|
Module SCM104: Internet Technologies and Supply Chain Management
|
|
|
| List Price: |
Duration: |
Word Count: |
Rating: |
Datasheet: |
| $60 | Approx.
1 hour | Approx.
10,800 words |  
(4.1 / 5) |  Download |
| Certificate: |
Counts toward Fundamentals of Supply Chain Management |
|
| Promotions: | Save $60 on "Fundamentals of Supply Chain Management" bundle; buy modules SCM102, SCM103, SCM104, SCM105, and SCM106 together and save $60 |
|
|
|
|
|
...Public exchanges, which exploded with popularity in the late 1990's, were designed to be open to anyone and provide the following benefits:
 | Automated procurement (sometimes called Automated Workflow) |
|
| | (avoid fax/phone/data errors; significantly lower transaction costs) |
|
| Collaboration in forecasting, planning and/or replenishment |
|
| | (complete visibility, no Bullwhip Effect) |
|
| More efficient market |
|
| | (more suppliers bidding for business, more buyers competing for components) |
|
| Sell unused capacity to new or different markets |
|
|
These benefits were intended to result in lower procurement costs, lower inventories, less Bullwhip Effect, and more profits among the companies winning additional business. Procurement costs would be lower because in a public exchange it might be possible to find some new supplier willing to compete heavily on price at any given moment. The Bullwhip Effect would be reduced if exchange partners collaborated in forecasting and planning based on inventory and sales information made available through the exchange. Inventories would be lower due to the reduction of the Bullwhip Effect, and also because materials might be easier to source with shorter lead times given a greater number of potential suppliers. Examples of public exchanges include Covisint for auto manufacturers and their suppliers, and Converge (formerly eHITEX) for electronic components.
Despite the hype, the huge numbers of public exchanges created by both third parties and major industry players have had difficulties gaining volumes...
...In many instances there may be a need to install a Decision Support System (DSS) to take full advantage of the possible improvements from the Internet. A Decision Support System is a software application that provides decision support (i.e., suggested actions) for a given management function. A DSS may be supported by optimization software designed for a particular task.
For example, for ease of management, many global businesses are organized by regions; common regions are North America, Europe, Asia/Far East, and Rest of World. Generally in the past there was little or no operational interaction among the different regions. Now, with Internet communication capabilities, companies with global operations can look for opportunities across different regions to create synergies. For example, a plant in one region may be short of a particular component, while a plant in another region of the world may have a surplus of the same component. In the past it was viewed as too inefficient to try to track down these kinds of opportunities, but with information flowing rapidly and automatically through a global network, such synergies become easier to find and exploit. However, the problem of exploiting them "optimally" is an optimization problem of large proportions, and hence some kind of Decision Support System (DSS) is needed to accomplish this.
|
| In the figure above, assume the Pennsylvania factory has run out of raw materials... |
|
...The idea of applications interacting with one another within the enterprise through a common set of protocols is often referred to as "Enterprise Application Integration" (EAI). The scope of EAI goes well beyond supply chain management, encompassing many other organizational areas in which enterprise-wide, real-time data is useful, including applications like Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and financial reporting and analysis. Applied across the chain to supply chain partners, this idea is often called B2B Integration. The practical impact of these emerging standards (or protocols, as they are usually called) is that once widely adopted, B2B Integration (the acquisition of data from one partner's Application A for use by their supply chain partner's Application B) would be much closer to plug-and-play than it is today. This would sharply reduce the IT cost of accomplishing such information-sharing or information-linking, and thus make information sharing across applications and indeed across company boundaries much more feasible.
How Web Services Would Work
If you wish to use a particular application, you would use UDDI to find it, literally using a SOAP message; once you find it, you would access the application's WSDL file (again, a document using XML and in SOAP format). The only manual coding required to link these items would be the initial generation of a SOAP request and the above-mentioned SOAP "wrapper" for your application. New applications may have SOAP built into their functionality in the future. The animation below illustrates how this might work:
|
|
|
