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OBS 326: Supply Chain Management > Chapter 12: Information Sharing > Flashcards

Chapter 12: Information Sharing Flashcards

1
Q

4 Reasons why information is important?

A
  1. Improved customer satisfaction
  2. Increased flexibility
  3. Redefines SC relationships (information sharing)
  4. Substituting information for inventory or other resources reduce costs
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2
Q

What does information technology strategy comprise of?

A

2 components
1. Connectivity
• Technology allows/makes it possible for various people, teams, functions and organisations to work together
2. Willingness
• Information is power, thus sharing information means relinquishing some power

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3
Q

What is Enterprise Resource Planning (ERP)

A

• A single database surrounded by application programs that take data from the database and either conduct analysis or collect additional data for the firm.

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4
Q

ERP vs. Legacy Systems: 3 Differences?

A

ERP
• Single integrated database
• Data entered once
• Integrated, cross-functional

Legacy systems
• Multiple databases
• Data entered several times
• Standalone

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5
Q

ERP Implementation Process: Step 1

A
  1. Define the current process “as is”

• Cross-functional implementation team of subject-matter experts document the current processes

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6
Q

ERP Implementation Process: Step 2

A
  1. Define what the best-in-class business process should be
    •State the final objective of the process
    •Identify what the ERP system will replace
    •Identify how the benefits are likely to occur
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7
Q

ERP Implementation Process: Step 3

A
  1. Develop the system

• Consultants work together with those who are most familiar with the business processes in question

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8
Q

ERP Implementation Process: Step 4

A
  1. Work through all the final “bugs” and then “flip the switch”
    • Company may not be ready for change
    System may not be configured to handle specific activities
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9
Q

ERP Implementation Issues: Excessive Costs

A

•Without proper planning, the timeline and cost can quickly exceed the budget

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10
Q

ERP Implementation Issues: Resistance to change

A

•Managers and employees often prefer the legacy systems and are resistant to change

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11
Q

ERP Implementation Issues: Errors during implementation

A
  • Errors in new systems may become evident only after implementation
  • Solutions include:
  • Slowly phasing the new system in and the old system out
  • Running the two systems concurrently until al “bugs” are fixed
  • Pilot projects at certain locations for beta testing
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12
Q

ERP Implementation Issues: Rapid technological change

A
  • Can render new systems obsolete, complicating cost-benefit analysis
  • Early adopters may have the benefit of being ahead of competitors
  • Early adopters run the risk of acquiring untested technology that could disrupt the firm’s entire operation
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13
Q

ERP Implementation Issues: Never-ending implementation

A
  • Many firms adopt an ERP system module by module, extending the implementation period
  • Simple implementations take a year or more
  • Complex implementations have taken close to a decade
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14
Q

ERP Implementation Issues: Use of consultant

A
  • There is a learning curve in any new technology
  • Knowledgeable consultants can help companies along the learning curve
  • Relying solely on outside consultants can lead to expensive implementation that doesn’t meet company needs
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15
Q

Internet

A

Allows unlimited access

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16
Q

Intranet

A
  • Allows systems access to limited number of parties
  • Avoids custom interface
  • Avoids incompatible types of hardware
  • Avoids special connection procedures
17
Q

Extranet

A

•Allows limited access to certain applications and data to external users

18
Q

What is Electronic-commerce?

A
  • The automation of commercial transactions using computers and networked communication technologies.
  • Includes Internet, email, EDI, EFT
19
Q

How can E-commerce reduce costs?

A
  • Centralisation of inventory
  • Centralisation shipping locations
  • Reduced safety stock
  • Consolidation of inbound transportation/reduce costs
20
Q

How can E-commerce enhance revenue?

A
  • Removes time and location constraints
  • Allows direct sales to customers (no intermediary)
  • Allows instantaneous and flexible introduction of products and product mixes
  • Allows customers to instantly pay, reducing cash-to-cash cycle time
  • Allows real-time access to demand in inventory data to facilitate better decision-making.
21
Q

What is an Electronic Marketplace?

A
  • Neutral Internet-enabled entities through which companies buy or sell goods or services.
  • Neutrality – e-marketplace does not represent a single buyer or seller
22
Q

What are the limitations of E-marketplace?

A
  • Do not yield significant, repeatable price cuts
  • Not a viable substitute for a company’s SC department
  • Not the solution for all of a business’s purchasing needs
23
Q

Why should information be shared?

Benefits of sharing information?

A
  • Improved customer service
  • Reduced costs
  • Increased sales
  • Reduced lead times
  • Improved quality
  • Increased profitability
  • Enhanced diffusion of technology and innovation
24
Q

What information should be shared?

Companies should share:

A

• Sales data and sales forecast
o To reduce Bullwhip effect, companies should share actual sales data as well as orders with their suppliers.
o Suppliers need to know why their customers ordered more this month than last month.
o This leads to best inventory management decisions
• Inventory levels
o Providing visibility into inventory levels can reduce the total level of inventory by reducing the amount of safety stock required.
• Order status for tracking
o Customers want to know the real-time status of their orders.
o This information can be used to trans-ship to other customers, DC or production facilities to meet unexpected need.
• Performance metrics
o Companies should share their performance metrics with their suppliers and customers.
o This could point out strengths and weaknesses of SC members.
o This information can be used to improve the performance of individual players or provide insight needed to shift tasks to other members in the SC.
• Capacity and capability information
o SC partners need to know the capacity levels, potential disruptions and when new capacity is going to come on-line
o Similar information should be shared for new capabilities
o Helps prepare for shortages

25
Q

When should information be shared?

A
  • Most companies share information during the late growth and maturity stages of the Product Life Cycle (PLC)
  • Increased information sharing during the design/introduction and decline stages could have a greater impact:
  • Design – Early Supplier involvement (ESI)
  • Introduction – Improved forecast accuracy
  • Decline – Avoidance of obsolete inventory & reverse logistics

OBS 326: Supply Chain Management (1 decks)

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