SCM Slideshow

8/14/2019 SCM Slideshow

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Chapter 1 InformationTechnology and Supply

Chain Management

SCM 614Dr. Huei Lee

Eastern Michigan University

Copyright 2003-2007, Huei Lee


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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 usetechnology to more effectively managesupply chains


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I. What is SCM?


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Why Supply Chain

Management?Parts $5,000

Labor 4000

Overhead 2000

Management

Marketing 3000

Total Cost $14,000

1950-1980s Manufacturing

50 years ago, U.S. is the onlycountry that can manufacture cars.

You buy a car from GM, all themoney will go to the GM.

1980-2000s Supply ChainManagement

Today, foreign parts and labors aremuch cheaper than that in US.

You buy a car from GM, only aportion of money will go to the GM.


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Value Chain Analysis


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Benefits of Value Chain Analysis -

Disintermediation to the Consumer

Manufacturer

Manufacturer

Manufacturer

Distributor Retailer

Retailer

Customer

Customer

Customer

Cost/

Sweater

$48.50

$40.34

$20.45


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ServiceThe concept of Supply Chain

Management is also applied to

Service. Business Process Management or

Business Process Reengineering


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Stockless Inventory Compared to Traditional andJust-in-time Supply Methods


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Business Process

Reengineering From an article published in Harvard

Business Review

Radical business redesign initiativesthat attempt to achieve dramaticimprovements in business processesby questioning the assumptions, or

business rules of the company.


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II. Information Systems forSCM


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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)


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III. ERP


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Enterprise Resource

Planning (ERP) Systems Enterprise resource planning (ERP) is

a term used to refer to a system that

links individual applications (forexample, accounting andmanufacturing applications) into asingle application that integrates the

data and business processes of theentire business.


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Origins of ERP Systems ERP systems grew out of a function calledmaterials requirements planning (MRP) whichwas used to allocate resources for a

manufacturing operation MRP systems software ultimately became very

complex allowing for efficiencies of scale notpreviously possible

Even more sophisticated MRP II systems beganto replace MRP systems in the 1980s

By the early 1990s, other enterprise activitieswere being incorporated into ERP systems


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Origins of ERP SystemsToday, an ERP system can encompass,but is not limited to, the followingfunctions: Sales and order entry Raw materials, inventory, purchasing,

production scheduling, and shipping

Accounting

Human resources Resource and production planning


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Major ERP Systems

SAP R/3

Oracle

PeopleSoft (have been merged byOracle)Toyota uses PeopleSoft and SAP

Microsoft Dynamics (formerlyMicrosoft Business Solutions - GreatPlains)


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E-Business and ERPSystems

An e-business must keep track of and process atremendous amount of information

Businesses realized that much of the informationthey needed to run an e-business stock levelsat various warehouses, cost of parts, projectedshipping dates could already be found in theirERP system databases

A major part of the online efforts of many e-businesses involved adding Web access to anexisting ERP system


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E-Business and ERPSystems

Many e-businesses want the samethings from their business

infrastructureThus, rather than custom build

applications, many companies preferto use prepackaged ERP system

software, which is often more efficientand less expensive to implement


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Cost of Implementing ERPSystems

Most businesses need extensive help fromconsultants to configure their ERP systemsoftware around their existing business

practices, or to suggest changes in businesspractices in order to better fit the ERPsystem requirements

This process of mutual adaptation is called

systems integration The consultants who supervise the

integration process are often referred to assystems integrators


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Outsourcing ERP Systems

One response to the challenge ofmanaging a complex ERP system is

to outsource it Some businesses choose to

outsource not only the installation

but also the ERP system software


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IV. Supply Chain Systems


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Supply Chain Management(SCM) Systems

With the advent of the Internet, e-businessesbegan to demand different things from theirSCM systems

Most importantly, SCM systems vendors(largely the same vendors that provide ERPsystems software) had to modify theirproducts to include a Web-based interface

The ultimate goal of a business ERP systemis complete optimization of internal businessprocesses


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Supply Chain Management(SCM) Systems

The two basic types of SCM system software are:

Supply Chain Planning software (SCP): usesmathematical models to predict inventory levelsbased on the efficient flow of resources into thesupply chain

Supply Chain Execution software (SCE): isused to automate different steps in the supply

chain such as automatically sending purchaseorders to vendors when inventories reachspecified levels


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Major Supply ChainPlanning (SCP) Players

i2 Technologies i2s strength began with its powerful

Advanced Planning and Scheduling (APS) Manugistics

Oracle

SAP Advanced Planner and Optimizer (APO)


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SAP Advanced Planner andOptimizer (APO)


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Oracle Supply ChainPlanning

Oracle Supply Chain Planning is part ofthe 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


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Management (CRM)Systems

Customer relationship management(CRM) systems, sometimes called e-

CRM systems, use technology to help ane-business manage its customer base

CRM allows an e-business to matchcustomer needs with product plans and

offerings, remind customers of servicerequirements, and determine whatproducts a customer has purchased


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V. CRM


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Salesforce.com


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Muiti-channels CRM


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Mining/BusinessIntelligence

Data mining is the process of usingmathematical techniques to look for hiddenpatterns in groups of data, thereby discovering

previously unknown relationships among themany pieces of information stored in a database

A data warehouse is a database that containshuge amounts of data, such as customer and

sales data


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What does Data MiningDo?

ExploresExploresYour DataYour Data

FindsFindsPatternsPatterns

PerformsPerformsPredictioPredictio

nsns

Query, Reporting,Analysis

Data Mining

Why

HowWhat


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Data acquisition fromData acquisition fromsource systems andsource systems andintegrationintegration

Data transformationData transformationand synthesisand synthesis

Data enrichment,Data enrichment,with business logic,with business logic,hierarchical viewshierarchical views

Data discovery viaData discovery viadata miningdata mining

Data presentationData presentationand distributionand distribution

Data access forData access forthe massesthe masses

IntegrateIntegrate AnalyzeAnalyze ReportReport


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SQL Server 2005 Algorithms

Decision TreesDecision Trees ClusteringClustering Time SeriesTime Series

SequenceSequenceClusteringClustering

AssociationAssociation Nave BayesNave Bayes

Neural NetNeural NetPlus: Linearand Logistic Regressio


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Relationship among SCM,ERP, CRM

SCM ERP CRM

Broader SCM


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V. SAP R/3

References: available on request


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PARTIAL SAP CLIENT LIST

Spacenet


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BEFORE SAP R/3

Systems didnt talk to the extent processesrequired, in spite of 20 years of IS laborHuman glue was required:

to fill-in where systems dont talk to reconcile multiple views of data to arrive at ananswer

to monitor hold-points to ensure procedures arefollowed amidst the disorganization of being part

paper and part automated to bridge systems and paper processes

Primavera


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Pump/Motor Run

Time

Work Order

System

Catalog

Accounts Payable

Disbursements

Real Property

DOE FIMS

DOE DISCAS

Purchasing

General Ledger

Bench Stock

Control

Bar Coding

Fixed Assets

Inventory Control

System

Off-site Vendor

Custody

PayrollPersonnel

Paper

Journal

Entry

Request

Paper

Paper

receivers

PaperInvoices

Paper

parts

order

Paper

PurchaseRequisition

Legacy System

Legend

Centra EDM/PDM

Engineering

Change Control

Log

Paper

ECP

Paper

Contract

MRP Models

batch file

batch filebatch file

batch file

Paper

Stock

level

decision

Security

Training

Paper

checks

Artemis Project

Fund Accounting

Primavera

Schedules

Paper

milestone

definitions

Logistics Support

Analysis

P r im a v e r a


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L o g i s t i c s S u p p o r t

A n a l y s i s

P u m p / M o t o r R u n

T i m e

W o r k O r d e r

S y s t e m

C a t a l o g

A c c o u n t s P a y a b l e

D i s b u r s e m e n t sS e c u r i t y

R e a l P r o p e r t y

D O E F I M S

D O E D I S C A S

P u r c h a s i n g

G e n e r a l L e d g e r

B e n c h S t o c k

C o n t r o l

B a r C o d i n g

F i x e d A s s e t s

I n v e n t o r y C o n t r o l

S y s t e m

O f f - s i t e V e n d o r

C u s t o d y

P a y r o l l

P e r s o n n e l

P a p e r

R e c o r d s

J o u r n a l

E n t r y

R e q u e s t

P a p e r

P a p e r

r e c e i v e r s

P a p e r

I n v o i c e s

P a p e r

p a r t s

o r d e r

P a p e r

P u r c h a s eR e q u i s i t i o n

L e g a c y S y s t e m

L e g e n d

C e n t r a E D M / P D M

E n g i n e e r i n g

C h a n g e C o n t r o l

L o g

P a p e r

E C P

P a p e r

C o n t r a c t

M R P M o d e l s

b a t c h f i l e

b a t c h f i l eb a t c h f i l e

b a t c h f i l e

P a p e r

S t o c k

l e v e l

d e c i s i o n

T r a i n i n g

P a p e r

c h e c k s

A r t e m i s P r o j e c t

F u n d A c c o u n t i n g

P r i m a v e r a

S c h e d u l e s

P a p e r

m i l e s t o n e

d e f n i t i o n s

H u m a n

G l u e


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PROCESS EFFICIENCY

Realized through ability to reducethe personnel requirements to

perform the processTransfer into processes that wereable to meet customer requirements

THE KEY ENABLER ONE


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11

SAP R/3SAP R/3 Omni-functionalOmni-functional

Fully integratedFully integrated

Process-orientedProcess-oriented Off-the-shelfOff-the-shelf

THE KEY ENABLER: ONESYSTEM

SAP R/3SAP R/3Single CentralSingle Central

DatabaseDatabase

FinancialFinancialAccountingAccounting

ControllingControlling

FixedFixed

AssetsAssetsMgt.Mgt.

WorkflowWorkflowExec.Exec.

InformationInformation& Report& ReportWriterWriter

MaterialsMaterialsMgt.Mgt.

Sales &Sales &DistributionDistribution

ProductionProduction

PlanningPlanning

QualityQualityMgt.Mgt.

ProjectProjectSystemSystem

PlantPlant

MaintenanceMaintenance

HumanHumanResourcesResources

FIFI

COCO

AMAM

PSPS

MMMM

PMPM

HRHR

WFWF

PPPP

SDSD

QMQM


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Some SAP Products

R/3

APO

Customer Relationship Management (CRM)

Business process improvement (BPI)

Strategic Enterprise Management (SEM)

Business Warehouse (BW)


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VI. SCM/ERP for SmallBusinesses MicrosoftDynamics

i f i


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Microsoft DynamicsScreenshot


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Microsoft Dynamics

Formerly Microsoft Business Solutions GreatPlains

With Microsoft Dynamics, you can bring supply-chainfunctions 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 peopleacross the chain, both inside and outside of theorganization.

And you can use the same portal technology to letyour executives review and augment performancewhen, where, and how they need to.

Wh Mi f D i i


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Why Microsoft Dynamics isfor small businesses?

Hardware considerations

Database requirements


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VI. Information Technologyfor for E-Business


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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
http://www.macromedia.com/software/flash/http://www.macromedia.com/software/flash/


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V. HardwareConsiderations for SCMsystems


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Intranet vs. Extranet

Intranet is to use Internettechnology and protocol (TCP/IP)

for the internal communications Extranet is to use Internet

technology and protocol for the

internal and supplierscommunications


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Network Infrastructure: WideArea 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

Gl b l C id ti i


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Global Considerations inUsing SCM/ERP Systems

Time differences

Language issues

Currency exchange rates

Tax

Different accounting systems

Internet and security restrictions

Culture and religion holidays

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