The Internet has a huge impact on how people communicate, buy and work. This technology has also made changes in how businesses do business in the 21st century. One area of business that is likely to see great changes in the coming years is supply chain management. Using the power of the Internet, supply chain management will continue to evolve so that businesses can change the way they manage inventory, place orders with suppliers and transfer important information to each other.
Although some of these technologies have existed for years or decades in the case of RFID tags, the use of the Internet in these technologies opens up possibilities for transforming supply chain management. Improved supply chain management also contributes to improved inventory management and increased profits.
In 2001, Nike missed its target by a significant amount in dollars. The drawback was due in part to the unfortunate supply chain automation project. “According to some estimates, new technologies may deprive more than $ 30 billion of excess reserves” (Fonstad). The term “e-business” - as opposed to e-commerce - can be used to describe the introduction of the Internet to speed up the goal of supply chain integration (Lee). Four new technologies and practices in e-business will have a significant impact on the supply chain management system.
o Virtual markets
o Radio Frequency Identification (RFID) marking
o Synchronized scheduling
o Supplier Performance Management
VIRTUAL MARKETS
MetalJunction is a virtual market owned by the two largest steel producers in India. In March 2002, Tata Steel and Sail Steel trade more than 5,000 tons of steel. By March 2003, tonnage increased to 43,000 tons per month (mills).
What is a virtual market and what are its applications for industry? Virtual markets have many names, such as e-markets, net market positions and e-markets. All of these markets share common characteristics.
o Internet reliance
o Buyers and sellers get together without an intermediary
o Neutrality (all buyers and sellers are treated the same)
o Provides information about sellers and products
In its most fundamental form, the virtual marketplace brings together buyers and sellers through the Internet. At its highest level, the virtual market gives the buyer and supplier the opportunity to restructure the sales management process, improve forecasting and planning, update their approach to the market, shorten its cycle of orders to cash, and improve customer service (Steel24-7). Ideally, virtual market places are focused on a specific industry. Some proton examples are steel, agricultural products and automotive parts. In addition to providing information about suppliers and general information about its products, the virtual market can also offer product specifications, parallel comparisons, technical documents and market analysis.
There are many problems in creating an electronic market. The main one is to identify the tools needed for use in the market, ensuring a safe environment, pricing, payment and execution. For an orderly market, you must select Internet protocols. The cost of technology for access and participation in the market should not be prohibitive. Security and privacy should be sufficient to ensure confidential transactions. Authentication and authorization of users from many organizations should be possible. Private communication should be provided.
Pricing policies can be set or exchanged. A frequent example of a barter or auction is E-Bay for consumer products. Payment methods can be predetermined or set between buyer and seller. Finally, the execution of orders must be insured. As in the case of traditional markets, failure to present in a timely manner will result in firms losing market power and leading to failure (McKnight).
The final issue of concern in virtual markets is jurisprudence and legal regulation. Virtual markets place their members in the global trading community. Since electronic markets are a recent phenomenon, the protection of the legal system responsible for the settlement of disputes is an evolving process. Currently, legal arguments establish jurisdiction in the marketplace. However, in the virtual market you need to ask where the market really exists. While the FTC tried to control operational transactions, the final decision on jurisprudence for the international markets for the electronic market has not yet been made.
IDENTIFICATION TAGS OF RADIO FREQUENCY
In November 2003, Wal-Mart gathered 120 leading vendors to state that radar tags (RFID) would require radio frequency identification tags (RFID) on shipping pallets and product housings. Wal-Mart set a deadline of January 2005 for its top 100 suppliers. The remaining suppliers will receive by the beginning of 2006 this requirement (Plum).
A basic RFID system consists of three components.
o Antenna
o Transceiver
o Transponder (tag)
The antenna activates the tag, reads and writes data to it. When the RFID tag passes the reader, its information is transmitted to the host computer for processing. The most common RFID systems are passive and contain their own power source, have a short transmission range, operate at a low frequency and have a low cost. While RFID has been introduced since the 1960s, recent technological changes have led to cost savings and allowed the technology to be used in more applications.
The usual everyday use of RFID is to automatically read prepaid passes on toll roads. The benefits of RFID are many times. For example, RFID is extremely fast, non-contact, does not require a site line, and can operate in various weather conditions. In the case mentioned above, the benefits of RFID will go to Wal-Mart, and the costs will come from the suppliers. Analyst AMR Research, Inc. Kar Romanov estimates start-up costs for a supplier who ships 50 million containers a year, between 13 and 23 million dollars. These costs include RFID tags and related hardware and software (Sliwa).
SamSys Technologies of Richmond Hills, ON and ThingMagic, LLC from Cambridge, Massachusetts, are two leaders in the use of RFID for supply chain management. Sam-Sys is designed for an open system environment that does not limit RFID to a single protocol or frequency range. This philosophy is based on the promise of many suppliers and readers who will work together (SamSys).
ThingMagic was founded in 2000 by five MIT graduates. He designed low-cost RFID systems. Currently, ThingMagic is developing and promoting a flexible RFID tag reader protocol (ThingMagic). In addition to Wal-Mart, the Department of Defense (DOD) is a key player in the design and deployment of RFID. The Department of Defense issued a new policy whereby all vendors introduce passive RFID chips into each individual product, if possible, or otherwise at the level of cases or pallets by January 2005. In February 2004, DOD held a summit for its suppliers to discuss their RFID plans (Broersma). According to Colin Cobain, CTO of Tesco Stores: “The issue is not to change RFID, how you do business. The question is that you will be ready ”(ThingMagic).
SYNCHRONIZED NETWORK PLANNING
“Synchronous planning in the form of joint forecasting and replenishment, coordinated production, inventory and capacity plans, integration of information and direct links of ERP systems is one of the most interesting developments in supply chain management in many industries” (synchronous). Synchronous planning involves key steps (Lee).
o Integration of information
o Synchronization planning
o Coordination of workflow
o New business models
First, information integration requires information sharing and transparency. This is the exchange of information between members of the supply chain. Modified information may include inventory levels, production schedules, and shipping schedules. These benefits include better work planning and reduced bull effect. “The effect indicates a lack of synchronization between members of the supply chain. Even a small change in consumer sales pulsates backward in the form of increased upward fluctuations, which resembles the result of a click of a bull's handle ”(Chase 335).
Scheduling synchronization determines what to do with general information. This may include joint planning and joint design. Benefits - lower cost and improved service.
If synchronization of planning is what needs to be done with general information, coordination of the work process is “how” it is done. Operations that can be coordinated include procurement, engineering and design changes and production planning. Benefits include early time to market, improved service and increased efficiency. Synchronized planning can lead to new business models. Not only can these new business models override the workflow, they can lead to a change in responsibility for different parts of the supply chain. The revised supply chain may jointly create new products and bring new markets (Lee).
Synchronous planning, however, cannot be achieved without tight coupling of all companies in the supply chain. Communication channels should be clearly defined, and the performance of each element in the chain should be monitored. An integrated supply chain should contain members responsible for their participation in the process. As product life cycles become shorter and shorter, effective synchronization of the supply chain increases. To ensure that the supply chain is driven by customer demand, as well as to reduce the bull effect, synchronized planning is crucial (Lee).
ORDER OF SUPPLIER PERFORMANCE
Since the supply chains of various organizations are closely intertwined, it becomes necessary to measure the performance of each member of the chain. Former Federal Reserve Chairman Alan Greenspan checked before Congress in February 2001 that enterprises could not foresee the economic downturn of the last recession, overproduction of stocks, despite significant automation in the supply chain (Fonstad). Therefore, the use of new technologies can not guarantee the effective functioning of the supply chain.
One way to answer the question of how well the supply chain is functioning is to develop vendor rating maps. There are five steps in developing an effective scorecard (Golovin).
o Agree on what is important and how to measure it.
o Use web-based incident reports to report problems as they arise.
o Enabling ongoing vendor management
o Measurement for prevention, not reaction
o Use network software that all vendors can use without costly investment in software and training
It is important that the buyer and the seller agree from the very beginning on what is important and how it is measured. This is crucial because after the decision is made, the supplier will optimize his work according to the specified criteria. If timely delivery is a priority, the supplier may focus on this aspect of the order to the detriment of other factors. In addition, benchmarks for assessing the effectiveness of suppliers should be realistic and achievable.
Then you should consistently monitor the actual performance compared with these indicators. The manufacturer and the supplier must work together to develop benchmarks that meet industry benchmarks and product specifications. Using incident reports on the Internet is important for tracking issues as they arise. Incident reports should not be used only to track down problems, but should be used to solve problems in real time. It is also important to measure the time taken by the supplier to correct the problem.
Continuous supplier management, sometimes referred to as supply engineer, has become more important as manufacturers outsource more of their operations. A 90-day review cycle can be devastating when you produce an innovative product. “Innovative products typically have a life cycle of just a few months” (Chase 337). The 90-day review cycle may come close to exceeding the competitive advantage of an innovative product. Effective continuous management of suppliers should be focused on specific periods and tolerances. This is then linked to web-based incident reports, which allow you to alert calls when products or delivery do not meet the agreed tolerances.
You need to create an effective vendor evaluation card to prevent problems, not to respond to them. The sooner you learn that there is a problem, the lower the cost of fixing it and the more likely it is to prevent it altogether. The best scorecard not only measures events after they occur, they constantly monitor performance in real time. Using automation is key to making this happen. For example, a system that matches invoices with purchase orders will resolve pricing errors before the check is cut and the manufacturer’s money goes out the door. Using web-based software not only reduces the cost of a supplier that integrates with a manufacturer, but also speeds up the integration process. Web-based software also allows suppliers, both small and large, to participate in the supply chain.
The remaining four points listed above rely on the ability of the manufacturer and supplier to participate in planning, searching, quality control and product delivery. The Internet allows all members of the supply chain to collaborate and work together in a team. Finally, by ensuring the effectiveness of the supplier on the website, suppliers can participate in improving their results (Golovin).
CONCLUSION
Supply chain management is an interesting and complex question. This becomes the basis of new business methods in the 21st century. The near universal accessibility of the Internet is a favorable technology for changing how an enterprise supply chain is managed. The Internet also allows organizations to introduce new business practices and enter new markets. Using the power of the Internet, supply chain management will continue to evolve beyond the changes that are being implemented today.
E-business has become the logical outcome of e-commerce. E-business supports the power of the Internet to accelerate the growth of supply chain integration. While e-business has had a huge impact on supply chain management, it can also be adapted to both business transactions on the front side and at the end of the business (Lee). Improved inventory management and increased profits are two of the benefits of improved supply chain management. As noted in the introduction, Nike missed its targets for 2001, in part because of the unsuccessful implementation of the supply chain automation project. It was also estimated that the more excess reserves of $ 30 billion. The US can be eliminated by improving supply chain management. These real savings can be brought straight to the bottom line.
The four new technologies and business practices that exploit the power of the Internet are virtual markets, RFID tags, synchronized planning (RFID), and supplier performance management. Virtual markets allow buyers and sellers to unite 24/7, in effect creating a store that never closes. Additional benefits of virtual markets are the elimination of a middleman, access to information about products and suppliers, and a neutral market where all buyers and sellers are treated in the same way. Virtual markets give buyers and sellers the opportunity to restructure their sales management process.
Как отмечалось выше, RFID реализовала с 1960 года, однако усовершенствования технологии и парирование RFID с Интернетом расширили этот метод отслеживания за пределы его ограниченного прошлого на заводах-изготовителях. Три компонента системы RFID - это антенна, приемопередатчик и транспондер (тег).
Синхронное планирование при применении в цепочке поставок состоит из совместного прогнозирования и пополнения запасов, скоординированного планирования производства, инвентаризации и мощности, интеграции информации и прямой связи систем ERP. Четыреми ключевыми этапами синхронного планирования являются интеграция информации, планирование синхронизации, координация рабочего процесса и возможность разработки новых бизнес-моделей. Ключ к синхронизированному планированию - это использование Интернета для обмена информацией. Преимущества синхронного планирования включают в себя лучшее планирование работы и снижение влияния быка. Эффект «bullwhip» усиливает колебания вверх по течению в цепочке поставок, вызванные изменением потребительских продаж. Синхронное планирование также определяет, что должно быть сделано с общей информацией и как это будет сделано. По мере того, как жизненные циклы продуктов становятся короче, эффективная синхронизация цепочки поставок вознаграждает фирмы, которые используют свой потенциал.
Оценочные показатели поставщиков - это метод оценки членов цепи поставок во все более переплетенных организациях. Как отметил Алан Гринспен в 2001 году, многие фирмы не смогли предвидеть последний спад и продолжали переделывать инвентарь, несмотря на то, что вложили значительные средства в автоматизацию цепочки поставок. В этом заявлении подчеркивается необходимость разработки инструментов мониторинга производительности фирм вверх и вниз по цепочке поставок. В пяти шагах по разработке эффективной оценочной карты согласовывается то, что важно и как оно будет измеряться, использование отчетов об инцидентах в Интернете, участие в непрерывном управлении поставщиками, измерение для предотвращения проблем и использование веб-программного обеспечения. При развертывании этих инструментов крайне важно, чтобы и покупатель, и продавец сначала договорились о том, что важно и как оно будет измеряться. Другие шаги идут от первого.
Интернет оказал ужасное влияние на личную и профессиональную жизнь бизнесменов. С точки зрения бизнеса Интернет принес новую жизнь существующим технологиям и предоставил предприятиям возможность участвовать на мировом рынке. Использование Интернета по бизнесу позволило расширить сотрудничество и обмен информацией вверх и вниз по цепочке поставок. Интернет позволил компаниям улучшить цепочку поставок, поскольку они управляют запасами, размещают заказы и сообщают важную информацию друг с другом.
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