Overview | Sample 1 | Sample 2 | Sample 3 | Sample 4 | Sample 5 | About the Author | ||||||
...Texas Instruments has recently implemented an extensive planning and supply/demand matching optimization tool using the Internet. Every two days they do a global supply/demand match for over 45,000 products produced in 56 factories worldwide. 70% of their customer orders are now online; they provide real-time order status information. Their system has factory-level planning optimization with global inventory visibility.
The results of this improvement are a two-week reduction in customer delivery times and an increase in factory utilization of 2%. A two-week reduction in customer delivery times is clearly beneficial from a competitive standpoint. Also, while the increase in factory utilization may sound small, the impact of such a change on profitability is much larger than 2% since one is earning additional revenue without any increase in corresponding production capacity costs. (This is a fair assumption because Texas Instruments' factories typically build to order, which means they are likely to sell what they produce.)
Placing their benefits in our framework:
Cost Reduction | Revenue Enhancement | Speed / Efficiency | |
Within an Enterprise | |||
Across the Chain | Globally optimal supply/demand balancing Increased factory utilization |
Lead time reduction | |
Across Multiple Chains |
We have not yet provided any examples of multiple-chain benefits. To offer one example, a Contract Manufacturer or EMS (Electronic Manufacturing Services provider) may need to purchase a standard component for multiple OEMs (Original Equipment Manufacturers - customers of the EMS)...
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Total Reading Time: Approx. 1 - 2 hours (for average readers)
Word Count: Approx. 10,800 words
Author: Dr. Warren H. Hausman
Professor of Management Science & Engineering, Stanford University
Certificate: Counts toward Fundamentals of Supply Chain Management
Datasheet: Download
Contents
- Getting Started
- Traditional vs. Net Model
- Framework for Internet Impact
- Example: Cisco
- Example: Dell
- Example: Adaptec
- Examples: Zara, Texas Instruments
- E-Business Relationships
- Spot Markets vs. Contracts
- Spot Market Simulation
- Requirements
- Web Services
- RosettaNet
- Future Supply Chains
- Conclusions
- Test Your Knowledge
- Feedback