Value chain management ¨C An ICT perspective

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Slanren ×ß×Ô¼ºµÄÂ·£¬ÈÃ±ðÈËËµÈ¥°É! <<<OpenCourseWare | Ê×Ò³ | :( :)>>> 2004-05-27 Value chain management ¨C An ICT perspective Value chain management ¨C An ICT perspective Yongzhi Li Definition of Value Chain Management It seems really puzzling for me to find a convincing definition for VCM, which on the other side indicate the essence of this ¡°newly¡± emerged hot subject. In my opinion, Value Chain Management is nothing but Operations Management in 21 st Century. Operations management is a traditional way of looking at how an organization transforms inputs into value-added outputs. It is the concept from era of functional organization and now, it has evolved into Value Chain Management. If there is an definition for VCM, then Value Chain Management is an entire process which contains many interdependent activities both inside and across an organization with an aim of delivering value-added products/services to its customer. In fact, I¡¯d like to bring forward my view of organizations based on the structure introduced by Shafter, S.M., and S.L. Oswald, 1996. [Image not available] From this point of view, we can see that supply chain should be managed by all its participants collaboratively instead of just one or two initiators. SCM projects l Overview SCM projects are more or less related to ICT not only because of the continuous advance in technology, but also due to the nature of supply chain, which consists of both information flow and goods flow. They are strategic important because competition at present is between supply chains rather than single organizations. SCM projects are often extremely difficult to implement successfully both in strategic level and operational level. First of all, different participant may have different strategic views on there relationships and have different levels of trust toward they partners. Thus an SCM project needs to be supported by the top management of all participants in order to achieve a common view on their mutual relationships or build the relationship which necessary for the future coordination. And the second obstacle is raising from the variety of products that the companies provide, which add to the complexity of designing suitable ICT-based processes for the products with different characteristics, which can be basically divided into two categories: functional versus innovative products [1]. l Best practices Based on the two strategic difficulties mentioned above, several best practices are proposed based on the nature of the products. 1. Different strategies for different products A company is an entity who produces or delivers products to its customers, thus all the processes that a company is dealing with need to be product and customer oriented. In today¡¯s turbulent global market, companies are getting harder and harder to predict the real demand of the customers by forecasting for their short-lasting products, and hence it¡¯s critically important for the companies to change their mindsets in another way around, which means the supply chain should be more demand-driven rather than merely based on prediction. This is called agile supply chain, in which ¡°Agile¡± means to be more responsive in a less predictable environment. On the other hand, with respect to some ¡°stable¡± products, smooth processes are required in order to make the flows move as quickly as possible. This is called lean supply chain, which focuses on efficiency. 2. Build relationships using various tactics Products are not the only issue need to be considered, for the reason that the products are never be made by a single organization today. More often than not, the products are assembled by many components which are produced by geographically dispersed suppliers and are supposed to be delivered to a variety of customers all over the world. Trust is the base for building relationships, and better relationship in turn would enhance the level of trust. Thus an SCM project is not only about ICT but about trust. Many tactics support the relationship building with the suppliers and customers, such as JIT, Direct-sales, VMI (Vendor Managed Inventory), and inventory visibility. Many of these means would not only enhance the relationship but also gain significant performance advantages for the companies. For instance, a successful VMI initiative would strengthen the cooperation between partners which in turn cuts the variable costs. ERP + SCM + CRM = Virtual Enterprise System When the idea of B2B first emerged, some dotcom companies were trying to build open markets where companies could trade and negotiate purchasing by using uniform platforms. But several years later, when many large companies turn to build their own supply chain solutions, many B2B portals became the playgrounds of smaller players and the complemental procurement markets for those big players because these public exchanges can not connect themselves to the core functions of the organizations. An ERP system is a packaged solution which provides many process management tools by managers, and it is composed of several modules such as production, finance and distribution. The power of an ERP system does not lie in these separate modules but the ability of linking them together. By using an ERP system, all the departments of the company are linked together and share the same information (hence no duplicate data). It is mainly used by manufacturing company. The top three ERP vendors are: SAP www.sap.com Oracle www.oracle.com PeopleSoft www.peoplesoft.com A SCM system can be seen as an add-on of the ERP system, which allows the organizations to see beyond the scenes of its boundary. It focuses on planning and coordinating aspects rather than execution as an ERP system does. By connecting the suppliers and customers all together in terms of information, SCM enables the rigid ERP system to be more adaptive and responsive to the changing environment. The top SCM vendors are: i2 Technologies Inc www.i2.com IBM www.oracle.com Manugistics www. manugistics .com Oracle www.oracle.com Customer Relationship Management, or CRM, is an information technology industry term for methodologies, strategies, software, and other web-based capabilities that help an enterprise organize and manage customer relationships [2]. It focuses on small customers, which means that more often the SCM system would take the responsibility of maintaining relationship with the big customers. The top 15 software packages announced were: Applix Enterprise v. 8.0 from Applix, SalesLogix 2000 v. 4.02 from Interact Commerce Corporation, Clarify eFrontOffice v. 10.0 from Nortel Networks, eCMS from OnContact Software, Onyx 2000 from Onyx Software, Vantive Enterprise v. 8.5 from PeopleSoft, Pivotal eRelationship 2000 from Pivotal, ePoint 5 from Point Information Systems, Remedy CRM Solutions Suite form Remedy, MySAP CRM 2000 from SAP AG, Siebel Sales 2000 from Siebel Systems, Staffware eCRM v. 8.0 from Staffware, marketing.manager 4.5 from update.software AG, Worldtrak v. 5.0 from Worldtrak and YOUrelate from YOUcentric. *Source: ISM, 2001 When we looked at the packages offered by those biggest software providers, we can see that there is a trend of integrating all these systems including ERP, SCM, and CSM to build customized ICT solutions for the whole value chain, which can be called virtual enterprise system. I think these integrating movements will definitely give the organizations the power to build an effective and efficient value chain, and ultimately, a seamless value network. References: [1]: Aligning Supply Chain Strategies with product uncertainties, Hau L.Lee [2]: CRM.ITtoolbox.com slanren ·¢±íÓÚ 2004-05-27 21:57 ÒýÓÃTrackback(0) | ±à¼ ÆÀÂÛ ·¢±íÆÀÂÛ ×îºó¸üÐÂ :( :) Êî¼Ù¿ªÊ¼ÁË Social Networks? Online RSS aggregator Leapfrogging OpenCourseWare ½yÒ»°¡½yÒ»£¡ À§ ¸ÐÏë Creative Commons License. Value chain management ¨C An ICT perspective This work is licensed under a Creative Commons License .