SCM-- Some details

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SCM-- Some details

• ????????????
• ???
• Tel [phone]
• Fax[phone]
• mailto ckfarn_at_mgt.ncu.edu.tw
• http//www.mgt.ncu.edu.tw/ckfarn
• 2005

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Interactions among SC partners in the past

• Internal activities
• Sales forecasts, Product design, Inventory
  management, marketing, sales
• External activities
• Procurement

Supplier
Focal
Buyer
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Interactions among SC partners trends

• Increased external activities
• Low frequency activities
• Vendor selection, Collaborative product design
• High frequency activities
• Collaborative forecast, order processing,
  collaborative logistics

Supplier
Focal
Buyer
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The C word C-commerce

• Collaboration
• E.g. Pendulum swing in Taiwanese mass production
  business
• 1. OEM Original equipment Manufacturing
• brand-name buyer designed products
• 2. ODM Original design and Manufacturing
• Contract manufacturer designed products
• CDM Collaborative Design and Manufacturing
• Collaboration

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Example Procurement

• Inter-firm Activities
• Negotiation, order placing, delivery, goods
  received and verification, payment
• Collaboration tightly coupled activities
• Short AVL approved vendor list
• Product design collaborative engineering
• Forecast CPFR (Collaborative Planning,
  Forecasts and Replenishment)

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Challenges from the Market

• Problems facing the IT contract manufacturers in
  Taiwan
• Customer requirements
• 955 95 of all orders fulfilled within 5 days
• Actions VMI, resulting in higher inventory costs
• Requirements in 2001 983
• Requirements in 2003??

1002
982
Requirements in 2005??
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Traditional Production Model

• Traditional BTS Build to Stock
• Sales forecast ? production plan ? procurement ?
  production ? FG warehousing ? order taking ?
  delivery
• Slow movement of goods, capital tied up
• Traditional BTO Build to Order
• Customer order ? production scheduling ?
  procurement ? production ? delivery
• Long delivery cycle, lack of competitiveness

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Exploiting IT capabilities

• Speed
• Accessibility
• Visibility
• Opportunities
• Early involvement and early availability of
  information
• Postponement of decisions

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Current Production Models

• BTF/VMI Build to Forecast
• Customer rolling forecast ? procurement ?
  production scheduling ? production ? customer
  delivery notice ? delivery to VMI
• BTO
• Customer rolling forecast ? procurement ?
  customer order ? production scheduling ?
  production ? delivery
• CTO/ATO Configure to order, Assemble to order
• Customer rolling forecast ? procurement ?
  production scheduling ? production of components
  ? customer order ? final assembly ? delivery

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What are the differences?

• Customer ROLLING forecast
• What do you do with the forecast?

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Example A Shoe Manufacturer

• Shortened Cycle time

Order
Production
Procurement
In the Past
12weeks
10weeks
Current
Rolling Forecast
4weeks
6weeks
1213weeks
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Evolution of Collaboration

• QR Quick Response
• 1984, garment retailers
• Quick response to customer demand changes
• Information sharing of Point-of-sales data
• Effective in reducing lead time, inventory and
  obsolescence
• ECR Efficient Consumer Response
• 1992, retailers of general merchandise
• An extension of the QR concept
• Covering Suppliers and manufacturers
• VMI/SMI
• Vendor/Supplier Managed Inventory
• Change of ownership at buyer warehouse
• Eliminating the buyer side warehouse

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CPFR Collaborative Planning, Forecasting and
Replenishment

• Early 1990s Wal-Mart ? Warner-Lambert tried out
  CPAR
• Evolution into CPFR (trademark of VICS Voluntary
  Interindustry Commerce Standards Association)
• New generation of CPFR in 2004

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CPFR

• Supply Chain Visibility
• Collaboration
• Accurate forecast
• Lower inventory

Develop front-end agreement
Create joint business plan
Create sales forecast
Identify and resolve exceptions
Create order forecast
Identify and resolve exceptions
Order generation
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Business model B
Source www.cpfr.org
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Basic Concept Exception Handling

• Mutual long term commitment
• Change of business relationship
• From ad hoc, one shot to long term
• Collaborative Planning
• Joint business plan
• Collaborative Forecast
• Resolve exception
• Collaborative Replenishment
• Information sharing, visibility
• Resolve exception

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Accurate Forecast
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Differences at different stages
using point-of-sales data to rapidly update
forecasts for new products
sharing of planning information
automatic monitoring of sales, shared exception
alerts
Sales
using the suppliers forecast
Time
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The technical solutions

• B2Bi
• RosettaNet
• ebXML

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Fixed relationship B2B IOS

• Inter-organization Systems Alternatives
• Services provided by the Focal
• Integrated with in-house ERP
• Independent EC server (owned or ASP)
• Linking the Focal with suppliers
• Web-based
• Information Exchange
• Process integration
• Outsourcing?
• Technology?

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Focal(1)
back
ERP Server
EC Server
XML??
ERP
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Focal(2)
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Linking with Suppliers(1)
ERP/MIS
ERP
Browser
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B2Bi Process Integration
Supplier
Rosettanet/XML
Focal
ERP
XML
EC Server (Enterprise Ver.)
EC Server (Standard Ver.)
Internet
ERP
XML
RosettaNet PIPs
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Alternatives
AP1
ASP
B2B Server
ERP
AP2
SCM
Browser1
Portal
Browser2
In-house
Service Provider
Users
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Interchange of information

• Data
• Data files, coding
• Need Data interchange standards
• Message
• The information on a traditional document
  reflecting a single activity (e.g. order,
  confirmation, delivery)
• Need Message interchange standards
• Process
• The process involved in a single activity
• Process integration

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Data Interchange

• Paper documents, computer files, spreadsheets
• Paper, fax, magnetic media, network (e.g FTP)
• Normally by batch
• EDI
• Transaction data for a single transaction
• Traditionally run on proprietary networks
• International message standards UN/EDIFACT
• EOI- EDI over Internet
• HTML
• XML

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Markup Language

• Markup is a method of conveying metadata (that
  is, information about a dataset).
• Markup Language use string literals, or tags,
  to delimit and describe this data.
• Ease of reading, printing and exchange
• printer typesetting, proofreader, punctuation,
  ASCII, C, RTF
• SGML Standard Generalized ML

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Example HTML Document
ltHTMLgt ltH1 ALIGNCENTERgtHardwarelt/H1gt ltFONT FACE
size2gtNotebooklt/FONTgt ltFONT FACE
size2gtIBMlt/FONTgt ltFONT FACE size2gtSynnexlt/FONTgt
ltFONT FACE size2gtJohnlt/FONTgt
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Example XML Document
extended data tags
lt?xml version"1.0" encoding"Big5" ?gt lt????gt
lt??gt??????????,??? 2 ?lt/??gt lt??gt
lt??gt12478943lt/??gt lt??gtIBM 240lt/??gt
lt??gt58,455lt/??gt lt??? ??"http/www.ibm.com.t
w/product/nb/tp240"gtThinkPad 240lt/???gt
lt/??gt lt??gt lt??gt83424723lt/??gt lt??gtDell
A123lt/??gt lt??gt58,999lt/??gt lt???
??"http//www.dell.com.tw/product/nb/a123"gtNB
A123lt/???gt lt/??gt lt/????gt
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XML advantages

• Open, platform-independent
• Vocabulary Definitions of TAGS for different
  Application Domain
• An XML vocabulary is a description of XML data
  that is used as the medium for information
  exchange, often within a specific domain of human
  activity(business, chemistry, law, music, for
  example)
• Program Readable
• Note XML is not a programming language, nor an
  object-based system, nor an operating system. It
  is a powerful, elegant technique for thinking
  about, exchanging, and presenting data in a
  platform-independent manner.

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XML and Browser

• XML changes in internal structure of browsers
• HTML Interpreter ? XML Parser
• A normal Hypertext web-page becomes Application
  page
• Application Software ? Browser Software
• XML XML data can be processed by application
  systems, instead of a browser

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Client Side of Web-XML
Browser
URL
Application
Parser
Present-ation Module
Valid- ater
Document Handler
XML File
HTTP Server
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RosettaNet

• RosettaNet is a consortium of major Information
  Technology, Electronic Components and
  Semiconductor Manufacturing companies working to
  create and implement industry-wide, open
  e-business process standards.
• Cluster 0 RosettaNet Support
• Provides administrative functionality
• Cluster 1 Partner, Product and Service Review
• Allows information collection, maintenance and
  distribution for the development of
  trading-partner profiles and product-information
  subscriptions

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RosettaNet

• Cluster 2 Product Information
• Enables distribution and periodic update of
  product and detailed design information,
  including product change notices and product
  technical specifications
• Cluster 3 Order Management
• Lets partners order catalog products, create
  custom solutions, manage distribution and
  deliveries, and support product returns and
  financial transactions
• Cluster 4 Inventory Management
• Enables inventory management, including
  collaboration, replenishment, price protection,
  reporting and allocation of constrained product
  

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RosettaNet

• Cluster 5 Marketing Information Management
• Enables communication of marketing information,
  including campaign plans, lead information and
  design registration
• Cluster 6 Service and Support
• Provides post-sales technical support, service
  warranty and asset management capabilities
• Cluster 7 Manufacturing
• Enables the exchange of design, configuration,
  process, quality and other manufacturing floor
  information to support the "Virtual
  Manufacturing" environment

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RosettaNet PIP

• Partner Interface Process (PIP)
• message guidelines and XML DTD's (Document type
  definition).
• Understand what the PIP number represents.
• A PIP number has 3 parts  a number a letter
  another number.  Example 3A4
• The first number represents the Cluster.   PIP
  3A4 is in Cluster 3.
• The letter represents the Segment.  PIP 3A4 is in
  Segment A of Cluster 3.
• The second number is a sequential number which
  completes the PIP number.  PIP 3A4 is the 4th PIP
  in Segment A of Cluster 3.

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RosettaNet 3A4 PIP
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ebXML Mission
To provide an open XML-based infrastructure
enabling the global use of electronic business
information in an interoperable, secure, and
consistent manner by all parties.
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Individual Transaction Choreography
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ebXML Repository