Chapter 5: Class Notes

BSB Strategies:
Purchasing & Logistics
e-Procurement: function within most large companies - many purchasing funtions are now done through online systems like Ariba as well as outsourced companies
- identify vendors
- evaluate venors
- place orders
- track receipt
- process payment

Direct vs indirect materials
- direct: anything that goes into manufacturing process
- indirect: MRO (maintenance, repair, operations)

Logistics management
- usually need understanding of the accounting function

Support Services & KM
- supply chain is a component of the entire value class - should be an activity that adds to te final product
- knowledge mgmt: able to capture all info from supply chain or elsewhere

Electronic Data Interchange (EDI) - echange or transfer of information(not money) between two parties (purchase orders, receipts)
How EDI Works
- P
ANSI ASC X12
UN EDIFACT

**** IMPORTANT!!!******Direct vs. VANs
- direct: no intermediary system - you are connecting your EDI comp to someone elses EDI directly - requires leased-line (connection that is always on)
- VANs: value added network - intermediary is involved (your system connects to the VAN) - don't need leased-line connection - treating EDI like email (good for companies like Kal Tire, not fortune 500 companies)

Internet EDI
- VPN: vitural private network, issue of security - ppl don't trust having purchase orders floating across internet unprotected

Financial EDI
- exchange of money, Clearing House (ACH - automated clearing house) - they transfer money from bank to bank using clearing house as intermediary

Supply Chain Management (SCM)
Upstream vs Downstream
- Upstream: raw materials - inbound logistics - warehouse and storage - production (everything that went in to creating a product)
- Downstream: getting production to the customer

Advantages:
- share customer demand info
- notify of design modifications
- exchange design schematics
- increase processing speed
- reduce handling costs
- reduce human (re-key) error
- reduce and inform of defects

Challenges:
- Trust:
- costs

B2B Models & e-Marketplaces (fig 5-14)
Private stores: build website to specific customer
Customer Portals: accessed to ecommerce site, provide directory and search assistance
Industry Marketplaces: demand aggregation
Consortium Marketplaces: vendors get together to get lower prices
Private Company Marketplaces