Impact of Ecommerce on

Global Manufacturing
Dr Hamid Jahankhani
School of Computing and Technology
 Overview
 The aim of this presentation initially is to review
e-manufacturing and to explain the needs of
business strategies for complete integration of all
business elements by referring to a global
manufacturing company, BMW’s MINI case study.
 This presentation then refers to the strategic
decision making that any Small and Medium size
Enterprises (SME) should make to adopt a
technology platform for a new project. The
reference is made to an on ongoing development
to provide an integrated business information and
e-commerce system for a manufacturing
company.
 Introduction
 Brief history of electronic commerce
 E-commerce and Internet technologies have enabled
companies to shift their manufacturing operations from
the traditional factory integration philosophy to a supply
chain-based e-factory philosophy
 Ecommerce has transformed companies from a local
factory focus to a global enterprise and business focus
and changing the nature of manufacturing
 E-manufacturing is a system methodology that enables
the manufacturing operations to successfully integrate
with the functional objectives of an enterprise through the
use of the Internet and wireless technologies
 Distributed Multiple Product
Development Projects (DMPDPs)
 The distributed, collaborative, and adaptive planning and
control approach for DMPDPs, is a representative project
environment in a modern e-enterprises
 Consider a car manufacturing company having four
technical centres in four countries. Every technical centre
has multiple functional divisions internally and the
functionality of each technical centre is not mutually
exclusive among the four technical centres. On the basis of
the company's platform line-up, four basic car programs
are being carried out simultaneously (projects a, b, c and
d). Each car platform has major-change projects once
every 4 years and minor-change projects in between,
meaning that a new project starts every 6 months.
 Distributed Multiple Product
Development Projects (DMPDPs)
(Source Lee Y. and Kumara S. R. T., 2003)
 E-manufacturing
 These days’ large-scale distributed projects are very common
to see.
 High marketplace competition has forced the modern
enterprises to compress their product development lead-time
 Projects have also become ever distributed due to economic
reasons
 under these conditions traditional project management
techniques cannot provide the required functionality to react
effectively to the changes and to support collaborative project
management processes in distributed project environments
 The e-manufacturing concept is developed to meet the
requirements for the complete integration of all business
processes and systems such as e-procurement, Supply Chain
Management (SCM), Customer Relations Management (CRM),
and Enterprise Resource Planning (ERP).
 MINI (BMW) case
 The BMW production history dates back to 1923. The era
of globalisation begins in 1992 at Spartanburg, South
Carolina, where BMW setup its first complete
manufacturing plant outside Germany
 The strategy behind the scene was “the production
follows the market”
 Though plans, BMW have projected a production level of
50,000 vehicles per year in the initial stages, 2002
production exceeded 120,000 cars
 The BMW groups use ecommerce strategies to use
effective business explore the market.
 The BMW Group sees ecommerce as both a challenge and
an opportunity for the entire Company
 The strategic significance of Ecommerce lies in the greater
process orientation and networking of current structures
and processes, with a clear focus on the customer.
 MINI (BMW) case
 The primary focus is not on cost reduction, but rather on
benefits, flexibility and quality and customer satisfaction
 The vehicles of the MINI brand have allowed the BMW
Group to broaden its product range
 The marketing strategy carried out by BMW, to
identifying customer groups (Target Markets) and
tailoring its product offerings, prices, distribution,
promotional efforts and services towards that particular
market segment
 Through continuous process optimisation, the product
has been developed through to the series of stages in
only 30 months
 The BMW Groups production network is characterised by
agility, the ability to respond quickly and flexibly within a
changing framework
 MINI (BMW) case
 The BMW group introduced an online ordering system in
1998 which gives dealers the option of showing
customers their desired car on the screen and confirming
the delivery date on the spot
 The time frame when the vehicle can be built with the
desired fitting is fixed in few seconds and the place in the
production process is immediately reserved and the
manufacturing logistic department informed
 There are more then 10³² variant which is more than
billion with the product range of BMW group
 The BMW group has optimised internal processes to such
a level that changes according to the customer wishes
regarding engine capacity, colour upholstery can be
accommodated up to ten working days before the start of
the production without effecting the delivery date.
 MINI (BMW) case
 The Assembly takes place on location with according
to the BMW global quality standards.
 Currently, the BMW Group production network is
made up of 15 plants and 8 assembly facilities
worldwide. Particular abilities of the network are the
common supply of systems and components as well
as a high standard of productivity and agility.
 Therefore, BMW, utilises the internet as an integral
tool for developing superior customer relations,
through providing an environment inclusive, both to
existing and potential customers, through
expressing views and providing feedback on product
development
Remapping manufacturing with .
NET Technologies
 In June 2000, Microsoft announced its .NET initiative, a
broad new vision for embracing the Internet and the Web
in the development, engineering and use of software
 One key aspect of the .NET strategy is its independence
from a specific language or platform.
 .NET enables Web-based applications to be distributed to
consumer electronic devices, such as mobile phones,
Handheld PC’s and persona1 digital organizers, as well as
to desktop computers
 .NET is also a set of standards, and an operating platform,
to enable different applications and organisations to
communicate over the Internet, using industry-agreed
protocols such as Simple Object Access Protocol (SOAP).
 Integrating ERP with External
Applications
 The local manufacturing company use Syspro
solution for its ERP system
 Like most small-medium size enterprises (SMEs),
this company’s IT infrastructure is based on
Microsoft technology and most (if not all) of the
software used by the company is either
Microsoft software or other Windows-based
software
 Being a small company with a Microsoft-centric
IT infrastructure, this organisation fits the profile
of a typical .NET adopter
 Conclusions
 Those companies which have decided to take a lead have
taken an evolutionary approach towards e-commerce
adoption.
 Ecommerce has transformed companies from a local factory
focus to a global enterprise and business focus and
changing the nature of manufacturing
 Every SME goes through the strategic decision making
when they adopt a technology platform for a new project.
The decision making becomes more difficult when
attempting to integrate business information and e-
commerce system through an ERP system.
 Consumers of ERP systems are demanding solutions that
can be easily integrated with Web applications in order to
provide such services as e-commerce to customers and
browser-based access to remote workers.