Digital Business and E-Commerce Management - SoSe 2023 - Chap. 7 (Supply Chain Management)

Digital Business
Supply-chain management
Chapter 7
Business Application:
Digital Business, Dr. Michael Bott, SoSe 2023

Digital Business
Largely based on
Supply chain management -
 Contents of this chapter

• Introduction to supply-chain management (SCM)
• Procurement
• Inventory management
• Customer demand
• 13 approaches to analyze (digital) supply chain opportunities

 Supply-chain management (SCM)

• SCM is the coordination and execution of all supply activities for materials, services and
information - of an organization.
• It ranges from (sub-) suppliers [tier 2/tier 1 suppliers] and partners to its
(end-)customers; the boundaries extend therefore beyond the own organization.
• Supply chain usually
does not deal with
the supply of
o Human resources ->
HRM Sub-
supplier
• UpostCraepaitmal/-
i>nbFionuanncde supply
choaiEnqudiepamlsenwt i-
t >h
tranPsuarccthiaosninsgon
the procurement side
• Downstream/outbound
supply chain deals with
the selling-side
 Main challenges for supply chain management

• Inventory management -> The task is usually
o to have always enough stock at hand to avoid interruptions of the production process and to
avoid not being able to deliver to customers on time, and
o to keep inventories as low as possible to avoid binding excess capital, to require less space and
to reduce the risk of obsolete stock
• (Customer) Demand forecasting
o This is a requirement to manage production and inventories successful
o It is usually a friction point between sales and supply chain management. Forecasts are always
wrong! Sales can only try to predict and update customers’ demand.
o It easily leads to the ‘blame-game’ between sales and supply chain management.
• Receive and deliver goods on time
o Cost-optimized managing of suppliers and delivery partners to ensure timely receipt of
goods/services -> digital order and delivery tracking can provide early notice of
upcoming problems, safety-stock levels can buffer some degree of fluctuations
o Cost-optimized managing of delivery partners to ensure timely delivery to customers -> Stock at
customer sites or consignment stocks can be (costly) protection devices

 Main success factors for supply chain management

• The ‘Four Pillars of Supply Chain Success’ (IGD, 2017)
o Customer centric: The entire supply chain exists to serve customers
o Powered by people: Attract, retain and constantly train suitable employees
o Transformed by technology: Data-driven environment, automation, synchronization
o Resilient and responsive: Fast and suitable reactions to environmental changes

Supply-chain
management
Procurement
 Procurement
• Procurement deals with the upstream supply-chain;
the downstream side will be covered -> digital marketing and CRM (chapters 9 and 10)
Many items we discuss for upstream SCM also apply in principle to downstream SCM
• Upstream supply chain management includes the entire procurement process.
Procurement is more than just purchasing, it refers to all activities involved with
obtaining items from a supplier, this includes:
o Identification and request of required goods/services.
o Purchasing process
o Inbound logistics, incl. transportation, customs and taxation requirements
o Inventory management before goods are processed in operations
o Initiate payment process for incoming goods/services (this is an overlap with finance)
• E-procurement is the electronic integration and management of all procurement
activities, including purchase request, authorization, ordering, delivery, receipt and
acceptance, and payment between a purchaser and a supplier.
• Logistics, as part of the supply chain manages the flow of things between a point of
origin and a point of destination

Supply-chain
management
Procurement
 Benefits of e-procurement
• E-procurement should aim for the improvement of the ‘5 rights of purchasing’ (Baily et al.,
1994), which means sourcing:
o At the right price -> agreed price or ‘best’ price
o Delivered at the right time -> based on production and inventory management
o Of the right quality -> according to defined quality standards and characteristics
o Of the right quantity -> not too much to avoid high inventory or obsolete stock
not too little to avoid shortage in production
o From the right source -> approved or designated supplier
• Further benefits of e-procurement

o Reduction of costs for existing processes, e.g. by replacing personnel
o Make information faster, cheaper and more convenient available to whoever needs to have such
information, e.g. access to up-to-date inventory or order procurement status
o Enabling faster decision-making
o Enabling around-the-clock data processing and availability
o Increasing the efficiency of partnerships, e.g. through dis- or re-intermediation
o Up-to-date inventory tracking, less sales losses due to stock-out and less obsolete stock
o Make processes more stable and reliable, e.g. by eliminating human errors
Supply-chain
management
Procurement
• Further benefits of e-procurement (continued):
o Speeding up the overall process through a combination of the above factors
o More convenience in managing supply chain networks
o Optimizing the entire procurement process by considering the entire process and its improvement
holistically, across functional departments, e.g. by
 Shortening the process chain by eliminating process steps, e.g. transmission and storing of paperwork
 Cutting out intermediaries that are not longer needed, e.g. retailers or whole-sellers
 Improved workflows, e.g. via e-sign authorities
 Enabling material requests to be initiated by the internal customers, e.g. the production workshop
o Enable new or a wider range of suppliers through the internet
o Facilitate and shorten the search for new suppliers by using search engines and suppliers’
websites
o Enable link to digital platforms, e.g. e-marketplaces
o Facilitate and accelerate claim handling with suppliers, e.g. by issuing e-claims and uploading
pictures as evidence
o Automating payment processes that only need an authorized approval to be executed

Inventory
 Inventory management
• Inventories can be located at different sites -> Digital tools facilitate tracking
o At suppliers or buy-side intermediaries as incoming goods
o At manufacturers as incoming goods, in operations, (semi-)finished products in warehouse
o At sell-side intermediaries as finished goods
o At customers as consignment stock for finished goods
• Digitalization facilitates inventory and supply chain management via KPIs
o On time delivery, e.g. as a percentage of all deliveries
o Time from order to delivery, usually related to geographical distance
o Number of items in inventory
o Value of inventory
o Value of slow-moving or obsolete inventory
o Inventory turnover (see next slide)

Inventory
 Inventory turnover
Cost of goods sold
• Inventory turnover =
Average inventory value
• Inventory turnover evaluates the efficiency with which inventory is utilized by a firm.
It measures how many times the inventory is sold or used within a time period,
usually a
ye a r
• A h i gh turnover rate indicates that inventory levels may not be adequate and
that the firm could lose out on possible business
• A low turnover rate indicates that inventory levels may be too high or that the
company has a problem to sell its products
• Common inventory ratios depend on the industry in which a company is active

Inventory
 Inventory terminology
• Inventory level -> the actual
stock available
• Safety stock -> a defined
minimum stock level as
safety buffer to avoid out-of-
stock in unforeseen
situations
• Lead time -> the time it
takes from placing an
order until receiving the
new products
• Reorder level -> Inventory
level at which a new Source:
order needs to be placed
so that new products
arrive when
• Rtheeorindveer nptooirnyt r-e>aTcihmees wthheen a new order has to be placed
to receive goods when the isnavfentytosrtyoclekvlelviesl expected to reach the
safety stock level.
• Replenishment/order quantity -> order volume, to fill up stock to maximum level
Inventory
Inventory
 Real-life challenges for

inventory management:
• Faster than expected
sales -> Inventory drops
below safety stock level,
an out-of-stock situation
c a n o c cu r
• D e la y s i n incoming shipments ->
Inventory drops below safetSoyurcse:twowwc.rkesearchgate.net/figure/Safety-stocks-and-the-associated-effects-of-variability-in-the-supply-
chain_fig3_320345934
level, an out-of-stock situation

can occur Different Same time
time period period
• Short-shipments (= low quantity) or
wrong products arrive -> Inventory
drops below safety stock level, an
out-of-stock situation can occur
 Key to a successful SCM -> instantly
available
• Sales forecasts and trends -> ERP
• Inventory data -> ERP
• Digitalization (Example: EDI)
Inventory
 Vendor-managed inventory (VMI)

• VMI is an inventory management procedure in which the supplier, usually
the manufacturer, is in charge of optimizing the inventory held by the
customer
• The policy aims to avoid loss of business due to not enough available products.
• One of the principles of VMI is a shared inventory risk. If the products cannot be sold, the
vendor will take (part of it) back. However, by having instant access to all sales data,
the vendor can better control the replenishments and try to avoid obsolete inventory.
• A risk of VMI is ‘channel-stuffing’, a supplier pushing excessive volumes
• Key to the success of modern VMIs is an electronic data interchange and modern
replenishment determination algorithms and use of digital marketing to promote the
products.

Supply-chain
management
Customer demand
 Customer demand/Sales forecast
• Since the whole purpose of a company is to satisfy its customers’ demands and thereby to
create profits, customers’ demands are the starting point for all supply chain considerations
• Process chart:
Organization
Marketing & Sales
Sales
forecast
Purchasing
Suppliers SCM Customers

Production
schedule
Material Operations
& Finished
compo- goods
nent inventory
Parts & semi-
inventory
finished inventory
• Information flow:
Anticipate customer demand -> issue sales forecast -> determine production schedule
-> determine supplies needed -> purchasing
Supply-chain
management
Customer demand
 Sales forecast
• It is a key task for sellers/sales department
• It is the starting point for all supply-chain tasks
• Sales forecasts are often a difficult task within sales departments, sellers/sales
departments have a tendency to resist establishing sales forecasts, because:
o Proper sales forecasts can be quite time consuming -> digital tools can help a lot
o Sellers usually do not want to ‘waste their time’ with such ‘admin tasks’ (it is a core sales task!)
o Sellers may not see the benefits from it if companies manage inventories tightly and products are
often not available in time for
customers That means sellers will be wrong
o A sales forecast is a commitment
Potential ‘blame game‘ with SCM, operations,
o A sales forecast is (almost always) wrong finance , general management
• The ‘blame game’ can be minimized if all parties involved are
o Dealing respectfully with each other -> core values
o Trust, that all other colleagues aim to give their best effort for the company
o Understand the challenges and difficulties of the other departments
This is where personal relationships among the actors are important (positively/negatively)

Supply-chain
management
Customer demand
 Sales forecasts
• The precision of sales forecasts depends on the quality of the information sales (&
marketing) have about their customers and on the lead time of the products/services
• Information about customer demand depends on the nature of the customer’s business
o Original equipment manufacturers (OEM) -> usually a high forecast precision
o Project business -> often a good forecast since seller receives often timely
information about the chances of success
o Whole-/retail business -> usually no direct customer information, demand
is estimated based on past history plus latest trends, external
benchmarks, promotions or new offerings
o Replacement/spare parts business -> usually limited direct customer information, forecast
based on past history and latest trends and marketing
activities
o Tailor-made products -> forecast often only for components, final production
after order with product specification
• Lead time
o Long lead items, e.g. turbines -> only components may be pre-fabricated, final production
usually after orders are received
o Short-term, ready-on-inventory products -> Forecast determines production, precision
depends on sales’ customer/market assessment
o The shorter the lead time -> the more important are fast reactions -> the more important is
digitalization
Supply-chain
management
Customer demand
 Sales forecast
• A typical sales forecast can look like in the chart below. It contains:
o Monthly projections per article -> Sales prices, volumes and revenues
o (Sub-)totals and deviations in %
o Historical data, often previous year(s), e.g to give guidance for seasonal sales patterns
• As the year progresses, actual data replace forecast data and thereby indicate the trend for
the current year
• Forecasts are updated regularly, e.g. monthly/weekly/…

Identify e-SCM
 Identify e-SCM opportunities

• The speed and reliability of deliveries to customers can be a major competitive (dis-)
advantage
• Through e-commerce and the digital improvement of supply chain processes, same-day
• dAeclcioverdriiensghtoavae sbteuedny e(Hnaaublsemd.ann et al., 2014) Amazon’s
same-day delivery option for certain areas has led to 20-30% increases in its
purchase conversion
• But, keep in mind, once more and more companies offer same-day deliveries, these
options become standards and offering it does not constitute a competitive advantage
anymore and thus it does not necessarily increase sales anymore; instead, not offering it
may result in a loss of sales. The whole value chain is then lifted to a higher (=faster)
level.
• Same-day deliveries require 4 supply chain and logistics prerequisites:
o Products need to be locally available -> Nearby warehouses or “fulfillment centers”
o Real-time overview of inventories -> Requires advanced digital tools
o Fast picking and packing processes -> Needs efficient internal process
o Very fast pick-up and deliveries to customers -> Dynamic route-planning for deliveries0
Identify e-SCM
Identify e-SCM
 Identify e-SCM opportunities

13 focus areas
• Value chain
• Supply chain network
• Supply chain structure
• Supply chain KPIs
• Supply chain geographical organization
• ‘the 5 rights’ of purchasing
• SOSTACTM
• Types of waste to be minimized
• Information flow and processing
• Particular digital business offerings
• Opportunity examples in purchasing and SCM (from chapter 4)
• Business process model and notation (BPMN) process
• Matrix framework for process activities analysis

Identify e-SCM
 Value chain opportunities

• In analyzing the supply chain value, one can distinguish the
o internal value chain -> value creation within the boundaries of the organization
o external value chain -> value creation outside the organizational boundaries
• A value is added if
costs are reduced or a
sellable item/feature is
added Porter (1980),
• On the left are two functional view
different approaches
how to view at a
company’s value chain
Deise et al. (1980), process view

Identify e-SCM
 Value chain opportunities

• Value chain analysis is an analytical framework for decomposing an organization into its
individual (= smallest) activities and determining value creation and inefficiencies at each
step
• For each (small) step, identify whether the activity
o Creates value as perceived by the customer (= willingness to pay for it)
-> Enhance, if possible
o Creates no value but is required by R&D or operations
-> Consider how and when to eliminate these actions
o Creates no value and is not really mandatory
-> Eliminate as soon as possible
• If a supply chain for a crucially important product (range) seems to fail, one of the last
attempts to resolve the situation is a “war room”.
A war room refers to an assembly of responsible people from all essential functions in
one
location/room. It is a means of leadership that emphasizes fast decision-making across
the
entire value chain (Ford example)

Identify e-SCM opportunities
 Network and structure opportunities

• Intended network partnerships should depend on a company’s core objectives
and each partnership may require different actions/targets
• Cost reduction -> provides usually only short-term advantages, may be imitated
• Value addition, e.g. delivery speed, design features, innovation, customization
• The supply chain structure
rests along a continuum
between doing lots of
operations in-house (‘vertical
integration’) or outsourcing
activities and placing them
under external control
• (D‘vigirittuaal
lbiunstiengersasthioans’)str
ongly supported to virtually
integrate such external tasks

Identify e-SCM
 Key performance indicators (KPI) opportunities

• The achieve superior performance and competitiveness, it is essential to select the most
suitable KPIs -> “What you measure is what you get!”
• Array of supply chain performance measures / KPIs. Several of these KPIs involve the
cooperation of external partners (based on Sambasivan et al, 2009):
o Costs of supply chain -> Total SCM costs, distribution costs, human/IS costs, buying
price development, headcount needed (fix, variable)
o Profitability -> ROI , ROS, ROE, EBIT, EBITDA, gross margins
o Customer satisfaction -> Time till replenishment, on-time deliveries, stockout,
back orders, average lead time, shipping errors, claims
o Flexibility -> Volume flexibility, delivery flexibility, mix changes
o Supply chain partnerships -> Development of new suppliers/partners, connectivity
with partners, time to supply, training/qualifications
o Demand anticipation -> Forecasting speed and precision
o Delivery performance -> False deliveries, requested on-time deliveries, lead time
o Customer service -> Time and quality to answer to customers, satisfaction level
o Inventory efficiency -> Total inventory value, turnover, WIP, obsolete stock, aging
o Supply chain finance -> Working capital and cashflow requirements, accounts
payable and receivable, payment terms in procurement
o Internal/external time performance -> Time required for internal/external processes
o Quality performance -> Customer rejection rates, supplier quality assessment
Identify e-SCM
 Geographical opportunities
• Manufacturers that intend to enter new overseas markets should consider to follow
the below steps in entering the foreign market (based on Arnold, 2000):
o Select local distributors, do not let them select you;
-> The question who selects whom indicates the power between the parties
-> Depending on your products and your long-term intentions (e.g. setting up your own
distribution network) you may also start with agents

-> Clarify where you look for additional distributors and what your (area) rules are
o Select multiple, independent , e.g. for different regions or products; you want to be able
to control and guide the network
o Look for distributors capable of developing markets rather than those with new customer
contacts
-> Look for strong partners that can actually help you AND with whom you can agree on shared
objectives how to develop the market
o Tn-r>eoCatutlowcarol dnigstpraibrutntoerrss,absa s e d o
t er mbjepcatritvneearss,sneosstmteemntpocrrliaotrenyrigm-a, acrokmetm-eunntricyavteehtihclies sto
other
partners
-> They will only engage if they see long-term benefits for themselves
-> Qualify and support them
-> Build relationship and trust based on respectful interaction, rule-based
cooperation and fair risk/benefit sharing

Identify e-SCM
 Geographical opportunities (continued)

• Follow the below steps
o Support market entry by committing money, managers and marketing ideas and recruit and
train own local personnel (should be independent from distributors)
-> If the market is perceived as an important future market, get your own people into the market
to gain own market knowledge
-> Link financial support either to degree of involvement of own people or to performance KPIs,
e.g. turnover, to ensure you get a return for your money
o From the start, maintain control over marketing strategy
-> Effective marketing knowledge is an asset you have to build up, otherwise you are at the
mercy of the local distributors
-> Aim to understand why different marketing activities are working or not
o Make sure distributors provide detailed market and financial performance data
-> This is their asset and they may not want to provide it freely -> you have to give them
something in
return, e.g. financial marketing support, long-term contract
-> Compare behavior and performance of distributors against each other to gain an
understanding what is locally
o Build links among national distributors at the earliest opportunity
-> Once you have a solid understanding of the market, interaction among distributors is ok to
utilize
synergies

Identify e-SCM
 Benefits of the ‘5 rights of purchasing’

• The benefits are not in the planning but in the consequent execution
• Question, how well the ‘5 rights of purchasing’ are already achieved and where you
suspect improvement potentials:
o At the right price -> agreed price or ‘best’ price
o Delivered at the right time -> based on production and inventory management
o Of the right quality -> according to defined quality standards and characteristics
o Of the right quantity -> not too much to avoid high inventory or obsolete stock
not too little to avoid shortage in production
o From the right source -> approved or designated supplier

Identify e-SCM
 SOSTAC Planning opportunities

• SOSTACTM (Paul and Smith, 1999) is a
strategic planning approach
• The individual process steps are:
o Situation analysis
-> Micro- and macro-environmen t
o Objective setting
-> KPIs
o Strategy definition
-> Big picture
o Tactics
-> Break-down of strategy in
detailed steps
o Actions
-> Actions to implement strategy
and get products to
customers
o Control
-> Measure the outcome/KPI
Source: Digital Business and E-Commerce
-> What can be improved? Management, 7th edition, Pearson

Identify e-SCM
 SOSTAC Planning risks

• Strategic changes can occur at
different speeds
• Related to the speed are the
realization of opportunities and the
risks of failures
• Common change approaches are
(in sequence of growing changes)
o Process improvement
o Continuous improvement
o Process integration or disintegration
o Radical transformation
Degree of risk increases
Source: Hughes et al., 1998

Identify e-SCM
 Opportunities in reducing ‘Waste’

• One way to improve a company’s value creation is to look at all possible types of
inefficiencies and identify ways to reduce/eliminate them
• 7 types of ‘Waste’ (Lean management system from Toyota)
o Over-production -> Too much production, early production requires space & resources
o Waiting -> Time is wasted, have seamless/continuous processes (Corona test
centres)
o Transportation -> Transportation during operations does not add any value in itself,
but it costs time and resources and can lead to
damage/contaminations
o Unsuitable production -> Too high precision/quality for individual processes or components
require unnecessarily sophisticated equipment and require
special/high amount of resources
o Inventory -> While inventory may realistically be unavoidable, any inventory is
per se an inefficiency
o Unnecessary activities -> Any inefficient movement wastes resources and unergonomic
activities can harm employees
o Errors -> Error-monitoring and corrections cost resources

Identify e-SCM
 Opportunities in reducing ‘Waste’

Identify e-SCM
 Opportunities in information flow and processing

• An effective & efficient flow and processing of information is crucial for a competitive
advantage in SCM. And it is an area where ICT offers great improvement potentials.
• Remember the requirements for high quality data/intelligence:
o Updated
o Complete
o Accurate
o Objective
o Relevant
o Permissioned
• Analyze how information that is received and processed in SCM is
o Gathered
o Organized
o Selected
o Synthesized
o Distributed
o Used / acted upon
Where are weaknesses or potentials for further improvements?

Identify e-SCM
 Opportunities of particular digital business offerings

• Remember the typical value additions of digital offerings (6 Cs’) [-> Chap. 2]
o Content Detailed, updated and relevant information
o Choice Wider choice of products than via traditional channels
o Cost reduction More transparency, lower cost due to increased choices and efficiencies
o Customization Personalization of information for audiences
o Community Information exchanges in forums, chat-rooms, etc.
o Convenience Take action whenever and wherever IT is available
• Content
o Detailed and updated information available instantly
o Search engines have revolutionized the gathering for information
• Choice
o Choice of products is growing strongly
o Offerings are not anymore bound by physical warehouses
o Platforms allow offerings from an unlimited number of firms at one platform

 Opportunities of particular digital business offerings

• Cost/efficiency drivers
o Reduced inventory management costs
o Reduced purchasing costs
• Customization
o Supply chain managers can customize their key dashboards according to their needs
o Tailoring purchase conditions improves the cost/benefit ratio for targeted suppliers
• Community
o Facilitates communication among groups, e.g. via email, chat-rooms or messenger services
• Convenience
o Take action whenever and wherever needed, ordering outside of business hours
o Breaking down traditional geographical barriers, cross-continent communication
o Purchasing without visiting stores

 Opportunities in Upstream – Operations – Downstream

• Upstream -> procurement and inbound logistics
o Use of RFID (microchip based monitoring tags) to identify whereabouts (and environmental
conditions) of goods at any time
o Tracking items via bar- or QR-codes
• Internal operations
o Better monitoring of work in progress (WIP) quantities and locations
o Facilitate more operations flexibility -> smaller lot sizes, less WIP
o Improving steering and coordination of production equipment, less waiting time
o Increased efficiency + smaller lot sizes -> shorter cycle times
• Downstream -> outbound logistics to fulfill orders

o Dis- and re-intermediation and counter-mediation
o Outsourcing services and virtual integration and monitoring

Identify e-SCM
 Opportunities in Information systems

• Information systems for an efficient SCM has to fulfill the following requirements – are
these met or are there improvement potentials?
o Contain a central data-base
for all supply chain
information
o Quality data! It has to be
accurate, updated, relevant
and permissioned
o Authorities to enter/modify
and to access data has to be
defined for all users
o Personalization of views
should be possible to see
only data of interest
o Data security, e.g. from
illegitimate access

Identify e-SCM
 Where can digitalization help in the procurement process?

• Search engines can help to identify many potential suppliers fast, e.g. previously
unknown SMEs or foreign companies
• Research potential suppliers and their programs through suppliers’ websites
• Utilize supplier tools, e.g. website or apps, to select the right (technical) products
• Utilize supplier tools to get a visual impression how the component looks like when
integrated in the final product
• Place product requirements and terms & conditions online for suppliers to download
• Online registration and evaluation of suppliers
• Conduct online purchase auctions
• Utilize CAD programs to integrate supplier components directly in own drawings
• Feed own demand quantities and timings directly into suppliers’ material and production
planning
• Define an algorithm how to evaluate suppliers’ performances, incl. audit results
• Define an algorithm how to allocate automatically demand volumes to different suppliers
• Use of EDI for automated purchase procurement; possibly with just-in-time delivery
• Transport equipment, e.g. forklifts, can be equipped with sensors to increase transport
safety for vehicles, goods and personnel

Identify e-SCM
 Where can digitalization help in the supply-chain process?

• Goods labeled with bar-/QR-codes can automatically be booked into inventory
• RFID-chips can enable to closely follow the path of inventories in transit
• Bar-/QR-/RFID-chips can be used to track product or order status through each step of
the value chain
• Efficient use of warehouse space through random storage (and identification)
• Up-to-date inventory status can be accessed by whoever needs that information
through the intranet, including allowing for already sold or booked inventories and
soon new incoming items
• Easy, updated and instant information exchange with intermediaries, e.g. via extranet
• Delivery times can be calculated based on existing orders and on goods in production
and incoming supplies
• Access to goods in store at suppliers and reliable information at their deliver dates and
quantities to own firm
• Various entities can access and share a common inventory, e.g. a central warehouse
• Automated quality assessment of incoming goods, including claiming defect products
automatically to suppliers and updated potential order delays
• Algorithm can adapt automatically safety stock and reorder stock level and quantity
• Transport tasks and transport ways can be specified and monitored by a central
computer to each logistics vehicle

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Digital Business and E-Commerce Management - SoSe 2023 - Chap. 7 (Supply Chain Management)

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Digital Business

Digital Business, Dr. Michael Bott, SoSe 2023

 Contents of this chapter

Digital Business, Dr. Michael Bott, SoSe 2023

 Supply-chain management (SCM)

 Main challenges for supply chain management

Digital Business, Dr. Michael Bott, SoSe 2023

 Main success factors for supply chain management

Digital Business, Dr. Michael Bott, SoSe 2023

Digital Business, Dr. Michael Bott, SoSe 2023

• Further benefits of e-procurement

Digital Business, Dr. Michael Bott, SoSe 2023

Digital Business, Dr. Michael Bott, SoSe 2023

Digital Business, Dr. Michael Bott, SoSe 2023

 Real-life challenges for

level, an out-of-stock situation

 Vendor-managed inventory (VMI)

Digital Business, Dr. Michael Bott, SoSe 2023

Suppliers SCM Customers

Digital Business, Dr. Michael Bott, SoSe 2023

Digital Business, Dr. Michael Bott, SoSe 2023

 Identify e-SCM opportunities

 Identify e-SCM opportunities

Digital Business, Dr. Michael Bott, SoSe 2023

 Value chain opportunities

Deise et al. (1980), process view

Digital Business, Dr. Michael Bott, SoSe 2023

 Value chain opportunities

Digital Business, Dr. Michael Bott, SoSe 2023

 Network and structure opportunities

Digital Business, Dr. Michael Bott, SoSe 2023

 Key performance indicators (KPI) opportunities

distribution network) you may also start with agents

Digital Business, Dr. Michael Bott, SoSe 2023

 Geographical opportunities (continued)

Digital Business, Dr. Michael Bott, SoSe 2023

 Benefits of the ‘5 rights of purchasing’

Digital Business, Dr. Michael Bott, SoSe 2023

 SOSTAC Planning opportunities

Digital Business, Dr. Michael Bott, SoSe 2023

 SOSTAC Planning risks

Degree of risk increases

Source: Hughes et al., 1998

Digital Business, Dr. Michael Bott, SoSe 2023

 Opportunities in reducing ‘Waste’

Digital Business, Dr. Michael Bott, SoSe 2023

 Opportunities in reducing ‘Waste’

Digital Business, Dr. Michael Bott, SoSe 2023

 Opportunities in information flow and processing

Digital Business, Dr. Michael Bott, SoSe 2023

 Opportunities of particular digital business offerings

Digital Business, Dr. Michael Bott, SoSe 2023

 Opportunities of particular digital business offerings

Digital Business, Dr. Michael Bott, SoSe 2023

 Opportunities in Upstream – Operations – Downstream

• Downstream -> outbound logistics to fulfill orders

Digital Business, Dr. Michael Bott, SoSe 2023

 Opportunities in Information systems

Digital Business, Dr. Michael Bott, SoSe 2023

 Where can digitalization help in the procurement process?

Digital Business, Dr. Michael Bott, SoSe 2023

 Where can digitalization help in the supply-chain process?

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