sharing information across the supply chain dr. ron lembke
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SHARING INFORMATION ACROSS THE SUPPLY CHAIN
Dr. Ron Lembke
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Supply Chain TechnologiesASN -- lets customer know exactly what has been sent
Drop Shipping -- Supplier sends directly to the store, not to store’s warehouse
Computer sent to house via UPS
3PL: Third-party Logistics ProviderTrucking companies, manage inventories, anything you don’t want to do
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Bullwhip Effect
Lack of information sharing can cascade through the supply chain.Small changes at retail level lead to huge swings at manufacturing, like a bullwhipSeveral retailers order all at once, distributor thinks sales have jumped, orders a much bigger order, etc.Better: sales info shared along “Value Chain.”
Graph: Disney & Towill, 2006, Supply Chain Mgt: An Intl J
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Electronic Data Interchange
My computer talks to yours, tells you exactly what I want to order, whenYou fill out a form, very compressed message sent, viewed as formSoftware, hardware expensive to implement
Sample Purchase TransactionST88850*1 Transaction Set identifierBEG*00*NE*00498765**010698 Beginning of SegmentPID*X*08*MC**Large Widget Description of ProductP01**5*DZ*4.55*TD Baseline Item DataCTT*1 Transaction TotalsSE*1*1 End of Segment
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XML
eXtensible Markup Language
Standard for E-BusinessXML provides self-describing information.Easier to implement or modify than EDI.Expected to eventually, replace EDI, but not nearly as fast as was expected.Standardization through RosettaNet efforts
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XBRL
Standardized set of tags for financial transaction
Identifies data as being Q3 EBITDA, 2011, for WidgetCo.
No rekeying, fewer errors, easier research
2009 - SEC required for external reporting, 500 largest public cos.
XBRL.org
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Video conferencingNothing can go wrong now
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Summary
Bullwhip effect: small changes can have huge consequences
Sharing information can be very valuable
Technologies:EDI, XML, XBRL
Importance of face to face