SHARING INFORMATION ACROSS THE SUPPLY CHAIN Dr. Ron Lembke.
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SHARING INFORMATION ACROSS THE SUPPLY CHAIN
Dr. Ron Lembke
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
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
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
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
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
Video conferencingNothing can go wrong now
Summary
Bullwhip effect: small changes can have huge consequences
Sharing information can be very valuable
Technologies:EDI, XML, XBRL
Importance of face to face
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