* E$plain how Siemen" and 6(( ha)e u"ed in ormation "y"tem" to approach "upply chain management according to the article* <popup medium> <hyperlin+>6n"wer</hyperlin+> <popte$t> 0he"e companie" ocu" on manu acturing automation a" a +ey area o their bu"ine""* 0he e$ample o a particular pro4ect "how" how they u"e in ormation "y"tem" or# wor+ planningC in ormation low analy"i"C lin+ing with "y"tem" o "upplier" or cu"tomer"C Internet increa"ingly u"ed or updating program code in 95C" to control plant" around the worldC u"ing the web to di""eminate "upport and new product de)elopment in ormationC call centre "y"tem" to manage "upport*

</popte$t> </popup> </ca"e"tudy> <newpage/> <a""ignment"> <title>6""ignment</title> E$plain the rele)ance o "upply chain concept" to de)eloping e1bu"ine"" "trategy* <popup medium> <hyperlin+>Sugge"ted an"wer</hyperlin+> <popte$t> 0he ollowing concept" "hould be included in thi" an"wer# 9u"h )"* pull orientation (uy1"ide )"* "ell1"ide ocu" Stage model" or u"ing in ormation "y"tem" or "upply chain management 2"ee al"o Unit ?, D0I model3 Supply chain re"tructuring# )ertical and )irtual integration !anaging partner"hip" through creation o )alue networ+" Relation"hip between "upply chain and )alue chain </popte$t> </popup> </a""ignment"> <newpage/> <reading> <title>,urther reading</title> <re item> Dei"e, !*, @owi+ow, C*, Hing, 9* and 7right, 6* 2:===3 - ecutive)s guide to e-business. *rom tactics to strategy* Eohn 7iley and Son", @ew Wor+, @W* See Chapter ?, Indu"try tran" ormation or de"cription o )alue networ+" and partnering arrangement"* </re item> <re item> ,ingar, 9*, Humar, F* and Sharma, 0* 2:===3 -nterprise --commerce* !eghan1Hi ler 9re"", 0ampa, ,5* See Chapter 6, E$tended Supply Chain !anagement* </re item> <re item>

Fughe", E*, Ral , !* and !ichel", (* 2-BBA3 Transform your supply chain* International 0hom"on (u"ine"" 9re""* 6n acce""ible introduction to "upply chain management, with many e$ample"* See Chapter B, 0he electronic "upply chain* </re item> <re item> 7e"tland, E*C* and Clar+, 0*F* 2:===3 2lobal electronic commerce" theory and case studies* !a""achu"ett" In"titute o 0echnology* Chapter >, Supply chain management, u"e" a )alue chain per"pecti)e on the application o e1commerce to SC!* </re item> </reading> <newpage/> <weblin+"> <title>7eblin+"</title> <re item> <url>www*a"cet*com</url> 6SCE0 9ro4ect ; e$cellent collection o article" co1ordinated by 6ccenture and !ontgomery re"earch* </re item> <re item> <url>www*con"pectu"*com</url> Con"pectu" ; Indu"try "tudie" on range o indu"try topic", including procurement* </re item> <re item> <url>www*iolt*org*u+</url> In"titute o 5ogi"tic" and 0ran"port* O)er)iew o logi"tic", plu" lin+" to related "ite"* </re item> <re item> <url>www*cio*com/ orum"/ec/</url> CIO !agaIine E1commerce re"ource centre ; one o be"t online magaIine" rom a bu"ine""/technical per"pecti)e ; "ee other re"earch centre" al"o, e*g* intranet", +nowledge management* </re item> </weblin+"> <newpage/> <re erence"> <title>Re erence"</title>

<re item>6rnold, D* 2:===3, Se)en rule" o international di"tribution* 3arvard 4usiness 0eview, @o)ember1December, -<-;K*</re item> <re item>(en4amin, R* and 7igand, R* 2-BB?3 Electronic mar+et" and )irtual )alue1chain" on the in ormation "uperhighway* #loan /anagement 0eview, 7inter, 6:;K:*</re item> <re item>(oci4, 9*, Cha ey, D*, Jrea"ley, 6* and Fic+ie, S* 2-BBB3 4usiness Information #ystems. Technology, 5evelopment and /anagement * ,0 !anagement, 5ondon*</re item> <re item>Chandra, C* and Humar, S* 2:===3 6n application o a "y"tem analy"i" methodology to manage logi"tic" in a te$tile "upply chain* #upply .hain /anagement" 6n International +ournal , 6 October, ?2?3, -: p, pp* :<>; :>?*</re item> <re item>Con"pectu" 2:===3 Supply chain management "o tware i""ue* 9rime !ar+eting 9ublication", Eune* 9!9 Re"earch* <url>www*pmp*co*u+</url></re item> <re item>Dei"e, !*, @owi+ow, C*, Hing, 9* and 7right, 6* 2:===3 - ecutive)s guide to e-business. *rom tactics to strategy* Eohn 7iley and Son", @ew Wor+, @W*</re item> <re item>D0I 2:===3 4usiness In The Information 6ge 7 International 4enchmar!ing #tudy %888* UH Department o 0rade and Indu"try* 6)ailable online at# <url>www*u+online orbu"ine""*go)*u+</url>*</re item> <re item>,ield, C* 2:===3* 760ERS0O@E'S# ,ully integrated into e$i"ting ul ilment "y"tem"* *inancial Times, 7edne"day < !ay*</re item> <re item>,i"her, !* 2-BBK3 7hat i" the right "upply chain or your product8 3arvard 4usiness 0eview, !arch;6pril, -=?;-6*</re item> <re item>Fagel III, E* and Rayport, E* 2-BBK3 0he new in omediarie"* The /c9insey :uarterly, @o* >, ?>;K=*</re item> <re item>Faye", R* and 7heelwright, S* 2-BB>3 0estoring our competitive edge* Eohn 7iley and Son", @ew Wor+*</re item> <re item>Famill, E* and Jregory, H* 2-BBK3 Internet mar+eting in the internationali"ation o UH S!E", +ournal of /ar!eting /anagement, -<, -; <*</re item> <re item>Fughe", E*, Ral , !* and !ichel", (* 2-BBA3 Transform your supply chain* International 0hom"on (u"ine"" 9re""* </re item> <re item>Hraut, R*, Chan, 6*, (utler, (* and Fong, 6* 2-BBA3 Coordination and )irtuali"ation# the role o electronic networ+" and per"onal relation"hip"* +ournal of .omputer /ediated .ommunications , <2>3* </re item> <re item>!agreta, E* 2-BBA3 0he power o )irtual integration* 6n inter)iew with !ichael Dell* 3arvard 4usiness 0eview, !arch;6pril, K:;A>*</re item> <re item>!alone, 0*, Wate", E* and (en4amin, R* 2-BAK3 Electronic mar+et" and electronic hierarchie"# e ect" o in ormation technology on mar+et "tructure and corporate "trategie"* .ommunications of the 6./, <=263, >A>; BK*</re item> <re item>Ody, 9* 2:===3 0a"te or the 7eb* e.business 0eview, -2B3, December, ?6;B*</re item> <re item>9hillip", S* 2:===3 Retailer'" crown 4ewel i" a uni%ue cu"tomer databa"e* *inancial Times, > December*</re item> <re item>9orter, !* and !illar, M* 2-BA?3 Fow in ormation gi)e" you competiti)e ad)antage* 3arvard 4usiness 0eview, Euly;6ugu"t, ->B; 6=*</re item>

<re item>Guelch, E* and Hlein, 5* 2-BB63 0he Internet and International mar+eting* #loan /anagement 0eview, Spring, 6=;K?*</re item> <re item>Ritchie, 5*, (urne", (*, 7hittle, 9* and Fey, R* 2:===3 0he bene it" o re)er"e logi"tic"# the ca"e o the !anche"ter Royal In irmary 9harmacy* #upply .hain /anagement" 6n International +ournal , 6 October, ?2?3, ::6; <>*</re item> <re item>Stein ield, C*, Hraut, R*, and 9lummer, 6* 2-BB63 0he impact o interorgani"ational networ+" on buyer;"eller relation"hip"* +ournal of .omputer /ediated .ommunication, -2<3* </re item> <re item>Stuart, ,* and !cCutcheon, D* 2:===3 0he manager'" guide to "upply chain management* 4usiness 3ori;ons, !arch;6pril, <?;>>*</re item> <re item>0immer", 9* 2-BBB3 -lectronic commerce strategies and models for business-to-business trading* Eohn 7iley "erie" in in ormation "y"tem", Chiche"ter, England*</re item> <re item>7omac+, E* and Eone", D* 2-BBA3 Lean thin!ing* 0ouch"tone ; Simon and Schu"ter, 5ondon, UH*</re item> </re erence"> </unit> <a""e""ment> <title>Jraded a""e""ment %ue"tion"</title> <%ue"tion mch-> <te$t>6n appropriate "trategy to achie)e timely, accurate, paperle"" in ormation low i"#</te$t> <an"wer>Integrate thi" acti)ity i" integrated into all "upply chain planning</an"wer> <an"wer correct>Re)i"ion o organi"ation proce""e" "upported by in ormation "y"tem"</an"wer> <an"wer>E icient replacement</an"wer> <an"wer>E icient "tore a""ortment"</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6n appropriate "trategy to ma$imi"e e iciency o promotion" i"#</te$t> <an"wer correct>Integrate thi" acti)ity i" integrated into all "upply chain planning</an"wer> <an"wer>Re)i"ion o organi"ation proce""e" "upported by in ormation "y"tem"</an"wer> <an"wer>E icient replacement</an"wer> <an"wer>E icient "tore a""ortment"</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion>

<%ue"tion mch-> <te$t>6n appropriate "trategy to optimi"e or time and co"t in the ordering proce"" i"#</te$t> <an"wer>Integrate thi" acti)ity i" integrated into all "upply chain planning</an"wer> <an"wer>Re)i"ion o organi"ation proce""e" "upported by in ormation "y"tem"</an"wer> <an"wer correct>E icient replacement</an"wer> <an"wer>E icient "tore a""ortment"</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6n appropriate "trategy to optimi"e the producti)ity o retail "pace and in)entory i"#</te$t> <an"wer>Integrate thi" acti)ity i" integrated into all "upply chain planning</an"wer> <an"wer>Re)i"ion o organi"ation proce""e" "upported by in ormation "y"tem"</an"wer> <an"wer>E icient replacement</an"wer> <an"wer correct>E icient "tore a""ortment"</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>0he up"tream "upply chain i"#</te$t> <an"wer>E$clu"i)ely in"ide an organi"ation</an"wer> <an"wer correct>In)ol)ed with procurement o material rom "upplier"</an"wer> <an"wer>0he di"tribution o product" or deli)ery o "er)ice" to cu"tomer"</an"wer> <an"wer>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>0he down"tream "upply chain i"#</te$t> <an"wer>E$clu"i)ely in"ide an organi"ation</an"wer> <an"wer>In)ol)ed with procurement o material rom "upplier"</an"wer> <an"wer correct>0he di"tribution o product" or deli)ery o "er)ice" to cu"tomer"</an"wer> <an"wer>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer>

</%ue"tion> <%ue"tion mch-> <te$t>0he correct "e%uence o an organi"ation'" "upply chain rom a "y"tem" per"pecti)e i"#</te$t> <an"wer>0ran" ormation proce"", ac%ui"ition o re"ource", deli)ery to cu"tomer"</an"wer> <an"wer>0ran" ormation proce"", deli)ery to cu"tomer", ac%ui"ition o re"ource"</an"wer> <an"wer correct>6c%ui"ition o re"ource", tran" ormation proce"", deli)ery to cu"tomer"</an"wer> <an"wer>Deli)ery to cu"tomer", ac%ui"ition o re"ource", tran" ormation proce""</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>ZZZZZ** o er" the opportunity to buy direct rom the "upplier with reduced co"t" and "horter cycle time"</te$t> <an"wer>Countermediation</an"wer> <an"wer>Contramediation</an"wer> <an"wer correct>Di"intermediation</an"wer> <an"wer>Re1intermediation</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>ZZZZZZZ o er" the chance to u"e bu"ine""1to1bu"ine"" e$change" to "ource product" at lower co"t"</te$t> <an"wer>Countermediation</an"wer> <an"wer>Contramediation</an"wer> <an"wer>Di"intermediation</an"wer> <an"wer correct>Re1intermediation</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>0he typical aim o the pu"h approach to "upply chain management i"#</te$t> <an"wer>Reduce co"t" o di"tribution</an"wer> <an"wer>0o enhance product and "er)ice %uality</an"wer> <an"wer>Reduce co"t" o new product de)elopment</an"wer> <an"wer correct>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion>

<%ue"tion mch-> <te$t>0he typical aim o the pull approach to "upply chain management i"#</te$t> <an"wer>Reduce co"t" o di"tribution</an"wer> <an"wer correct>0o enhance product and "er)ice %uality</an"wer> <an"wer>Reduce co"t" o new product de)elopment</an"wer> <an"wer>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6 concept or con"idering +ey acti)itie" that an organi"ation can per orm or manage with the intention o adding )alue or the cu"tomer a" product" and "er)ice" mo)e rom conception to deli)ery to the cu"tomer i"#</te$t> <an"wer correct>Malue chain</an"wer> <an"wer>Malue networ+</an"wer> <an"wer>Mirtual networ+</an"wer> <an"wer>Mirtual )alue networ+</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>0he connection" between an organi"ation and it" "trategic and non1 "trategic partner" that orm it" e$ternal )alue chain i" a#</te$t> <an"wer>Malue chain</an"wer> <an"wer correct>Malue networ+</an"wer> <an"wer>Mirtual networ+</an"wer> <an"wer>Mirtual )alue networ+</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6 "ell1"ide partner#</te$t> <an"wer>,ul il" primary or core )alue chain acti)itie"</an"wer> <an"wer>Supplie" "er)ice" that mediate the internal and e$ternal )alue chain</an"wer> <an"wer correct>Include" a bu"ine""1to1bu"ine"" e$change</an"wer> <an"wer>,ul il" only "econdary )alue chain acti)itie"</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6 "trategic out"ourcing partner#</te$t> <an"wer correct>,ul il" primary or core )alue chain acti)itie"</an"wer>

<an"wer>Supplie" "er)ice" that mediate the internal and e$ternal )alue chain</an"wer> <an"wer>Include" a bu"ine""1to1bu"ine"" e$change</an"wer> <an"wer>,ul il" only "econdary )alue chain acti)itie"</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6 )alue chain integrator#</te$t> <an"wer>,ul il" primary or core )alue chain acti)itie"</an"wer> <an"wer correct>Supplie" "er)ice" that mediate the internal and e$ternal )alue chain</an"wer> <an"wer>Include" a bu"ine""1to1bu"ine"" e$change</an"wer> <an"wer>,ul il" only "econdary )alue chain acti)itie"</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>In ZZZZZZ* the ma4ority o "upply chain acti)itie" are underta+en and controlled outside the organi"ation by third partie"</te$t> <an"wer>Mertical integration</an"wer> <an"wer correct>Mirtual integration</an"wer> <an"wer>Mirtual di"aggregation</an"wer> <an"wer>Mertical di"aggregation</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>In ZZZZZZZZ** the "trategy i" or a" many a" po""ible "upply chain acti)itie" to be underta+en and controlled within the organi"ation</te$t> <an"wer correct>Mertical integration</an"wer> <an"wer>Mirtual integration</an"wer> <an"wer>Mirtual di"aggregation</an"wer> <an"wer>Mertical di"aggregation</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6 "tructured method or data e$change or up"tream "upply chain management i"#</te$t> <an"wer>Electronic data interchange 2EDI3 </an"wer> <an"wer>E1mail</an"wer> <an"wer>7eb ba"ed ordering</an"wer>

<an"wer correct>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>IS can be u"ed to impro)e product %uality by#</te$t> <an"wer>Reducing in)entory holding time"</an"wer> <an"wer>Increa"ing product cycle time"</an"wer> <an"wer correct>6utomating in ormation collection about product "ati" action</an"wer> <an"wer>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>IS can be u"ed to reduce co"t" o SC! by#</te$t> <an"wer correct>Reducing in)entory holding time"</an"wer> <an"wer>Increa"ing product cycle time"</an"wer> <an"wer>6utomating in ormation collection about product "ati" action</an"wer> <an"wer>a3 and c3</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>IS can be u"ed to reduce cycle time by#</te$t> <an"wer>Reduced comple$ity o the "upply chain</an"wer> <an"wer>Impro)ed data integration between element" o the "upply chain</an"wer> <an"wer correct>Increa"ed e iciency o indi)idual proce""e"</an"wer> <an"wer>Reduced co"t through out"ourcing</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6n e$ample o IS to "upport a "trategic alliance i"#</te$t> <an"wer>!iddleware</an"wer> <an"wer>Electronic auction"</an"wer> <an"wer correct>Collaboration tool" and groupware or new product de)elopment</an"wer> <an"wer>9ermanent EDI or Internet EDI</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch->

<te$t>6n e$ample o IS to "upport lin+" with pre erred "upplier" i"#</te$t> <an"wer>!iddleware</an"wer> <an"wer>Electronic auction"</an"wer> <an"wer>Collaboration tool" and groupware or new product de)elopment</an"wer> <an"wer correct>9ermanent EDI or Internet EDI</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6n e$ample o IS to "upport "pot mar+et purcha"e" i"#</te$t> <an"wer>!iddleware</an"wer> <an"wer correct>Electronic auction"</an"wer> <an"wer>Collaboration tool" and groupware or new product de)elopment</an"wer> <an"wer>9ermanent EDI or Internet EDI</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6n e$ample o IS to "upport integrated "y"tem" in a merged organi"ation i"#</te$t> <an"wer correct>!iddleware</an"wer> <an"wer>Electronic auction"</an"wer> <an"wer>Collaboration tool" and groupware or new product de)elopment</an"wer> <an"wer>9ermanent EDI or Internet EDI</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6 "upply chain management deci"ion concerning the "tructure o the "upply chain i"#</te$t> <an"wer>Up"tream or down"tream</an"wer> <an"wer correct>Mertical or )irtual di"integration</an"wer> <an"wer>9u"h or pull approach</an"wer> <an"wer>Malue networ+ oriented</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6 "upply chain management deci"ion concerning whether ocu" i"

cu"tomer1ba"ed i"#</te$t> <an"wer>Up"tream or down"tream</an"wer> <an"wer>Mertical or )irtual di"integration</an"wer> <an"wer correct>9u"h or pull approach</an"wer> <an"wer>Malue networ+ oriented</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6 "upply chain management deci"ion concerning direction o ocu" i"#</te$t> <an"wer correct>Up"tream or down"tream</an"wer> <an"wer>Mertical or )irtual di"integration</an"wer> <an"wer>9u"h or pull approach</an"wer> <an"wer>Malue networ+ oriented</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion> <%ue"tion mch-> <te$t>6 "upply chain management deci"ion concerning orm o integration with partner" i"#</te$t> <an"wer>Up"tream or down"tream</an"wer> <an"wer>Mertical or )irtual di"integration</an"wer> <an"wer>9u"h or pull approach</an"wer> <an"wer correct>Malue networ+ oriented</an"wer> <an"wer>@one o the abo)e</an"wer> </%ue"tion></a""e""ment>