Procedure for Modeling and Improving E-SCM Processes

Today’s managers are turning to the functions of the supply chain to improve margins and gain competitive advantage. The explosion of the Internet and other e-business technologies has made real-time, online communication throughout the entire supply chain a reality. Electronic supply chain management (e-SCM) is a reference to the supply chain that is structured via electronic technology-enabled relationships. This chapter concentrates on the development of a procedure referred to as eSCM-I for e-SCM process improvement. The procedure focuses on process mapping and relies on principles of coordination theory. It is based on SCOR to standardize the process and take advantage of this technique of benchmarking/best practices potential. The procedure employs IDEF0 technique for mapping the processes.

Trading E-Coalition Modeling for Supply Chain

As the Internet grew and evolved, it became more widely used by everyone. What once was utilized by the military and used for academic purposes is now employed by companies for e-business marketing strategies and alliances in the supply chain. Historically, companies have found many ways to work together, playing different roles with regard to manufacturing, supplying, selling, delivering, and buying in the supply chain. Most of the time, according to role, members of each company get together in a shared space (i.e., marketplace) to work on a particular project (i.e., delivering quality goods or services to customers). The emergence of the Internet has brought an appropriate media to expand markets and enable collaboration with partners in all stages of product manufacturing, testing, and delivering through electronic commerce. Support for these collaborations over the Internet, called e-coalition here, is what this chapter is about.

Information Security Risk in the E-Supply Chain

Collaboration between supply chain partners, facilitated by integration of information flows, has created more efficient and effective networks. However, the benefits of interconnectivity are not gained without risk. Though essential to support collaboration, increased use of information technology has removed internal and external protective barriers around an organization’s assets and processes. Thus, supply chains are better able to satisfy the needs of customers while more vulnerable to an array of IT-specific risks. This chapter identifies the sources of IT threats in the supply chain, categorizes those threats, and validates them by means of a survey of 188 companies representing a range of supply chain functions. Analysis suggests that supply chain risk is affected by IT threats, and therefore the benefits of collaboration facilitated by IT integration must exceed the increase in risk due to IT security threats.

E-Com Supply Chain and SMEs

This chapter considers the perspective of small and medium-sized enterprises (SMEs) in supply chains. It starts with an overview of the important role of SMEs in national and world economies. Following this is an overview of supply chains, information and communication technologies, and e-business. Both opportunities and challenges for supply chains in general and SMEs in particular are considered, and conclusions drawn. The major contribution of the chapter is in providing an extensive overview of the literature as it relates to information and communication technologies, supply chain management, and SMEs, providing researchers and practitioners with a starting point to look for further information as needed.

Performance Management

The purpose of this chapter is to help you design a performance management framework that will result in choosing, successfully implementing, and getting significant benefits from e-supply chain technologies. The framework is designed to stimulate action by pinpointing where the gaps are, and leveraging technology to bridge those gaps. This is done using a balanced scorecard revolving around five critical variables: value, variety, velocity, variability, and visibility. The maturity level of each of these critical variables is classified using a six-level capability maturity continuum: ignorance, awareness, understanding, approach, action, and culture. This integrated approach of combining critical variables, balanced scorecard, and capability maturity helps leverage technology for the right purposes, and significantly improves the performance and productivity of the supply chain.

Coordination of a Supply Chain with Satisficing Objectives Using Contracts

Setting performance targets and managing to achieve them is fundamental to business success. As a result, it is common for managers to adopt a satisficing objective—that is, to maximize the probability of achieving some preset target profit level. This is especially true when companies are increasingly engaged in short-term relationships enabled by electronic commerce. In this chapter, our main focus is a decentralized supply chain consisting of a supplier and a retailer, both with the satisficing objective. The supply chain is examined under three types of commonly used contracts: wholesale price, buy back, and quantity flexibility contracts. Because a coordinating contract has to be Pareto optimal regardless of the bargaining powers among the agents, we first identify the Pareto-optimal contract(s) for each contractual form. Second, we identify the contractual forms that are capable of coordination of the supply chain with the satisficing objectives. In contrast to the well-known results for the supply chain with the objectives of expected profit maximization, we show that wholesale price contracts can coordinate the supply chain with the satisficing objectives, whereas buy back contracts cannot. Furthermore, quantity flexibility contracts have to degenerate into wholesale price contracts to coordinate the supply chain. This provides an important justification for the popularity of wholesale price contracts besides their simplicities and lower administration costs. Finally, we discuss possible extensions to the model by considering different types of objectives for different agents.

E-Supply Chain System at Valvex and Its Integration with ERP Systems

ERP and SCM systems have been used in China for some time. Although these two systems complement each other, the integration of these two systems is challenging. We present a case on a leading Chinese manufacturer of industrial valves named Valvex that successfully integrated the ERP systems from Entreplan and the SCM system from Excelvision. The project improved the operations at Valvex and resulted in many benefits. This chapter describes the implementation of the e-SCM system at Valvex and its integration with the existing ERP system. The process of implementation and integration was marked by many challenges, and some of them were unique to a Chinese manufacturing organization. Using several smart strategies the project team was able to overcome these challenges and complete the project successfully. Several lessons can be learned from the experience of Valvex which may be useful for organizations that plan to undertake similar projects.

Dynamic Transshipment in the Digital Age

In recent years, e-retailing has become the growth engine for the retailing industry. A large online retailer usually has multiple distribution centers serving different geographical regions. This chapter explores how to handle transshipment among distribution centers in a geographically dispersed network. We investigate transshipment strategies in a continuous review system with dynamic demand. We present a dynamic program that identifies the optimal transshipment rule. However, the dynamic program is time consuming and might be difficult for practitioners to implement. Therefore, we propose three distinct heuristic decision rules for making transshipment decisions. By employing numerical experiments, we analyze simulated results through various combinations of demand rates and delivery costs. We provide comments and suggestions based on the comparative results generated from different decision rules. As a result, we identify a good heuristic rule, which can be conveniently implemented and used in practice to determine effective transshipment policies.

Service Value Networks

This chapter addresses service value networks as a key pathway to establishing and likely retaining future strong competitive positioning within a service industry sector. A service value network may be defined as “the flexible, dynamic delivery of a service, and/or product, by a business and its networked, coordinated value chains (supply chains and demand chains working in harmony); such that a value-adding and target-specific service and/or product solution is effectively, and efficiently, delivered to the individual customer in a timely, physical, or virtual manner.” The service value network offers a future pathway for a business to develop its e-supply chain systems. It captures the contacting customer, and integrates the customer’s (virtual e-customer, virtual e-business customer, or physical customer) demands via its virtual or Web site interface into its integrated downstream service networks, seeks solutions, and delivers the appropriate business solutions back to the customer. Value-enhanced business encounter solutions are readily deliverable for targeted customers. The procedure to research and develop a service value network is described.

Building and Managing Modern E-Services

This chapter addresses the development cycle of recent ‘services’ models. It considers that all products involve services and consequently maybe be considered as service systems. First, the issue of ‘services’ is described; next, the enhancement of ‘services’ via value creation is described, along with the progression from supply and demand chains, to value chains, to service value chains, and finally to service value networks. This progression pathway has developed over time, and has enabled ‘service’ and ‘e-service’ businesses to deliver and further develop competitive business solutions. The combinations of integrated, highly competitive, e-supply chains delivering the final ‘services’ suite to the frontline business seller moves the e-supply chain model to a more advanced level. Today, the recent concept of utilizing service value networks offers a key to future competitive solutions. Service value networks house fully integrated e-demand and e-supply chains working in harmony to the deliver both services and e-services. They are also highly agile and offer customer-induced flexible business solutions to customer requests. This chapter highlights the progression to service value networks. In addition it also offers the manager a balanced scorecard structural mechanism via which management controls over e-services and service value networks may be developed and maintained.