Technology and Supply
Chain Management
Authored by:
Dr. Huei Lee
Eastern Michigan University
Supply Chain Management
(SCM) Systems
SCM is the process of effectively
managing the components of an
extended value chain--from suppliers,
through manufacturing and distribution
chain, and to the consumers.
SCM information systems use
technology to more effectively manage
supply chains
I. What is SCM?
Why Supply Chain
Management?
1950-1980s Manufacturing
Parts
$5,000
50 years ago, U.S. is the only
country that can manufacture cars.
Labor
4000
Overhead
2000
You buy a car from GM, all the
money will go to the GM.
1980-2000s Supply Chain
Management
Today, foreign parts and labors are
much cheaper than that in US.
You buy a car from GM, only a
portion of money will go to the GM.
Management
Marketing
3000
Total Cost
$14,000
Value Chain Analysis
Benefits of Value Chain Analysis Disintermediation to the Consumer
Cost/
Sweater
Manufacturer
Manufacturer
Manufacturer
Distributor
Retailer
Retailer
Customer
$48.50
Customer
$40.34
Customer
$20.45
Service
The concept of Supply Chain
Management is also applied to
Service.
Business Process Management or
Business Process Reengineering
Stockless Inventory Compared to Traditional and
Just-in-time Supply Methods
Business Process
Reengineering
From an article published in Harvard
Business Review
Radical business redesign initiatives
that attempt to achieve dramatic
improvements in business processes
by questioning the assumptions, or
business rules of the company.
II. Information Systems for
SCM
Information Technology for
Supply Chain Management
Software Systems
Electronic Data Interchange (EDI)
Material Requirements Planning (MRP)
Manufacturing Resource Planning (MRP II)
Enterprise Resource Planning (ERP)
Supply Chain Management Systems (SCM)
Customer Relationship Management (CRM)
Internet-based Software
Network Infrastructure
Wide Area Network
Internet (for E-commerce: B2B, B2C)
III. ERP
Enterprise Resource
Planning (ERP) Systems
Enterprise resource planning (ERP) is
a term used to refer to a system that
links individual applications (for
example, accounting and
manufacturing applications) into a
single application that integrates the
data and business processes of the
entire business.
Origins of ERP Systems
ERP systems grew out of a function called
materials requirements planning (MRP) which
was used to allocate resources for a
manufacturing operation
MRP systems software ultimately became very
complex allowing for efficiencies of scale not
previously possible
Even more sophisticated MRP II systems began
to replace MRP systems in the 1980s
By the early 1990s, other enterprise activities
were being incorporated into ERP systems
Origins of ERP Systems
Today, an ERP system can
encompass, but is not limited to, the
following functions:
Sales and order entry
Raw materials, inventory, purchasing,
production scheduling, and shipping
Accounting
Human resources
Resource and production planning
Major ERP Systems
SAP R/3
Oracle
PeopleSoft (have been merged by
Oracle)
Toyota uses PeopleSoft and SAP
Microsoft Dynamics (formerly
Microsoft Business Solutions - Great
Plains)
E-Business and ERP
Systems
An e-business must keep track of and process a
tremendous amount of information
Businesses realized that much of the
information they needed to run an e-business
stock levels at various warehouses, cost of
parts, projected shipping dates could already
be found in their ERP system databases
A major part of the online efforts of many ebusinesses involved adding Web access to an
existing ERP system
E-Business and ERP
Systems
Many e-businesses want the same
things from their business
infrastructure
Thus, rather than custom build
applications, many companies prefer
to use prepackaged ERP system
software, which is often more efficient
and less expensive to implement
Cost of Implementing ERP
Systems
Most businesses need extensive help from
consultants to configure their ERP system
software around their existing business
practices, or to suggest changes in business
practices in order to better fit the ERP
system requirements
This process of mutual adaptation is called
systems integration
The consultants who supervise the
integration process are often referred to as
systems integrators
Outsourcing ERP Systems
One response to the challenge of
managing a complex ERP system is
to outsource it
Some businesses choose to
outsource not only the installation
but also the ERP system software
IV. Supply Chain Systems
Supply Chain Management
(SCM) Systems
A typical SCM system might
address the following issues:
Planning
Vendor selection
Manufacturing
Logistics
Customer relationship
Supply Chain Management
(SCM) Systems
Supply Chain Management
(SCM) Systems
With the advent of the Internet, e-businesses
began to demand different things from their
SCM systems
Most importantly, SCM systems vendors
(largely the same vendors that provide ERP
systems software) had to modify their
products to include a Web-based interface
The ultimate goal of a business ERP system
is complete optimization of internal business
processes
Supply Chain Management
(SCM) Systems
The two basic types of SCM system software are:
Supply Chain Planning software (SCP): uses
mathematical models to predict inventory levels
based on the efficient flow of resources into the
supply chain
Supply Chain Execution software (SCE): is
used to automate different steps in the supply
chain such as automatically sending purchase
orders to vendors when inventories reach
specified levels
Major Supply Chain
Planning (SCP) Players
i2 Technologies
i2s strength began with its powerful
Advanced Planning and Scheduling (APS)
Manugistics
Oracle
SAP
Advanced Planner and Optimizer (APO)
SAP Advanced Planner and
Optimizer (APO)
Levels of SAP
APO
Supply Network Design
(SND)
The Supply Chain Cockpit
(SCC)
Demand Planning (DP)
Supply Network Planning
(SND)
Collaborative Planning,
Forecasting, and
Replenishment (CPFR)
SAP R/3
Oracle Supply Chain
Planning
Oracle Supply Chain Planning is part of
the Oracle E-Business Suite's family of
Supply Chain Management solutions
It includes
Demand Planning
Collaborative Planning
Inventory Optimization
Manufacturing Scheduling, and
Global Order Promising
Customer Relationship
Management (CRM)
Systems
Customer relationship management
(CRM) systems, sometimes called eCRM systems, use technology to help an
e-business manage its customer base
CRM allows an e-business to match
customer needs with product plans and
offerings, remind customers of service
requirements, and determine what
products a customer has purchased
V. CRM
Salesforce.com
Muiti-channels CRM
Data Mining/Web
Mining/Business
Intelligence
Data mining is the process of using
mathematical techniques to look for
hidden patterns in groups of data,
thereby discovering previously unknown
relationships among the many pieces of
information stored in a database
A data warehouse is a database that
contains huge amounts of data, such as
customer and sales data
What does Data Mining
Do?
Explores
Your Data
Finds
Patterns
Query, Reporting,
Analysis
Performs
Predictio
ns
Data Mining
Why
What
How
Integrate
Data acquisition from
source systems and
integration
Data transformation
and synthesis
Analyze
Data enrichment,
with business logic,
hierarchical views
Data discovery via
data mining
Report
Data presentation
and distribution
Data access for
the masses
SQL Server 2005 Algorithms
Decision Trees
Sequence
Clustering
Clustering
Time Series
Association
Nave Bayes
Neural Net
Plus: Linear
and Logistic Regressio
Relationship among SCM,
ERP, CRM
SCM
ERP
Broader SCM
CRM
V. SAP R/3
References: available on request
PARTIAL SAP CLIENT LIST
Spacenet
BEFORE SAP R/3
Systems didnt talk to the extent processes
required, in spite of 20 years of IS labor
Human glue was required:
to fill-in where systems dont talk
to reconcile multiple views of data to arrive at
an answer
to monitor hold-points to ensure procedures
are followed amidst the disorganization of being
part paper and part automated
to bridge systems and paper processes
Primavera
Schedules
Artemis Project
Fund Accounting
DOE DISCAS
Fixed Assets
Off-site Vendor
Custody
batch file
Paper
Purchase
Paper
milestone
definitions
Paper
receivers
Requisition
Catalog
Inventory Control
System
Bar Coding
Purchasing
Pump/Motor Run
Time
General Ledger
Work Order
System
Paper
parts
order
batch file
Bench Stock
Control
Paper
Stock
level
decision
Paper
Contract
Logistics Support
Analysis
MRP Models
Engineering
Change Control
Log
Journal
Entry
Request
Paper
Paper
ECP
Paper
Invoices
Payroll
Personnel
Paper
Legend
Accounts Payable
Real Property
Legacy System
Training
batch file
batch file
Disbursements
Security
Centra EDM/PDM
Paper
checks
DOE FIMS
Primavera
Schedules
Artemis Project
Fund Accounting
DOE DISCAS
Fixed Assets
Paper
receivers
Off-site Vendor
Custody
batch file
Paper
Purchase
Requisition
Paper
milestone
defnitions
Catalog
Inventory Control
System
Bar Coding
Purchasing
General Ledger
Work Order
System
Pump/Motor Run
Time
Paper
parts
order
batch file
Bench Stock
Control
Paper
Stock
level
decision
Paper
Contract
Logistics Support
Analysis
MRP Models
Engineering
Change Control
Log
Journal
Entry
Request
Paper
Paper
Invoices
Paper
ECP
Payroll
Personnel
Paper
Records
Legend
Accounts Payable
Real Property
Legacy System
Training
batch file
batch file
Disbursements
Security
Centra EDM/PDM
Paper
checks
DOE FIMS
Human
Glue
PROCESS EFFICIENCY
Realized through ability to reduce
the personnel requirements to
perform the process
Transfer into processes that were
able to meet customer requirements
THE KEY ENABLER: ONE
SYSTEM
SD
MM
PP
Financial
Sales &
Distribution Accounting
Materials
Mgt.
Production
Planning
Quality
Mgt.
QM
SAP R/3
CO
Controlling
AM
Fixed
Assets
Mgt.
Human
Resources
HR
Workflow
Exec.
Information
& Report
Writer
WF
SAP R/3
Single Central
Database System
Project
Plant
Maintenance
PM
FI
PS
Omni-functional
Fully integrated
Process-oriented
Off-the-shelf
Some SAP Products
R/3
APO
Customer Relationship Management
(CRM)
Business process improvement (BPI)
Strategic Enterprise Management
(SEM)
Business Warehouse (BW)
VI. SCM/ERP for Small
Businesses Microsoft
Dynamics
Microsoft Dynamics
Screenshot
Microsoft Dynamics
Formerly Microsoft Business Solutions
Great Plains
With Microsoft Dynamics, you can bring supplychain functions online and make information
available for team collaborationwherever your
employees, vendors, partners and suppliers are.
Business portal functionality lets you provide
supply-chain functions, documents, and
information to people across the chain, both inside
and outside of the organization.
And you can use the same portal technology to let
your executives review and augment performance
when, where, and how they need to.
Why Microsoft Dynamics is
for small businesses?
Hardware considerations
Database requirements
VI. Information Technology
for for E-Business
TOOLS FOR WEB PAGE DEVELOPMENT &
SITE MAINTENANCE
Languages:
HTML
CGI (Common Gateway Interface)
CSS (Cascading Style Sheets)
Javascript
Java (Java Applet)
XML/XSL
Software:
Front Page
Microsoft Word
Macromedia Flash Player
http://www.macromedia.com/software/flash/
Macromedia Dreamweaver
V. Hardware
Considerations for SCM
systems
Intranet vs. Extranet
Intranet is to use Internet
technology and protocol (TCP/IP)
for the internal communications
Extranet is to use Internet
technology and protocol for the
internal and suppliers
communications
Network Infrastructure: Wide
Area Networks (WANs)
WAN Technologies
Ordinary telephone line and telephone modem.
Point-to-Point Leased lines (such as T1 line)
Public switched data network (PSDN)
Such as ATM, Frame Relay
Send your data over the Internet securely,
using Virtual Private Network (VPN) technology
PSDN
VPN
Global Considerations in
Using SCM/ERP Systems
Time differences
Language issues
Currency exchange rates
Tax
Different accounting systems
Internet and security restrictions
Culture and religion holidays
