Introduction to Supply Chain Management Technologies

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1 Introduction to Supply Chain Management Technologies Second Edition David Frederick Ross CRC Press Taylor & Francis Croup Boca Raton London New York CRC Press is an imprint of the Taylor & Francis Croup, an informa business

2 Contents Preface Acknowledgments Author xiii xix xxi 1 Supply Chain Management: Architecting the Supply Chain for Competitive Advantage 1 The Foundations of Supply Chain Management 2 The Rise of Supply Chain Management ". 5 Historical Beginnings 5 Stages of SCM Development 6 Defining Supply Chain Management 11 Defining Logistics Management 12 Defining Supply Chain Management 13 Redefining Supply Chain Management 17 A New SCM Definition 17 Redefining Supply Chain Components 17 Channel Configuration 20 Supply Chain Competencies 23 Customer Management 23 Supplier Management 25 Channel Alignment 26 Supply Chain Collaboration 27 Operations Excellence 29 Integrative Technologies 30 The Impact of SCM 31 Summary and Transition 31 Notes : 33

3 vi Contents 2 Supply Chain Technology Foundations: Exploring the Basics 35 The Importance of Information Technology 37 Basics of Information Technology 37 Using Technology to Automate Knowledge 38 Using Technology to Create Knowledge 39 Using Technology to Integrate and Network Knowledge 40 Defining Integrative Information Technology 41 Enterprise Information Technology Basics 41 Enterprise Technology Architecture 42 Enterprise Business Architecture 45 Inter-Enterprise Business Architecture 49 New Technologies 53 New Generation of Technology Enablers 53 Software-as-a-Service (SaaS) 55 Wireless Technology 58 Global Trade Management Solutions 61 Summary and Transition 62 Notes 63 3 Supply Chain System Foundations: Understanding Today's Technology Solutions 65 Business Information System Basics 66 The Five Basic Functions of Information Systems...67 Principles of System Management 69 Enterprise Business Systems Foundations 70 Evolution of Enterprise Business Systems (EBS) 71 EBS System Components 72 Core Functional Areas of Operation 72 Secondary Functional Areas of Operation 76 EBS Networking and Integration Frameworks 80 Standard EBS Systems 83 Enterprise Resource Planning (ERP) 83 EBS Architecture for SCM 87 EBS Benefits and Risks 89 EBS Choices 90 Advent of Internet Business Technologies 92 Defining Internet Business 94 Evolution of Internet Business 95 I-Marketing 97 e-commerce Storefront 98 e-business Marketplaces 100 e-collaboration Marketplaces 104 Today's e-business Marketplaces Summary 108

4 Contents vii Impact of e-business on the Supply Chain 109 Customer Service-Driven Elements 110 Supply Chain Operations-Driven Elements 110 Summary and Transition 112 Notes Technology-Driven Supply Chain Evolution: Building Lean, Adaptive, Demand-Driven Supply Networks 117 The Lean Supply Chain 119 Anatomy of Lean Principles 119 Defining Lean SCM 121 Six Components of Lean Supply Chains 123 Lean Improvement Tools 124 Process Standardization 124 Lean SCM Technologies 125 Cross-Enterprise Collaboration 126 Lean SCM Implementation 128 Demand Management 130 The Impact of Lean SCM 131 Adaptive Supply Chains 133 Understanding Supply Chain Risk 133 Advent of the Adaptive Supply Chain 136 Components of Adaptive Supply Chain Management 138 Advantages of Adaptive Supply Chain Management 141 Demand-Driven Supply Networks 141 Defining Demand-Driven Supply Networks 142 Competencies of a DDSN 145 Demand-Driven 145 Demand/Supply Visibility 147 Adaptive Channel Management 149 Lean Optimization 150 Supply Chain Collaboration 151 Fulfillment/Replenishment Flexibility 152 Advantages of Demand-Driven Supply Networks 155 Summary and Transition 155 Notes Customer and Service Management: Utilizing CRM to Drive Value to the Customer 159 Creating the Customer-Centric Supply Chain 160 The Advent of Customer Relationship Management (CRM) 161 Mapping the Cluster of CRM Components 163 Understanding Today's Customer Dynamics 166 Creating the Customer-Centric Organization 169

5 viii Contents Applying Technology to CRM 172 CRM and Internet Sales 174 Sales Force Automation (SFA) 176 e-crm Marketing 178 Customer Service Management (CSM) 181 CRM and the Supply Chain 185 Partner Relationship Management (PRM) 185 Electronic Bill Presentment and Payment (EBPP) 188 CRM Analytics 189 Implementing CRM 190 New Concepts in Customer Management Technologies 193 Emergence of Customer Experience Management 193 Merging CRM and CEM 196 Redefining CRM Technologies to Embrace CEM 197 The Advent of Social Networking 198 Defining the Content of Social Networking Technologies 200 Summary and Transition 202 Notes 204 Manufacturing and Supply Chain Planning: Linking Product Design, Manufacturing, and Planning to Increase Productivities 207 Manufacturing in the Age of the Global Enterprise 209 Demand-Driven Manufacturing 211 Challenges to the Manufacturing Infrastructure 212 Outsourcing and Supplier Partnerships 214 Changing Performance Targets 216. The Future of Manufacturing 217 Impact of Technology on Manufacturing 218 Short History of Manufacturing Planning and Control Systems Geography of Today's Manufacturing Systems 222 Manufacturing Planning 222 Production and Process Management 224 Product Design and Engineering 224 Plant Maintenance and Quality Management 225 Product Life Cycle Management (PLM) 226 Impact of Internet Networking Technologies 228 Collaborative Product Commerce 231 Defining CPC 231 Linking Supply Chain Design Capabilities 233 Detailing the Contents of CPC 234 Managing Manufacturing Planning Functions 236 Advanced Production and Scheduling Systems 238

6 Contents ix Accurate Data 238 Planning Timeframe 239 Planning Model 239 Schedule Management 240 Supply Chain Optimization Tools 241 Collaborative Planning, Forecasting, and Replenishment (CPFR) 244 Summary and Transition 247 Notes -.: Supplier Relationship Management: Integrating Suppliers into the Value Chain 251 Defining Purchasing and Supplier Relationship Management (SRM) Defining the Purchasing Function 253 Defining SRM 255 Components of SRM 258 Strategic Sourcing and Supply Chain Management 259 Applying Technology to the Management of SRM 260 SRM-Driven Infrastructures and Operations 261 The Internet-Driven SRM Environment e-srm Structural Overview 263 EBS Backbone Functions 265 e-srm Services Functions 266 e-srm Processing 268 e-srm Technology Services 272 Anatomy of the e-srm Marketplace Exchange Environment 274 Emergence of Today's B2B Marketplace 275 Foundations 276 Rise of Collaborative Commerce 276 Development of Networked Exchanges 276 Defining the Trading Exchange 277 Future of B2B e-marketplaces 280 Implementing e-srm 282 e-srm Value Discovery 283 Infrastructure Analysis 283 Preparing for Organizational Change 284 Spend Analysis 284 Item/Service Analysis 284 e-srm Technology Choices 285 Performance Measurement 286 Summary and Transition 287 Notes 289

7 Contents 8 Logistics Resource Management: Utilizing Technology to Enhance Logistics Competitive Advantage 293 Defining Logistics Resource Management (LRM) 294 Logistics Performance Management 297 Fulfillment Planning and Execution 299 Logistics Partnership Management 301 Shipment Visibility 302 Fulfillment Event Management 303 Dealing with Logistics Uncertainties 305 Defining LRM in the Age of the Global Internet 306 Applying Internet Technologies to LRM 307 Internet-Enabled LRM Technologies 311 Enterprise Performance Measurement 311 Warehouse Management 312 Transportation Management 315 Understanding the Third Party Logistics Network 318 Role of the 3PL 319 Internet-Driven LSPs 321 Today's LSP Marketplace Challenges 323 Choosing and Implementing an LSP Solution 325 LSP Business Models 326 Steps in LRM Strategy Development 328 Summary and Transition 330 Notes Developing SCM Technology Strategies: Creating the Game Plan for the Successful Implementation of SCM Technologies 335 Changing Views of Enterprise Strategy 336 Overview 338 The Primacy of Value Chains 339 Barriers to Internet-Driven SCM Technologies 342 Preliminary Steps in SCM Technology Deployment Strategy 346 Opening Issues in SCM Technology Strategy Development 347 Preliminary Steps 348 Developing the SCM Technology Strategy 356 Constructing the Business Value Proposition 357 Defining the Value Portfolio 358 Structuring the Scope of Collaboration 360 Ensuring Effective Resource Management 366 Pursuing Growth Management 369 Focus on Supply Chain Costs 369 Focus on Supply Chain Value 371 Design an Effective Performance Measurements Program 373

8 Contents xi Summary 379 Notes 381 Afterword 383 Notes 386 Index 387

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