Supply Chain Integration Xiaohong Pang Automation Department Shanghai Jiaotong University
Supply Chain Integration Xiaohong Pang Automation Department Shanghai Jiaotong University
Lecture Outline Introduction Push,Pull,and Push-Pull Systems The Impact of the Internet on Supply Chain Strategies
Lecture Outline Introduction Push, Pull, and Push-Pull Systems The Impact of the Internet on Supply Chain Strategies
Impact of the Internet on Supply Chain Strategies The influence of the Internet and e- commerce on the economy in general and business practice in particular has been tremendous.Changes are happening rapidly: Direct business model Enables customers to order products over the Internet Allows companies to sell their products without relying on Third-Party distributors (e.g.,Dell Computers and Amazon.com)
Impact of the Internet on Supply Chain Strategies The influence of the Internet and ecommerce on the economy in general and business practice in particular has been tremendous. Changes are happening rapidly: Direct business model Enables customers to order products over the Internet Allows companies to sell their products without relying on Third-Party distributors (e.g., Dell Computers and Amazon.com)
Impact of the Internet on Supply Chain Strategies Changes are happening rapidly: Business to business e-commerce promises convenience and cost reduction The Internet and the e-business models have produced expectations t that many supply chain problems will be resolved merely by using these new technology and business models
Changes are happening rapidly: Business to business e-commerce promises convenience and cost reduction Impact of the Internet on Supply Chain Strategies The Internet and the e-business models have produced expectations that many supply chain problems will be resolved merely by using these new technology and business models
Impact of the Internet- Expectations Were High E-business strategies were supposed to: ■Reduce cost Increase service level Increase flexibility ·Increase profit In reality,these expectations have gone unmet because many of the new e-businesses have not been successful
Impact of the Internet – Expectations Were High E-business strategies were supposed to: Reduce cost Increase service level Increase flexibility Increase profit In reality, these expectations have gone unmet because many of the new e-businesses have not been successful
Example 6-8,6-9 Take 2 min.to consider example 6-8,6-9, think about the questions below. 1.Whether does e-business model fit the companies? 2.Why? Pull H I II IV III Push L L H Pull Push
1. Whether does e-business model fit the companies? 2. Why? Example 6-8, 6-9 Take 2 min. to consider example 6-8, 6-9， think about the questions below. Pull Push Pull Push I II IV III L H H L
Reality is Different ..... Amazon.com Example Founded in 1995;1st Internet purchase for most people ■1996：$16 M Sales,$6 M Loss ■1999：$1.6 B Sales,$720 M Loss ■2000：$2.7 B Sales,$1.4 B Loss Last quarter of 2001:$50M Profit,Total debt:$2.2B Peapod Example ■Founded in1989 140,000 members,largest on-line grocer Revenue tripled to $73 million in 1999 1st Quarter of 2000:$25M Sales,Loss:$8M
Reality is Different …… Amazon.com Example Founded in 1995; 1st Internet purchase for most people 1996: $16M Sales, $6M Loss 1999: $1.6B Sales, $720M Loss 2000: $2.7B Sales, $1.4B Loss Last quarter of 2001: $50M Profit, Total debt: $2.2B Peapod Example Founded in 1989 140,000 members, largest on-line grocer Revenue tripled to $73 million in 1999 1st Quarter of 2000: $25M Sales, Loss: $8M
Example 6-6 Take 2 min.to consider example 6-6, think about the questions below. Analyze the example using the framework we have Pull ↑H II learnt before,consider: 1. Which of the strategies, push,pull,push-pull,or pull- push,fits the furniture IV III Push L company? 2. What were the main reasons L H for its downfall? Pull Push
Analyze the example using the framework we have learnt before, consider: 1. Which of the strategies, push, pull, push-pull, or pullpush, fits the furniture company? 2. What were the main reasons for its downfall? Example 6-6 Take 2 min. to consider example 6-6， think about the questions below. Pull Push Pull Push I II IV III L H H L
Reality is Different ..... Furniture.com Example launched in 1999,with thousands of products $22 Million in sales the first nine months n( Over 1,000,000 visitors per month n Died November 6,2000 Pul↑H II Logistics costs too high IV III PushL H Pull Push
Furniture.com Example launched in 1999, with thousands of products $22 Million in sales the first nine months Over 1,000,000 visitors per month Died November 6, 2000 Logistics costs too high Reality is Different …… Pull Push Pull Push I II IV III L H H L
Successful Cases Dell Example Dell Computer has outperformed the competition in terms of shareholder value growth over the eight years period,1988- 1996,by over3,000%. Think-Pair-Share Take 2 min.to consider the two questions: What did Dell do?What can we learn anything from Dell and perhaps apply to other industry? (See Anderson and Lee,1999)
Dell Example Dell Computer has outperformed the competition in terms of shareholder value growth over the eight years period, 1988- 1996, by over 3,000%. Successful Cases …… (See Anderson and Lee, 1999) Think – Pair – Share Take 2 min. to consider the two questions: What did Dell do? What can we learn anything from Dell and perhaps apply to other industry?