Electronic Business: Concepts, Methodologies, Tools, and Applications (4-Volumes) P57 pot

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Electronic Business: Concepts, Methodologies, Tools, and Applications (4-Volumes) P57 pot

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494 Procedure for Modeling and Improving E-SCM Processes RUJDQL]DWLRQDOLQWHUGHSHQGHQFLHVLGHQWL¿FDWLRQ of inter-organizational interdependencies, and decomposition structure of inter-organizational interdependencies. Structured Presentation of Processes $VLWV¿UVWFRQWULEXWLRQ,'()SURYLGHVDJRRG overview of the input, output, control, and mecha- nism objects within the supply chain operation aspect (see Figure 7). Using IDEF0, a process is presented to show what data or materials are consumed, what data or materials are produced, data that constrain or regulate the process, and also the resources (people, machines or systems) that carry out the process. ,GHQWL¿FDWLRQRIOrganizational Interdependencies IDEF0 technique gives not only a good overview of input, output, control, and mechanism for each entity of the process, but also overviews the relationship between each entity linked by these objects. The relationships created by these links assist companies in identifying four types of interdependencies, which are listed below. Interdependencies from the Relationship Linked by Inputs These interdependencies occur when the same data, materials, or any other inputs that are con- sumed to produce an output of a process are needed by different processes (see Figure 8). Interdependencies from the Relationship Linked by Input and Output Objects Once the data or materials are consumed to a process, they transform into outputs. These outputs are needed by another process, which causes the interdependencies in a range of ways, as presented in Figure 9. Interdependencies from the Relationship Linked by Output and Control Data and information that form an output of a process can also become a constraint or control of other processes. These transformations of outputs into control factors result in the output-control interdependencies between processes, as shown in Figure 10. Interdependencies from the Relationship Linked by Resources Organization entities in the supply chain network are interconnected to exchange critical resources, such as raw materials, labor, access to markets, specialized skills, and knowledge (Tillquist, 2002). The resource interdependencies in the sup- ply chain process occur when different processes need to use or share the same resources (including Figure 7. IDEF0 structured presentation of process Process A1 Output Input Control Resource Figure 8. Interdependencies from the relationship linked by inputs Process A1 Process A2 In p ut 495 Procedure for Modeling and Improving E-SCM Processes Figure 9. Interdependencies from the relationship linked by input and output A B C Process A1 Process A2 Output In p ut In p ut Process A1 Process A2 Out p ut Process A3 Input In p ut Process A1 Process A2 Output In p ut Figure 10. Interdependencies from the relationship linked by output and control Process A1 Process A2 Out p ut In p ut Control Figure 12. Organizational interdependencies using IDEF0 Supplier Oi+1 Com pany Oi Customer Oi-1 Controls Inputs Outputs Resources Process A1 Process A2 Resources Figure 11. Interdependencies from the relationship linked by resources 496 Procedure for Modeling and Improving E-SCM Processes information), as shown in Figure 11. Managing these inter-organizational dependencies requires the use of information technology (IT) to tightly integrate partner relations by binding operational functions, processes, strategic plans, and knowl- edge (Tillquist, 2002). An example of organizational process in- terdependencies including input, input-output, output-control, and resources interdependencies is exhibited in Figure 12. The company (denoted as organization Oi in Figure 11) performs the top- level supply chain processes based on the SCOR model divided into: plan, source, make, deliver, and return. Each of these processes has its own input, output, control, and mechanism involved in the processes. The relationships linked by connec- tion of the input, output, control, and mechanism create the interdependencies within the entity of the supply chain. 7KH LGHQWL¿FDWLRQ RI WKHVH RUJDQL]DWLRQDO interdependencies helps companies to avoid and reduce dependencies when they analyze and design processes. Companies can also manage those interdependencies that cannot be avoided for better coordination in their organization. Decomposition Structure of Organizational Interdependencies The third contribution of IDEF0 is based on the decomposition structure of IDEF0. IDEF0 allows the decomposition of process into various hierar- chical detailed levels. This feature makes IDEF0 an ideal technique for modeling processes based on the SCOR four-level procedure. Figure 13 shows the decomposition of organi- zation Oi from organization level to top level and level 1, respectively. From this decomposition, the GHWDLORILQWHUGHSHQGHQFLHVFDQEHPRUHVSHFL¿- cally observed at the extended level; for example, level 1 extends to level 2, and level 2 extends to level 3 of the SCOR model. ,GHQWL¿FDWLRQRIInter-Organizational Interdependencies ,GHQWL¿FDWLRQ RI LQWHURUJDQL]DWLRQDO LQWHUGH- pendencies is the extended scope of the second contribution of ,'()LGHQWL¿FDWLRQRIRUJDQL- zational interdependencies). At the organizational OHYHO,'()LGHQWL¿HVWKHUHODWLRQVKLSRILQSXW output, control, and resources between processes within the company. Utilizing a combination of SCOR and IDEF0 at the inter-organizational level helps organizations identify and manage interde- pendencies occurring in and between processes. This ultimately leads to coordination of the entire supply chain. The example of identifying interde- pendencies between organizations based on SCOR and IDEF0 is exhibited in Figure 14. 2UJDQL]DWLRQDOLQWHUGHSHQGHQFLHVLGHQWL¿FD- tion results in the recognition of interdependen- cies within organizations. Inter-organizational LQWHUGHSHQGHQFLHVLGHQWL¿FDWLRQLQDGYDQFHKHOSV companies to recognize the links and relationships between organizations. This eventually consti- tutes supply chain integration and coordination. Decomposition Structure of Inter-Organizational Interdependencies 7KH¿IWKFRQWULEXWLRQRI,'()GHFRPSRVLWLRQRI structure of inter-organizational interdependen- cies, is based on the combination of process decom- position and inter-organization interdependencies relationship presentation. The decomposition of process to the detailed level between organizations allows companies to enter into the consideration OHYHORILQWHUGHSHQGHQFLHVLGHQWL¿FDWLRQEHWZHHQ them. This will also facilitate companies to keep these interdependencies at a manageable level for the goals of supply chain improvement. Figure 15 displays the example of decompo- sition at two organizations, a company (Oi) and 497 Procedure for Modeling and Improving E-SCM Processes Figure 13. Decomposition of organizational business process O 2 O 4 O 5 O 7 O 3 O 1 O 6 C1 M4 M3 M2 M1 I1 I2 I3 P5: Plan Return A15 P4: Plan Deliver A14 P3: Plan Make A13 P2: Plan Source A12 P1: Plan Supply Chain A11 Return Plans Production Requirements Return Plan Schedule Source Requirements Point of Sale Data (daily) Vendor Lead Time/ Transit Time Delivery Plans Stocking Requirements Inventory Availability Production Plans Sourcing Plans Customer Requirements Order Backlog, Shipments Establish and Communicate Supply Chain Plans Customer Replenishment Signal Supplier Inventory Avilability Supply Chain Plans Capacity Requirements Routings Service LevelsGovernment Regulations Customer Budget Systems Staff Supplier Planning Decision Policies Inventory Strategies No d e: A1 Tit le: Sup p ly Chain Oper at io n Number: Used at : A uthor: Date: Pro ject : Rev: Notes: 1 2 3 4 5 6 7 8 9 10 Time: Working READER Date Draft Recommended Publication Co nt ext Supplier Oi+1 Company Oi Customer Oi-1 Controls Inputs Outputs Resources No d e: A0 Tit le: Sup p ly Chain Oper at io n Number: Used at : A uthor: Date: Pro ject : Rev: Notes: 1 2 3 4 5 6 7 8 9 10 Time: Working READER Date Draft Recommended Publication Co nt ext O 4 I3 O 7 I2 I1 O 6 O 5 C4 C5 O 1 O 3 C3 O 2 C2 M2 C1 M1M3 M4M5 I4 I5 R: Return A5 D: Deliver A4 M: Make A3 S: Source A2 P: Plan A1 Return Product Authorization Product Replacement Data Return Shipment Receipt Transaction Customer Inquiry Customer Order Replenishment Signal Validated Order Payment Delivered End Items Shipments Shipping Documents Inventory Availability Production Schedule Finished Product Release Product Location Information Product Release Supplier Agreement Customer Requirements Sourcing Plans Production Plans Delivery Plans Supply Chain Plans Return Plans Production Requirements Supplier Inventory Avilability Customer Replenishment Signal Capacity Requirements Warranty Data Manage Regulatory Return Policy Routing Guide Rated Carrier Data Deliver Contract Terms Inventory Level WIP Location Rules Equipment and Facilities Schedules and Plans Tariffs and Duties Supplier Government Regulations Customer Systems Budget Staff No d e: A0 Tit le: Sup p ly Chain Oper at io n Number: Used at : A uthor: Date: Pro ject : Rev: Notes: 1 2 3 4 5 6 7 8 9 10 Time: Working READER Date Draft Recommended Publication Co nt ext SCOR: Supply Chain Management A0 Customer Requirements Customer Order Customer Inquiry Supplier Inventory Avilability Customer Replenishment Signal Finished Product Release Inventory Availability Product Location Information Replenishment Signal Shipping Documents Delivered End Items Shipments Government Regulations Tariffs and Duties Inventory Level Customer Supplier Systems Budget Staff Routing Guide Deliver Contract Terms 498 Procedure for Modeling and Improving E-SCM Processes LWV FXVWRPHU 2L 7KH ¿JXUH LOOXVWUDWHV WKDW at the inter-organizational level, there are many interdependencies occurring. One is caused by WKHLQSXWRXWSXWUHODWLRQVKLS7KH¿JXUHVKRZV that one input customer replenishment signal of company (Oi) is derived from the output that was created by customer (Oi-1). With decomposi- tion to level 1, it can be found that the customer replenishment signal is actually produced from deliver process in customer organization, and it goes to plan process in the company organization. If the company further decomposes its plan pro- cess to level 2, it can be found that this customer replenishment signal is needed as an input to all processes in the level including: plan supply chain, plan source, plan make, plan deliver, and plan return. Figure 14. Detailed inter-organization using IDEF0 technique SCOR (Oi-1):customer A3 SCOR (Oi):company A2 SCOR (Oi+1):supplier A1 Customer Requirements Customer Replenishment Signal Customer's Order Customer's Inventory Availability Customer Shipment Customer Shipping Document Company Requirements Company Inventory Availability Company Replenishment Signal Company Shipment Company's Order Company Supply Chain Plan Company Shipping Document Supplier Inventory Availability Supplier's Finished Product Release Supplier Shipment Supplier Supply Chain Plan Supplier's Replenishment Signal Supplier Shipping Document Customer's Customer Customer's Customer Inventory Level Supplier Customer Customer Inventory Level Government Regulations Budgets Systems Company Supplier's Supplier Company Inventory Level Routing Guide Node: A0 Title: Supply Chain Operation Number : Used at: Author: Date: Project: Rev: Notes: 1 2 3 4 5 6 7 8 9 10 Time: Working REA DER Draf t Recommended Public ation Context Supplier Oi+1 Company Oi Customer Oi-1 Controls Inputs Outputs Resources 499 Procedure for Modeling and Improving E-SCM Processes Figure 15. Decomposition structure of inter-organizational interdependencies Node: A0 Title: Supply Chain Operation Number: Used at: A utho r: Dat e: P ro ject : Rev : No tes: 1 2 3 4 5 6 7 8 9 10 Ti Wo rk in g REA DER Dat e Draft Reco mmended Publicatio n Co nt ex O 4 I3 O I2 I1 O O C4 C5 O O C3 O C2 M2 C1 M1M3M4M5 I4 I5 R: Return A5 D: Deliver A4 M: Make A3 S: Source A2 P: Plan A1 Return Product Authorization Product Replacement Data Return Shipment Receipt Transaction Customer Inquiry Customer Order Replenishment Signal Validated Order Payment Delivered End Items Shipments Shipping Documents Inventory Availability Production Schedule Finished Product Release Product Location Information Product Release Supplier Agreement Customer Requirements Sourcing Plans Production Plans Delivery Plans Supply Chain Plans Return Plans Production Requirements Supplier Inventory Avilability Customer Replenishment Signal Capacity Requirements Warranty Data Manage Regulatory Return Policy Routing Guide Rated Carrier Data Deliver Contract Terms Inventory Level WIP Location Rules Equipment and Facilities Schedules and Plans Tariffs and Duties Supplier Government Regulations Customer Systems Budget Staff Node: A0 Title: Supply Chain Operation Number: Used at : A ut hor : Dat e: P r oj ect : Rev: Not es: 1 2 3 4 5 6 7 8 9 10 T i me: Wor king READER Date Dr af t Recommended Publ i cati on Cont ext O 4 I3 O 7 I2 I1 O 6 O 5 C4 C5 O 1 O 3 C3 O 2 C2 M2 C1 M1M3 M4M5 I4 I5 R: Return A5 D: Deliver A4 M: Make A3 S: Source A2 P: Plan A1 Return Product Authorization Product Replacement Data Return Shipment Receipt Transaction Customer Inquiry Customer Order Replenishment Signal Validated Order Payment Delivered End Items Shipments Shipping Documents Inventory Availability Production Schedule Finished Product Release Product Location Information Product Release Supplier Agreement Customer Requirements Sourcing Plans Production Plans Delivery Plans Supply Chain Plans Return Plans Production Requirements Supplier Inventory Avilability Customer Replenishment Signal Capacity Requirements Warranty Data Manage Regulatory Return Policy Routing Guide Rated Carrier Data Deliver Contract Terms Inventory Level WIP Location Rules Equipment and Facilities Schedules and Plans Tariffs and Duties Supplier Government Regulations Customer Systems Budget Staff Node: A0 Title: Supply Chain Operation Number: Used at: A uthor: Date: Project: R Workin g READER Draf t Recommended Publication Contex t SCOR (Oi-1):customer A3 SCOR (Oi):company A2 SCOR (Oi+1):supplier A1 Customer Requirements Customer Replenishment Signal Customer's Order Customer's Inventory Availability Customer Shipment Customer Shipping Document Company Requirements Company Inventory Availability Company Replenishment Signal Company Shipment Company's Order Company Supply Chain Plan Company Shipping Document Supplier Inventory Availability Supplier's Finished Product Release Supplier Shipment Supplier Supply Chain Plan Supplier's Replenishment Signal Supplier Shipping Document Customer's Customer Customer's Customer Inventory Level Supplier Customer Customer Inventory Level Government Regulations Budgets Systems Company Supplier's Supplier Company Inventory Level Routing Guide O O 4 O O O O O C1 M4M3M2 M1 I1 I2 I3 P5: Plan Return A15 P4: Plan Deliver A14 P3: Plan Make A13 P2: Plan Source A12 P1: Plan Supply Chain A11 Return Plans Production Requirements Return Plan Schedule Source Requirements Point of Sale Data (daily) Vendor Lead Time/ Transit Time Delivery Plans Stocking Requirements Inventory Availability Production Plans Sourcing Plans Customer Requirements Order Backlog, Shipments Establish and Communicate Supply Chain Plans Customer Replenishment Signal Supplier Inventory Avilability Supply Chain Plans Capacity Requirements Routings Service LevelsGovernment Regulations Customer Budget Systems Staff Supplier Planning Decision Policies Inventory Strategies Node: A1 Title: Supply Chain Operation Number: Used at: A utho r: Dat e: P ro ject : Rev : No tes: 1 2 3 4 5 6 7 8 9 10 Ti Wo rk in g REA DER Dat e Draft Reco mmended Publicatio n Co nt ex Inter-organisation Level Organizational Level: To p Level ( Level 1 ) Organizational Level: To p Level ( Level 2 ) 500 Procedure for Modeling and Improving E-SCM Processes Step 3: Benchmarking and Identifying Best Practices Business process benchmarking and the selec- WLRQRIEHVWSUDFWLFHVDUHLGHQWL¿HGDVWKHWRROV for supply chain improvement. The SCOR model provides a list of best-in-class practices for each process element. However, SCOR best-in-class practices are generic lists. A best practice that has D V L J Q L ¿F D Q W H I IH F W R Q W K H S H U IR U P D Q F H RIDF H U W D L Q  stage and certain process in an organization may not necessarily have the same effect on other processes of the supply chain. Thus, in selecting a best practice to improve the entire supply chain, WKHHQWLUHÀRZRISURFHVVOLQNHGWRWKHSDUWQHUV VKRXOGEHFRQVLGHUHG)RUWKLVSXUSRVHWKH¿UVW level of the Web-based system introduced by Al- Hakim (2003) plays a major role. 7KH¿UVWOHYHORIWKH:HEEDVHGV\VWHPDOORZV an individual partner of an e-network to analyze, compare, and evaluate their practices with the practices of other partners of the e-network. The feature allows e-network partners or e-SCM ex- perts to simulate the effect of practices along the supply chain and to select practices that achieve the EHVWÀRZRIPDWHULDODORQJWKHVXSSO\FKDLQ Step 4: Gap Determination After selection of best practices which need to be applied from the previous step, a gap analysis is used to measure the current performance of each e-network partner with those targets desired to EHDFKLHYHGDQGWKHQWRGH¿QHWKHFKDQJHWKDWLV needed to be made to the process. Applying the alternative business improvement approaches with the aim of improving supply chain in this procedure is based on performance strategies. The business process reengineering (BPR) approach primarily aims to gain dramatic improvements, while the continuous process improvement (CPI) approach comprises improvements that are LQGLYLGXDOO\ VPDOO FRQ¿QHG ZLWKLQ IXQFWLRQDO boundaries. The CPI approach therefore focuses on improving the existing system by closing small performance gaps. Therefore, as depicted in Figure 16, if the performance gap is wide, substantial improve- ment and a high degree of change is needed at a VSHFL¿FVWDJH'UDPDWLFSURFHVVWUDQVIRUPDWLRQ is required for breakthrough performance change. In contrast, if the performance gap and degrees Figure 16. Gap determination for selecting BPI approaches Company (Oi) Supplier (Oi+1) Customer (Oi-1) : GAP Best Practices Applying CPIApplying BPR Applying CPI 501 Procedure for Modeling and Improving E-SCM Processes of change are small, incremental improvement is needed to achieve small but meaningful improve- ment in business results. Again, the Web-based system (in Al-Hakim, 2003) allows e-SCM experts to evaluate the action required for each e-network partner to take. CONCLUSION This research attempts to develop a procedure referred to as eSCM-I to improve supply chain business processes, taking into consideration the Internet and e-business communication WHFKQRORJLHV7KHSURFHGXUHLGHQWL¿HVSURFHVV interdependencies and managing supply chain coordination. The eSCM-I procedure uses the SCOR model for purposes of process standardization. This standardization step plays an essential role as a coordination mechanism to manage interdepen- dencies within a supply chain network. IDEF0 was selected to model SCOR business processes. The IDEF0 technique has been found suitable for the purpose of describing SCOR SURFHVVHVLQJHQHUDOZKHQWKHÀRZRILQIRUPD- tion and the independency relationships are to be considered. The IDEF0 method has the potential t o c ont r i but e a d d it i on al a sp ec ts th at a re not re pre - sented in the current SCOR models, resulting in a more comprehensive representation of supply FKDLQSURFHVVHV,'()LGHQWL¿HVWKHLQWHUGH- pendency relationships in terms of input, output, FRQWURODQGPHFKDQLVP7KLVLGHQWL¿FDWLRQLVYHU\ useful for effective modeling and management of the supply chain coordination. The SCOR model provides a list of best-in- class practices and features for each process ele- ment which allows individual trading partners to analyze, compare, and apply the best practices. However, there is no indication of how to select and apply the various alternative best practices at the microanalysis level. This research suggests WKHVXLWDELOLW\RIXVLQJWKHWUDGLWLRQDOÀRZFKDUWLQJ method for selecting best practices in the SCOR HQYLURQPHQWXVLQJD³JDSDQDO\VLV´DSSURDFK By identifying the gap between existing SUDFWLFHVDQGEHVWSUDFWLFHWKH¿QDOVWHSRIWKH eSCM-I procedure provides an introduction to improvement approaches such as business pro- cess reengineering (BPR) or continuous process improvement (CPI) from the holistic viewpoint. Ultimately, the SCOR-based eSCM-I procedure LQWURGXFHG LQ WKLV FKDSWHU SURYLGHG ¿YH PDLQ contributions to supply chain improvement, including structured presentation of processes, LGHQWL¿FDWLRQRIRUJDQL]DWLRQDOLQWHUGHSHQGHQFLHV decomposition structure of organizational interde- SHQGHQFLHVLGHQWL¿FDWLRQRILQWHURUJDQL]DWLRQDO interdependencies, and decomposition structure of inter-organizational interdependencies. REFERENCES Abbott, J. (2001). Data data everywhereand not a byte of use? 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The electronic supply chain: Its impact on the current and future structure of strategic alliances, partnerships and logistics leadership. International Journal of Physical Distribution & Logistics Management, 32(8), 703-719. This work was previously published in E-Supply Chain Technologies and Management, edited by Q. Zhang, pp. 1-21, copyright 2007 by Information Science Reference (an imprint of IGI Global). . deliver, and return. Each of these processes has its own input, output, control, and mechanism involved in the processes. The relationships linked by connec- tion of the input, output, control, and. OHYHO,'()LGHQWL¿HVWKHUHODWLRQVKLSRILQSXW output, control, and resources between processes within the company. Utilizing a combination of SCOR and IDEF0 at the inter-organizational level helps organizations identify and manage interde- pendencies. Carrier Data Deliver Contract Terms Inventory Level WIP Location Rules Equipment and Facilities Schedules and Plans Tariffs and Duties Supplier Government Regulations Customer Systems Budget Staff

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