CHAPTER10:EXTENDING THE ORGANIZATION- SUPPLY CHAIN MANAGEMENT

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   The supply chain has three main links:

1.       Materials flow from suppliers and their “upstream” suppliers at all levels

2.       Transformation of materials into semifinished and finished products through the organization’s own production process

3.       Distribution of products to customers and their “downstream” customers at all levels

•          Organizations must embrace technologies that can effectively manage supply chains

•          Plan

·         A company must have a plan for managing all the resources that go toward meeting customer demand for products or services.

•          Source

·         Companies must carefully choose reliable suppliers that will deliver goods and services required for making products.

·           Make

·         This is the step where companies manufacture their products or services. This can include scheduling the activities necessary for production, testing, packaging, and preparing for delivery.

·         Deliver (Logistic)

·         Companies must be able to receive orders from customers, fulfill the orders via a network of warehouses, pick transportation companies to deliver the products, and implement a billing and invoicing system to facilitate payments.

·      Return

·           This is typically the most problematic step in the supply chain. Companies must create a network for receiving defective and excess products and support customers who have problems with delivered products.

Information Technology’s  Role in the Supply Chain

VISIBILITY

•          Visibility – more visible models of different ways to do things in the supply chain have emerged.  High visibility in the supply chain is changing industries, as Wal-Mart demonstrated

•          Supply chain visibility – the ability to view all areas up and down the supply chain

•          Supply chain visibility allows organizations to eliminate the bullwhip effect

•          To explain the bullwhip effect to your students discuss a product that demand does not change, such as diapers.  The need for diapers is constant, it does not increase at Christmas or in the summer, diapers are in demand all year long.  The number of newborn babies determines diaper demand, and that number is constant.

•          Retailers order diapers from distributors when their inventory level falls below a certain level, they might order a few extra just to be safe

•          Distributors order diapers from manufacturers when their inventory level falls below a certain level, they might order a few extra just to be safe

•          Manufacturers order diapers from suppliers when their inventory level falls below a certain level, they might order a few extra just to be safe

•          Eventually the one or two extra boxes ordered from a few retailers becomes several thousand boxes for the manufacturer.  This is the bullwhip effect, a small ripple at one end makes a large wave at the other end of the whip.

Consumer Behavior

•          Companies can respond faster and more effectively to consumer demands through supply chain enhances

•          Once an organization understands customer demand and its effect on the supply chain it can begin to estimate the impact that its supply chain will have on its customers and ultimately the organizations performance

•          Demand planning software – generates demand forecasts using statistical tools and forecasting techniques

Competition

•          Supply chain planning (SCP) software– uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain

•          Supply chain execution (SCE) software – automates the different steps and stages of the supply chain

•          SCP and SCE both increase a company’s ability to compete

•          SCP depends entirely on information for its accuracy

•          SCE can be as simple as electronically routing orders from a manufacturer to a supplier

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CHAPTER 15:OUTSOURCING IN THE 21ST CENTURY

•          Insourcing (in-house-development) – a common approach using the professional expertise within an organization to develop and maintain the organization's information technology systems

•          Outsourcing – an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-house

•          The reason why company outsource

•          Onshore outsourcing – engaging another company within the same country for services

•          Nearshore outsourcing – contracting an outsourcing arrangement with a company in a nearby country

•          Offshore outsourcing – using organizations from developing countries to write code and develop systems

•          Factors driving outsourcing growth include:

•          Core competencies

•          Many companies have recently begun to consider outsourcing as a means to fuel revenue growth rather than just a cost-cutting measure.

•          Financial savings

•          It is typically cheaper to hire workers in China and India than similar workers in the United States.

•          Rapid growth

•          an organization is able to acquire best-practices process expertise. This facilitates the design, building, training, and deployment of business processes or functions.

•          Industry changes

•          High levels of reorganization across industries have increased demand for outsourcing to better focus on core competencies.

•          The Internet

•          The pervasive nature of the Internet as an effective sales channel has allowed clients to become more comfortable with outsourcing.

•          Globalization

•          As markets open worldwide, competition heats up. Companies may engage outsourcing service providers to deliver international services

•          According to PricewaterhouseCoopers “Businesses that outsource are growing faster, larger, and more profitable than those that do not”

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CHAPTER 14:CREATING COLLABORATIVE PARTNERSHIPS

Teams, Partnerships, and Alliances

•          Organizations create and use teams, partnerships, and alliances to:

–      Undertake new initiatives

–      Address both minor and major problems

–      Capitalize on significant opportunities

–      Organizations create teams, partnerships, and alliances both internally with employees and externally with other organizations

•          Collaboration system – supports the work of teams by facilitating the sharing and flow of information 

•          Organizations form alliances and partnerships with other organizations based on their core competency

–      Core competency – an organization’s key strength, a business function that it does better than any of its competitors

–      Core competency strategy – organization chooses to focus specifically on its core competency and forms partnerships with other organizations to handle nonstrategic business processes

•          Information technology can make a business partnership easier to establish and manage

–      Information partnership – occurs when two or more organizations cooperate by integrating their IT systems, thereby providing customers with the best of what each can offer

–      The Internet has dramatically increased the ease and availability for IT-enabled organizational alliances and partnerships

•          Collaboration solves specific business tasks such as telecommuting, online meetings, deploying applications, and remote project and sales management

•          Collaboration system – an

IT-based set of tools that supports the work of teams by facilitating the sharing and flow of information

•          Two categories of collaboration

1.       Unstructured collaboration (information collaboration) - includes document exchange, shared whiteboards, discussion forums, and e-mail

2.       Structured collaboration (process collaboration) - involves shared participation in business processes such as workflow in which knowledge is hardcoded as rules

•          Collaboration systems include:

1.       Knowledge management systems

2.       Content management systems

3.       Workflow management systems

4.       Groupware systems

KNOWLEDGE MANAGEMENT SYSTEM

•          Knowledge management (KM) – involves capturing, classifying, evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions

•          Knowledge management system – supports the capturing and use of an organization’s “know-how”

Explicit and Tacit Knowledge

•          Intellectual and knowledge-based assets fall into two categories

1.       Explicit knowledge – consists of anything that can be documented, archived, and codified, often with the help of IT

2.       Tacit knowledge - knowledge contained in people’s heads

•          The following are two best practices for transferring or recreating tacit knowledge

1.       Shadowing – less experienced staff observe more experienced staff to learn how their more experienced counterparts approach their work

2.       Joint problem solving – a novice and expert work together on a project

KNOWLEDGE MANAGEMENT TECHNOLOGIES

•          Knowledge management systems include:

–      Knowledge repositories (databases)

–      Expertise tools

–      E-learning applications

–      Discussion and chat technologies

–      Search and data mining tools

•          Finding out how information flows through an organization

KNOWLEDGE MANAGEMENT AND SOCIAL SYSTEM

–      Social networking analysis (SNA) – a process of mapping a group’s contacts (whether personal or professional) to identify who knows whom and who works with whom

–      SNA provides a clear picture of how employees and divisions work together and can help identify key experts

CONTENT MANAGEMENT

•          Content management system (CMS) – provides tools to manage the creation, storage, editing, and publication of information in a collaborative environment

CMS marketplace includes:

–      Document management system (DMS)

–      Digital asset management system (DAM)

–      Web content management system (WCM)

DOCUMENT  MANAGEMENT SYSTEM

Supports the electronic capturing, storage, distribution, archival,  and accessing of documents

WEB CONTENT MANAGEMENT

•          Adds an additional layer to document and digital asset management that enables publishing content both to intranets and to public Web sites

WORKING WIKI'S

•          Wikis - Web-based tools that make it easy for users to add, remove, and change online content

•          Business wikis - collaborative Web pages that allow users to edit documents, share ideas, or monitor the status of a project

WORKFLOW MANAGEMENT SYSTEM

•          Work activities can be performed in series or in parallel that involves people and automated computer systems

•          Workflow – defines all the steps or business rules, from beginning to end, required for a business process

•          Workflow management system – facilitates the automation and management of business processes and controls the movement of work through the business process

•          Messaging-based workflow system – sends work assignments through an e-mail system

•          Database-based workflow system – stores documents in a central location and automatically asks the team members to access the document when it is their turn to edit the document

GROUPWARE TECHNOLOGIES

•          Groupware – software that supports team interaction and dynamics including calendaring, scheduling, and videoconferencing

•          Videoconference - a set of interactive telecommunication technologies that allow two or more locations to interact via two-way video and audio transmissions simultaneously.

•          Web conferencing - blends audio, video, and document-sharing technologies to create virtual meeting rooms where people “gather” at a password-protected Web site.

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