Strategic Information Technology in the Global Supply Chain

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Strategic Information Technology in the Global
Supply Chain

• Dr. Dale S. Rogers
• Center for Logistics Management
• University of Nevada
• Brasil CSCMP Roundtable
• Rio de Janeiro
• 6 December 2005

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2006 University of Nevada-COPPEAD courses
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Kawaita zokin wo shiboru

• Wringing drops from a dry towel
• Processes must continually be refined.
• Efficient, effective, efficient, effective

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2005 Issues

• Price of fuel
• Addition of large post-Panamax vessels
• Southern California port congestion
• End of import quotas for some countries and
  additions for others
• Sarbanes-Oxley

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Key Takeaways

• Frameworks for identifying the business value and
  strategic impact of information systems
• How new entrants into the information technology
  marketplace such as Google may revolutionize how
  logistics and supply chain management is
  executed.
• Best practices and business models that leverage
  Internet, wireless, and networking technologies
  to impact the supply chain.

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Complexity Consolidation
Focal Firm
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Grocery Consolidation
Mfg
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End of the Beginning

• We are much closer to the end of the beginning
  than the beginning of the end.
• Source Thomas Friedman, (2004) The World is Flat

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The Network is the Computer

• Movement away from traditional software
• Transparent ASPs
• Focus on Middleware
• The Network is the Computer

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Rules of Thumb

• Total company IT costs should equal approximately
  1 of total revenue
• Supply chain IT costs should consist of 15-20 of
  total IT budget

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Supply Chain Excellence

• Consider the following 
• PG (No. 2) acquired Gillette in 2005.
• JJ (No. 6) acquired Guidant in 2005.
• Wal-Marts (No. 8) U.S. market share grew from
  6.8 in 1992 to 17.1 in 2004.
• Dells (No. 1) PC market share has grown from
  2.7 to 18.9 since 1995.
• Nikes (No. 21) shoe sales has grown at a 10.1
  Compound Annual Growth Rate (CAGR) since 1995.

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SCM Information Technology
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Hardware vs. Software
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Source Erik Brynjolfsson, MIT E-Commerce Center
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Oracle SAP Revenues
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SAP.DE Oracle Stock Prices
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7 Attributes of Successful IT Productivity

• Moving from analog to digital business processes
• Fostering open information access
• Establishing a distributed decision-making
  process
• Linking incentives to performance
• Maintaining focus communicating corporate goals
• Hiring the best people
• Investing in human capital
• Source Erik Brynjolfsson, MIT E-Commerce Center

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I2 Technologies Stock Price
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Manugistics Stock Price
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I2 vs. Manugistics
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I2 Manugistics Sales Volumes
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Warehouse Management SystemWhat do I need it for?

• WMSs optimize space, labor, and equipment.
• Some companies might get away fine with just
  using the ERPs, but if that part of the business
  is very important, then you might want to use a
  best-of-breed system as shown on the next slide.
• Very extensive changes to processes are very
  likely. It is best advised in most cases to
  implement the system vanilla because this helps
  keep the costs down and make for easy integration
  with other systems.

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Warehouse Management SystemRisk Assessment
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Warehouse Management SystemRisk Assessment
(cont.)
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Manhattan Associates
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WMS
ERPs
Red Prairie
Manhattan
Mark
Exe
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Manhattan Associates
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Manhattan Associates