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ü E-Business Is the conduct of business on the Internet, not only for buying and selling but also for servicing customers and collaborating with business partners. ü the use of Internet-based computing and communications to execute both front-end and back-end business processes ü The term was first used by IBM, when, in October, 1997.
ROLE OF IT IN SUPPLY CHAIN
• Has emerged as a key enabler to drive supply chain integration. • Businesses can use the Internet to gain global visibility across their extended network of trading partners and help them respond quickly to a range of variables, from customer demand to resource shortages.
SUPPLY CHAIN INTEGRATION
ücoordination among supply chain members
refers to the sharing of information among members of the supply chain.(demand data, inventory status, capacity plans, production schedules, promotion plans, and shipment schedules.
DIMENSIONS Information integration:
Planning synchronization: Planning
synchronization refers to the joint design and execution Synchronization of plans for product introduction, forecasting and replenishment.
Workflow coordination refers to streamlined and automated workflow activities between supply chain partners.
ü For example, procurement activities from a manufacturer to a supplier can be tightly coupled so that efficiencies in terms of accuracy, time, and cost, can be achieved.
vNew business models:
E-business allows partners redefine logistics flows so that the roles and responsibilities of members may change to improve overall supply chain efficiency.
ü A supply chain network may jointly create new products, pursue mass customization, and penetrate new markets and customer segments. New rules of the supply chain game can emerge as a result of integration fueled by the Internet.
BENEFITS OF SUPPLY CHAIN INTEGRATION
• reduced costs, • increased flexibility, • faster response times — more rapidly and effectively.
Electronic Information Integration
• To ensure that a supply chain is driven by true consumer demands, information sharing is critical
• Information distortion often arises
– when partners make use of local information to make demand forecasts and pass them to upstream partners – These distortions are amplified from one level to another in a supply chain
Customer Customers Retailers
Electronic Information Integration
• transparency of demand information • The Internet is an efficient electronic link between different entities
– Information Hub – Collaboration Profit
• The information hub is a node in the data network where multiple organizations interact in pursuit of supply chain integration
– Data Storage – Information Processing – Push/Pull publishing –
• companies that reported higher than average profits were the ones who were engaged in higher levels of information sharing. • •
New Business Models
Once companies begin to realize the promise of e-business enabled supply chain integration, they often discover entirely new ways of pursuing
ü Business objectives ü Developing strategies ü Business models that were neither apparent nor possible prior to the Internet.
• Multiple resources in a supply chain that once acted independently can now be tapped simultaneously to satisfy special needs • • All of which can be pooled to create a secondary market of “virtual resources”
• Examples include inventory stockpiles, untapped capacity, or even unmet demand
Supply Chain Restructuring
• With the advance of information technologies, companies can also restructure the logistics flows of their products to gain efficiencies
• Physical flows no longer have to follow information flows
• The Internet allows information flows to substitute for some of the inefficient physical flows
• The result: lower inventory, faster, more accurate order fulfillment, and reduced costs • • Example: CISCO
• The Internet enables many companies to use the Web to allow customers configure specific order options tailored to the tastes and preferences of the customers
• Examples: Computers (DELL) Bicycles (VOODO)
• RESULT: Better customer service by providing a highly cost effective level of customer service