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E-Procurement and Supply Chain - Assignment Example

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This paper aims to answer the question how SCM system help to improve manufacturing and product delivery to customers. Also, it will explain what is Business Model and relate it to Internet Company…
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E-Procurement and Supply Chain
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? E-Procurement and Supply Chain No: Question Number How SCM system help improve manufacturing and product delivery to customers? Supply Chain Management involves the flow of materials, information, and finances as they move in a stage procedure from provider, to producer, to wholesaler / store, to store, and lastly to the customer. SCM includes managing and developing these moves among all organizations engaged each stage of the chain is described as a “tier.” There can be several levels within the ultimate provider. Focusing on certain areas within the chain can reduce costs. There might be periods when purchasing in bulk is cost effective (Mentzer et al 2006). Manufacturing Source Preparing (MRP) as part of SCM can help plan and figure out the needs and timeframes for new development procedures to be able to estimate item distribution daily activities, and reply to changes in the marketplace or item. It is an application based development planning and inventory control system used to handle manufacturing procedures (Blanchard 2010). Before the internet came along, the ambitions of supply chain application enthusiasts were restricted to enhancing their capability to estimate demand from customers and create their own supply chain run more easily. But the cheap, popular characteristics of the internet, along with its simple, globally approved interaction requirements, have tossed things open up (Blanchard 2010). Now, organizations can link their supply chain with the supply chain of their providers and clients together in a single wide system that improves expenses and possibilities for everyone engaged. This was the reason for the B2B explosion; the idea that everyone a company does business with could be linked together into one big satisfied, supportive family (Simchi-Levi 2007). Of course, truth isn't quite that satisfied and supportive. But these days most organizations discuss at least some data with their supply chain associates. The objective of these tasks is higher supply chain exposure. The supply chain in most sectors is like a big card game: the gamers don't want to show their bank cards because they don't believe in anyone else with the details, but if they revealed their hands they could all benefit (Cooper et al 1997). Suppliers wouldn't have to think how many raw components to purchase, and producers wouldn't have to purchase more than they need from providers to create sure they have enough on side if need for their products suddenly improves. And suppliers would have less vacant racks if they distributed the details they had about income of a company's item in all their shops with the maker (Petrovic-Lazarevic et al 2007). The internet makes displaying your side to others possible, but hundreds of years of mistrust and lack of synchronization within sectors create it difficult (Jacoby 2009.). The benefit of appropriate and precise supply chain details is the capability to create or deliver only as much of an item as there is an industry for. This is the exercise known as just-in-time manufacturing, and it allows organizations to decrease the amount of inventory that they keep. This can cut expenses considerably, since you no longer need to pay to generate and store unwanted products. But many organizations and their supply chain associates have a long way to go before that stage of supply chain versatility can be carried out (Jacoby 2009). The benefits from business resource planning are stated to include: lower inventory holding costs lower purchasing costs lower development costs lower bookkeeping and documentation costs lower transport costs lower investment in equipment lower investment in plant lower investment in land reduced assembly-line down-times more versatile manufacturing processes more effective lot styles and scheduling reduced mistakes due to better coordination the cost and efficiency improvements (mentioned above) could increase profitability or increase market share (at a lower price) reduced number of stock-outs reduced fulfillment times increase procedure visibility for the customer allow higher item personalization, and thereby better go with the actual needs of the customer Client care upgrades (mentioned above) could improve product income, improve income revenue (due to a higher effective price, i.e. - no discounts), improve business, and improve profitability One of the key features of supply chain management is exposure where details discussing between different members of provide sequence is possible, leading to work together on preparing in primary and additional procedures (Mentzer et al 2006) Supply Chain Planning offers immediate details discussing and hence it is possible to provide control cooperation among different members of provide sequence. Information discussing not only removes the ‘silo effect’ when details is not distributed, but also provides additional profit by assigning economic source more effectively. Therefore, by providing exposure within the provide sequence, providers no longer need to think how much raw components to purchase and producers do not have to purchase more than what they need from providers to ensure enough raw components are on hand in case future demand develops suddenly. In the same way, suppliers do not have vacant racks or excess shares if they share their sales details with producers (Petrovic-Lazarevic et al 2007). Supply Chain Performance is designed for company automated, which indicates changing and reducing guide work involved in company procedures. Automated company information exchange within the provide sequence way for example, automated invoicing, purchase process and payments. Therefore, businesses can save on time, handling costs; reduce stock level and human mistake in computer. The mixture of Extranet and Supply Chain Performance could present automated tracking and examining ability to the provider for the products or services they are providing, thus guaranteeing quality popularity. Company automated introduced by Provide Sequence Management brings significant saving in money, while ensuring quality products or services are delivered through supply chain with speed and without errors. Therefore, a world of business with no manufacturing facilities, no inventory and no paper invoice could be achieved under SCM (Petrovic-Lazarevic et al 2007). SCM also helps the company to increase the forecasting accuracy and to increase the responsiveness in meeting customer demand. This system also provides the company to improve their order processing and other operational activities which in return will improve level of sales performance (Mentzer et al 2001). A study shows that the firms must imply some important managerial activities. Firstly, improve internal process and make inter functional coordination through different strategies. This high level of internal integration is a pre requisite for firms before they synchronize their activities with customer and suppliers. Secondly, firm should update itself with effective development of IT. This will help in coordinating with supply chain partners. Third, firm should improve employee’s skills to accept changing competitive environment (Kouvelis et al 2006). Question Number 4: Explain what a Business Model is and relate it to any Internet Company. A business model is something that shows the working of a business that how a company uses to make money from its business operations. In business world, innovation is the key to success and each element of business needs to get improved with the passage of time (Seddon & Lewis 2003). The making of business model is so simple and easy that it can be created with 9 basic building blocks. This 9 building block’s model is known as “business model canvas” and it is very famous among the management as most of the businesses adepts this model for their business. In the meetings of managements and heads, they use to discuss on the question that which type of business model will suit their business (Seddon & Lewis 2003). Since, these people know the importance of the business model in the world of business. It has the following points: The value proposition of what is offered to the market; The segment(s) of clients that are addressed by the value proposition; The communication and distribution channels to reach clients and offer them the value proposition; The relationships established with clients; The key resources needed to make the business model possible; The key activities necessary to implement the business model; The key partners and their motivations to participate in the business model; The revenue streams generated by the business model (constituting the revenue model); The cost structure resulting from the business model. Business Models & Innovation In business world, innovation is the key to success and each element of business needs to get improved with the passage of time. At the same time, the term business model is very closely related to the innovation and new ideas. The business model concept always needs to be improving and change as per the demand, nature of business and market value of the product of the company. When mobile phones appeared in the market they offered a different value proposition than fixed line phones. In the early days of the Internet popular indexes like Yahoo, Google and Amazon! All these sites have helped a lot of people finding useful information on the Web and getting online web services. As regards of the target customer segments, a low-cost airline like Easy Jet did and has brought many flying to the masses. Dell became really successful by exploring the web as a distribution channel. Gillette has made a fortune by establishing a continuous relationship with customers based on its disposable razors (Weill, et al 2005). Apple Inc has resurged based on its values and competitive advantages in order to bring new and innovative and latest designs in the fields of computers and electronic gadgets. Cisco has also got a high valued place in the world because of its most efficient and effective Business Model in order to give innovative supply of its products to its valued customers. Intel is another best example of those businesses that have earned a high fame because of its outstanding services (Weill, et al 2005). Business Model basically comes under the umbrella of the Business Level Strategy. Business level strategy is a group of actions which a company adapts to give more value added products and services to the customers and also for gaining strong competitive advantage in the market. The revised strategy announced by the company includes all those major steps which will help to give more value to the customers and latest Business model is one of those elements. As business model and business strategy are much connected and helps companies a lot moving towards the development. Company’s strategy should lead the competitive environment inside the company and helps in competition to competitors with full confidence (Osterwalder, et al 2005). A business strategy has a wider scope and it can have one or more business models to excel the production and increase profitability of our products. At any company, to excel the products we have developed an outstanding business model which will help our strategy move smoother (Osterwalder, et al 2005). Strategy has been made keeping in view the strengths and weaknesses of the company, to make better use of strengths and overcome the weaknesses to convert them in strengths. The great strategy maker has developed latest business strategy with the help of all those five forces which are elaborated by the Porter in 1996. Along with the business model, a model has been made for empowering the suppliers and buyer capability has been kept in view. Affordable prices of caterpillar’s products are a proof of this. Moreover, strategies have been made for the new entries in same business line and availability of substitute and degree of rivalry has been measured. The companies who have decided to maintain their profitability, all the costs should be measured carefully to give best price products to the customers. For managers and executives of any organization, business model is one of the most important elements and it means that they have a whole new range of opportunities and possible resource allocations to design their businesses in a better way and better direction. This procedure ultimately results in innovative, high quality and competing production and high class products with the help of effective business models in the same industries. Prior to it used to be sufficient to say in what industry you where in, for somebody to understand what your company was doing. Today it is not sufficient to choose a lucrative industry, but you must also design a competitive business model. In addition, increased competition and rapid copying of successful business models forces all players to continuously innovate and adapt their business model to gain and/or sustain a competitive edge (Malone et al 2006). Apple Inc has resurged based on its values and competitive advantages in order to bring new and innovative and latest designs in the fields of computers and electronic gadgets. Cisco has also got a high valued place in the world because of its most efficient and effective Business Model in order to give innovative supply of its products to its valued customers. Intel is another best example of those businesses that have earned a high fame because of its outstanding services. Business Model of an Internet Company: Amazon Amazon was founded in 1994 Founded in 1994 in Seattle, USA and currently it has up to 28,300 employees working with its online internet and shopping services. Amazon is the Global leader in e-commerce and a best internet company which has a wide range of products for its customers which all are available on very affordable price and shipment offer. Amazon has the ability of worldwide networking of fulfillment and mass customization. The feedback from the customer’s experience has ranked the Amazon as the best online service provider and a company with high quality products (Amazon.com 2012). Mission of company ‘To leverage technology and the expertise of our invaluable employees to provide our customers with the best shopping experience on the Internet’ (Amazon.com 2012). It is clear from the mission statement of the Amazon to increase the power and use of latest technology and giving amusing online shopping experience. Vision of company ‘To be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online’ (Amazon.com 2012). Values of company Customer Obsession is the primary value of the company and brining new Innovations and ideas in the world. Amazon is not biased for any action and clients are always welcomed to visit this online shopping service free of cost. The great and leading ownership of the company is its greatest value along with the high hiring bar is an edge. Objective of company ‘Not to discount a small number of products for a limited period of time, but to offer low prices everyday and apply them broadly across our entire product range.’ (Amazon.com 2012) Strategy and Business Model adopted by Amazon: ‘To ‘Get Big Fast’ by investing aggressively in new product categories and new businesses, by spending money on brand awareness and getting new customers.’ (Amazon.com 2012) Business Model is the key of any company’s growth and the growth of the company depends upon many factors which have been kept in view by the Business Model developers. Customer experience, traffic on website, seller, lower prices of products and the lower cost of the products are those basic elates which Amazon has considered to create its Business Model. Business Model Canvas Business Model of Amazon is based upon the 9 building blocks which are: Customer Segment Revenue Streams Cost Structure Key Resources Customer Relationship Key Partnerships Channels Key Activities Value Proposition EBooks/Kindle: "Our vision is to have every book ever printed, in any language, all available in tinder 60 seconds. “ - Jeff Bezos, Amazon.com CEO Amazon does 80% of eBook market and Kindle eBooks add 35% to a physical book’s sale on Amazon. Consider Amazons corporate evolution: as soon as it established itself as a leading online book seller it began leveraging the platform and infrastructure it built to move into new categories, and in a matter of years became a full-fledged online department store and the webs premiere retailer (Zott, et al 2010). For managers and executives of any organization, business model is one of the most important elements and it means that they have a whole new range of opportunities and possible resource allocations to design their businesses in a better way and better direction. This procedure ultimately results in innovative, high quality and competing production and high class products with the help of effective business models in the same industries. Prior to it used to be sufficient to say in what industry you where in, for somebody to understand what your company was doing. Amazon has also increased its online real estate and customer base, establishing itself as a broker of transactions and leaser of web space to other retailers. These profitable initiatives have generated synergies that fortify Amazons core business selling other merchants books, for example, vastly expands Amazons catalog, making the site ever more of a one-stop shop while contributing to the overall growth of the business. Bibliography Amazon.com (2012). Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & More. [Online]. Available at: http://www.amazon.com. [Accessed 18 October 2012]. Blanchard, D (2010). Supply Chain Management Best Practices. 2nd Ed. New York: John Wiley & Sons. Cooper, M.C., Lambert, D.M., & Pagh, J (1997). Supply Chain Management: More Than a New Name for Logistics. The International Journal of Logistics Management . 8 (1), 1-14. Jacoby, D (2009). Guide to Supply Chain Management: How Getting it Right Boosts Corporate Performance. New York: Bloomberg Press.  Kouvelis, P., Chambers, C. & Wang, H (2006). Supply Chain Management Research and Production and Operations Management: Review, Trends, and Opportunities. Production and Operations Management, 15 (3), 449–469. Malone, Thomas W., Weill, P., Lai, Richard K., D'Urso, Victoria T., Herman, G., Apel, Thomas G. & Woerner, Stephenie L (2006). Do Some Business Models Perform Better than Others?. [Online]. Available at: http://seeit.mit.edu/Publications/BusinessModelsPerformance12July2006.pdf [Accessed 18 October 2012]. Mentzer, John T., Stank, Theodore P. & Myers, Matthew B (2006). Why Global Supply Chain Managment? [Online]. Available at: http://endoc.net/PDF2/0022.pdf [Accessed 19 October 2012]. Mentzer, John T., DeWitt, W., Keebler, James S., Min, S., Nix, Nancy W., Smith Carlo D. & Zacharia, Zach G (2001). Defining Supply Chain Management, Journal of Business Logistics, 22 (2) 1–25. Osterwalder, A., Pigneur, Y. & Tucci, C. T (2005). Clarifying Business Models: Origins, Present, And Future Of The Concept. Communications of AIS 15(1), 1-40. Seddon, Peter B. & Lewis, Geoffrey P (2003). Strategy and Business Models: Strategy and Business Models: what's the difference?. [Online]. Available at http://www.pacis-net.org/file/2003/papers/e-business/219.pdf [Accessed 19 October 2012]. Petrovic-Lazarevic, S., Sohal, A. & Baihaqi, I (2007). Supply chain management practices and supply chain performance in Australian manufacturing industry. [Online]. Available at: http://www.buseco.monash.edu.au/mgt/research/working-papers/2007/wp21-07.pdf [Accessed 19 October 2012]. Simchi-Levi, D., Kaminsky, P. & Simchi-levi, E (2007). Designing and Managing the Supply Chain. 3rd Ed. Boston: Mcgraw Hill. Weill, P., Malone, Thomas W., D'Urso, Victoria T., Herman, G. & Woerner, Stephenie L (2005). Do Some Business Models Perform Better than Others? A Study of the 1000 Largest US Firms.[Online]. Available at: http://ccs.mit.edu/papers/pdf/wp226.pdf [Accessed 18 October 2012]. Zott, C., Amit, R. & Massa, L (2010). The Business Model: Theoratical roots, recent developments, adn future research.[Online]. Available at: http://www.iese.edu/research/pdfs/DI-0862-E.pdf [Accessed 18 October 2012]. Read More
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