The Internet has a huge impact on how people shop, work and communicate. This technology has also created changes in how companies conduct business in the 21st century. One area of business that is likely to see a huge change in the coming years in supply chain management. Utilizing the power of the Internet, supply chain management will continue to evolve in a way that makes it possible for businesses to change the way they manage inventory orders with suppliers, and critical information with each other.
Although some of these technologies exist for years or decades in the case of radio frequency identification tags, the utilization of the Internet these technologies offers potential transforming supply chain management. Right-supply chain management also means greater control and improved parts profits.
In 2001, Nike's revenue missed the target by a substantial amount. The deficit is partly driven by supply chain automation project fails. "Some estimate that the new tape technology for more than $ 30 billion surplus stocks" (Fonstad). The term e-business – as distinct from e-commerce – can be used to describe the adoption of the Internet to accelerate the goal of supply chain integration (Lee) Four new technologies and practices for e-business will have a dramatic impact on supply chain management .
o Virtual marketplaces
o Radio-frequency identification tags (RFID)
o synchronized planning
o Supplier Performance Management
MetalJunction virtual marketplace owned by two of India's largest steel producer. In March Tata Steel and Sail Steel sold more than 5,000 tons of steel in 2002 in March 2003, tonnage increased to 43,000 tonnes per month (Mills).
What is a virtual marketplace and what are the applications industry? Virtual marketplaces many names, such as e-markets, the net market places and electronic markets. These markets are all common characteristics.
o Reliance on the Internet
o buyers and sellers come together without an intermediary
o neutrality (all buyers and sellers in the same way a)
o information They provide sellers and products
is the most basic form, a virtual marketplace bringing together buyers and sellers over the Internet. At the highest level, the virtual market, customer and supplier gives the opportunity to re-engineer sales administrative process to improve forecasting and scheduling, renew your go-to-market approach, shorten order-to-cash cycle, and enhance customer service (Steel24-7) . Ideally, the virtual marketplaces focused on a particular industry. Some prominent examples of steel, agricultural products and car parts. In addition to providing general information about vendors and products in the virtual market also offer product descriptions, side-by-side comparisons, technical papers, and market analysis.
A number of challenges before setting up e-marketplaces. The primary one is identified with the necessary tools to use in the market, which is a secure environment, pricing, payment, and fulfillment. A fair marketplace for Internet protocols must be selected. The cost of the technology to reach and engage the market should not be prohibitive. Security and privacy must be to ensure the confidentiality of transactions. Authentication and authorization of users, many organizations should be possible. Private communication must be provided.
pricing policies can be set and can not be replaced. An everyday example of barter or auction on E-Bay for consumer products. Payment procedures can be pre-arranged or the buyer and the seller. Finally, execution of orders must be insured. Just like the traditional markets do not deliver on time will result in companies losing their market power and eventually lead to errors (McKnight).
The final concern is the virtual markets jurisdiction and governing law. Virtual market place members of the global trading community. Because these markets are a recent phenomenon that defines the legal system to settle disputes in charge of an evolving process. The present legal arguments put jurisdiction in the locality in the market. A virtual market, but you need to ask where the market actually exists. Although the FTC has attempted to control over the exercise of on-line transactions, the final decision on the jurisdiction of the international e-marketplaces have not yet been made.
Radio-frequency identification tags
In November 2003, Wal-Mart's top 120 suppliers gathered in the need for radio frequency identification tags (RFID) shipping cases and pallets of goods. Wal-Mart set a deadline of January 2005, the top 100 suppliers. The remaining suppliers had until the beginning of 2006, to meet the requirement (Sliwa).
A basic RFID system consists of three components.
o transponder (tag)
antenna activates the tag, reading and writing data to it. When one goes to a RFID tag reader, transmitting information to the host computer for processing. The most common passive RFID system and contain their own power source, a short range, operating under the low-frequency and low-cost. While RFID has been there from the 1960s to the latest changes in technology have reduced costs and made it possible to use several applications of the technology.
The ordinary RFID card is read automatically passes on toll roads. The benefits of RFID many times. For example, RFID is extremely fast, non-contact, it does not require line of site, and can operate in a variety of weather conditions. The list of advantages of RFID case goes to Wal-Mart, the cost of transport of the task. Kara Romanov, analyst at AMR Research, Inc., estimates the start-up cost of a supplier who will ship 50 million containers per year between $ 13 million $ 23 million. These costs include the RFID tags and related hardware and software (Sliwa).
SAMSys Technologies of Richmond Hills, ON and ThingMagic, LLC in Cambridge, MA two leaders in the application of RFID in supply chain management. Sam-Sys is committed to an open system environment that is not restricted to a single RFID protocol or frequency range. This philosophy is based on the assumption of many vendors and readers that will work seamlessly together (SAMSys).
ThingMagic was founded in 2000 to five MIT graduates. It has developed low cost RFID systems. ThingMagic is currently developing and marketing protocol agile RFID tag readers (ThingMagic). In addition to Wal-Mart, a key player in the Department of Defense (DOD) RFID development and deployment. The Department of Defense issued a new policy that requires all suppliers to embed with the passive RFID chips for each product is possible, or otherwise the level of cases and pallets by January 2005. In February 2004, the DOD ordered summit its suppliers to discuss its RFID plans ( Broersma). To quote Colin Cobain of Tesco Stores CTO: "The issue is not going to change the RFID business The question is, will you be ready to go." (ThingMagic).
PLANNING ACROSS A synchronized supply CHAIN
"in the form of synchronized collaborative planning forecasting and replenishment, coordinated production, inventory and capacity plans, information integration, and direct connection to ERP systems, one of the most exciting developments in supply chain management in many industries "(synchronous). Synchronized planning is a key step in (Lee).
o Information Integration
o Planning synchronization
coordination o Workflow
o new business models
First, information integration requires information sharing and transparency. This sharing of information between members of the supply chain. Exchanged information may include inventory levels, production schedules and delivery schedules. The benefits include better labor scheduling, and reduce the bullwhip effect. "Synchronization indicating a lack of competence between supply chain members. Even a small change in consumer sales in the form of large waves back upstream vibrations, similar to the result in a flick of a whip handle" (Chase 335).
design synchronization determines what to do with the information that is shared. This includes collaborative planning and joint planning. The benefits of lower costs and improve services.
If the synchronization is planning a "we" should be a shared information and coordinating work processes "how" to do it. Operations which coordinate including procurement, engineering and design changes and production planning. Benefits include early time to market, better service and improved efficiency. Synchronized planning can lead to new business models. Not only is the new business workflow models, will again lead to a change in responsibility for different parts of the supply chain. The redefined the supply chain together with new products and lead to the expansion of new markets (Lee).
synchronized planning, however, can not be achieved without a tight connection of all companies in the supply chain. Communication channels must be well defined and the performance of each member of the chain should be checked. The integrated supply chain members should be responsible for participating in the process. As product life cycles grow shorter, the effective coordination of the supply chain is growing in importance. To ensure that the supply chain is driven by consumer demand and reduce the bullwhip effect, synchronized planning is an important (Lee).
SUPPLIER PERFORMANCE MANAGEMENT
Because of the supply chain of different organizations that are closely intertwined, it becomes necessary to measure the performance of each member of the chain. The former chairman of the Federal Reserve, Alan Greenspan testified before Congress in February 2001 that the company could not predict the economic downturn of the last recession, despite overbuilding stocks have supply chain automation (Fonstad). Even the use of the latest technology, and therefore can not guarantee that the supply chain works effectively.
One way to answer the question as to how well the supply chain works to improve supplier scorecards. There are five steps you can Effective scorecard (Golovin).
o accept that what's important, and how to measure it
o Use Reports web-based incident to communicate problems to occur
o Engage in ongoing suppliers
o measures to prevent, but also to respond
o use of web-based software that can all suppliers to use without costly investment in software and training
it is important that the buyer and seller agrees from the outset that what is important and how it is measured. This is important because once decided, a supplier to optimize the work of the selected criteria. If only the timely delivery of priority, focus on this aspect of its suppliers at the expense of other factors. In addition, the criteria used to measure supplier performance must be realistic and achievable.
Actual performance against then consistently follow these benchmarks. The producer and distributor should work together to develop benchmarks that are the industry's performance and product specifications in line. Using Web accident reports is important in keeping track of the problems occur. Incident reports should not only follow the problems, but should be used to solve problems in real time. It is also important to take the time to weigh the supplier to resolve the issue.
Continuous treatment of suppliers, sometimes referred to as transport engineering, has become increasingly important as manufacturers outsource more of their operations. The 90-day review cycle ruined if the production of an innovative product. "Innovative products are typically only a few months of its life cycle" (Chase 337). The 90-day review cycle can be more than competitive advantage closer to an innovative product. Effective and ongoing supplier management should be adjusted at certain times and tolerances. This was then tied to a web-based incident reports, which allow alarm if the products or delivery of the agreed variations.
An effective supplier scorecard should be set up to prevent problems, as opposed to reacting to them. The sooner you know, we have a problem to solve, lower costs, and the greater the chances of preventing that completely. The best scorecard is not only measured after the events occurred, I keep in monitoring in real time. The use of automation is key to making this happen. For example, a system that meets the accounts of orders will catch pricing errors before a check is cut and the manufacturer of the money out the door. Utilizing a web-based software not only reduces the cost of transporting integrate the manufacturer to speed up the integration process. Web-based software also allows service providers to both small and large part of the supply chain.
The other four points listed above are all expected to be a producer and a supplier to participate in the design, procurement, quality control, and delivery of the product. The Internet allows all members of the supply chain to collaborate and work together as a team. Finally, the performance of Web-based suppliers, the suppliers are able to take part in their performance improvement (Golovin).
supply chain management is an interesting and complex subject. It is the essence of the new business methods in the 21st century. The nearly universal availability of internet technology changes how the licensing of the supply chain is managed by an enterprise. The Internet makes it possible to adopt new business practices and new markets. Utilizing the power of the Internet, supply chain management will continue to evolve over the changes implemented today.
E-business was the logical continuation of e-commerce. E-business accepts the power of the Internet to speed up the growth of the supply chain integration. While the E-business supply chain management had a huge impact, it also can be adapted to both the front and back of business activities (Lee). Improved inventory management and increased profits of two of the benefits of improved supply chain management. As mentioned in the introduction, Nike dropped out of the 2001 profit targets part of the supply chain automation project execution failed. It is estimated that resources in excess of over $ 30 billion dollars can be eliminated improved supply-chain management. These are real savings can be made directly to the bottom line.
Four new technologies and business practices that take advantage of the Internet virtual marketplaces, radio frequency identification tags, synchronized planning (RFID), and supplier performance management. Virtual markets allow buyers and sellers to come together 24/7 in effect create a store that never closes. A further advantage is the virtual elimination of intermediaries in the market places, access to product and seller information, and a neutral marketplace where buyers and sellers all treated equally. Virtual markets provide both buyers and sellers the opportunity to re-engineer sales administrative process.
As mentioned above, since the RFID exist in 1960, but improvements in technology and the Internet has expanded RFID paring this tracking method is too little time in the factories. The three components of RFID system, an antenna, transceiver and transponder (tag).
applied across the supply chain is collaborative forecasting and replenishment, coordinated production, inventory and capacity planning, information integration, and direct connection to the ERP systems in
synchronized planning. The four key steps in the planning synchronized information integration, synchronization planning, coordinating workflow, as well as the opportunity to develop new business models. Key synchronized planning to use the Internet to share information. The advantages of synchronous design: a better work scheduling and reducing whiplash affected. The whiplash affect magnify the oscillations caused by the change in the upstream supply chain for consumer sales. Dubbed design also determines what to do with the joint information and how it will happen. As product life cycles grow shorter, the effective coordination of the supply chain reward companies who seize the opportunities.
Supplier scorecard method step of the supply chain organizations increasingly intertwined. As Alan Greenspan pointed out in 2001, many companies were not able to predict the last recession and continued overbuilding inventory despite the fact that invested heavily in supply chain automation. This finding supports the need to develop tools for monitoring the performance of companies up and down the supply chain. The five steps to an effective scorecard accept that what is important and how to measure, the use of web-based incident management reports continued commitment of suppliers to prevent measurement problems, and the use of web-based software. In rolling out these tools, it is important that the buyer and seller in front of what is important and how to measure. The other step is to flow in the first.
The Internet has had a tremendous impact on the personal and professional lives of business people. The business side, the Internet has brought new life to existing technologies and business opportunities offered to participate in the world market. The utilization of the Internet made it possible for more business cooperation and exchange of information up and down the supply chain. The Internet has made it possible for companies to improve their supply chain by the way they manage inventory, orders, and critical information with each other.
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Source by Edward Fadden