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Dell supply chain and the impact of e commerce

Quote In the early 1980s, IBM faced a critical problem.

“E-Commerce Will Transform Supply Chain Management”

That was a mind-boggling logistical exercise. It involved hundreds of thousands of parts stocked in thousands of locations worldwide. Even as IBM executives wrestled with the issue, Morris Cohena Wharton professor of operations and information management, stepped up to help.

  1. Overall speaking, incorporating e-commerce into supply chain process could achieve the following advantages. Full text will be provided upon request.
  2. Dell demonstrates successful Intra-business e-commerce.
  3. In contrast, a busted hair dryer could probably wait an extra day for parts to be shipped from a distant central warehouse or disposed of altogether by providing the customer with a replacement product.

As the principal scientist working on the problem, he and a group of colleagues from Wharton helped IBM develop Optimizer, a decision-support system that let the computer giant map out a global parts supply chain. IBM was hardly an isolated case.

During the past two decades or more, Cohen has continued to study how companies use supply chains to support after-sales service operations in industries ranging from computers to automobiles. In the process, he says, he has learned fundamental lessons about the way such supply chains should be set up and managed. It would be a mistake for a company to set up a parts supply chain in the same way that it does its production supply chain.

You have to solve them by understanding the risk tradeoffs involved. Consider, for example, a component in a computer system used by air traffic controllers.

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If the air-traffic control system were to go on the blink, the results could be devastating. Ideally, the system should be repaired in minutes, if not seconds.

  1. Web Services facilitate B2B integration. Business-to-customer B2C sales are facilitated by standard shopping aids e.
  2. Like fulfilment, this is an area where the value proposition will drive radical change, but it will take time. The Impact of E-Commerce in Supply Chain Management The impact of e-commerce on the supply chain will be felt in how work is done, including how areas of the supply chain interact, and in how supply chains operate between company and geographic boundaries.
  3. At the end of this paper, it has been found that their is a huge impact of e-commerce industry on SCM distribution channel activities and it is quite different from the conventional supply chain which involves manufacturer, distributor, retailer and customer. If the air-traffic control system were to go on the blink, the results could be devastating.
  4. Its fast cycle of product development was based on a build-to-order e-business design. Impact of e-commerce on supply chain management.

Similarly, a stalled machine in a semiconductor fabrication plant could bring the entire manufacturing process to a standstill. Cohen explains that components for such critical products or services must be served by supply chains that differ dramatically from parts supply chains for non-critical products.

  • Information, Knowledge, Systems Management, 6 3 , 197-214;
  • This strategic option did not prove sustainable;
  • The integration of production planning, scheduling, and inventory control with procurement process makes the loop complete as illustrated in figure 1;
  • At the end of this paper, it has been found that their is a huge impact of e-commerce industry on SCM distribution channel activities and it is quite different from the conventional supply chain which involves manufacturer, distributor, retailer and customer;
  • The broadening of e-commerce will be a gradual process, phased in over time; it will involve a lot of hard work;
  • This paper is origin and empirical study that would be a contribution to business practitioners and academia.

Another key issue, according to Cohen, is determining the locations in the supply chain where a company should stock the parts. Should parts be stocked in a centralized fashion—say, a single warehouse or a small number of central warehouses? Or should the company have a far-flung network with multiple stocking points? The answer, Cohen notes, depends on the criticality factor.

In the case of computer systems for air traffic controllers, it makes sense to have critical components stocked over a wide network, so that plenty of points in the supply chain can back up one another when the parts are urgently needed.

In contrast, a busted hair dryer could probably wait an extra day for parts to be shipped from a distant central warehouse or disposed of altogether by providing the customer with a replacement product. Cohen, who has overseen research by several Ph.

Today Saturn has the highest off-the-shelf availability rate for parts of any car maker, according to Parts Monitor, a trade publication. Where is parts supply-chain management headed in the future?

  • Most people find it difficult to cope with planning when it involves more than a few variables;
  • Dell also has automated its factory scheduling, demand-planning capabilities, and inventory management using information technology and e-supply chain models;
  • Such strong impact causes companies to incorporate the information visibility into their competitive advantage;
  • In addition, by directly dealing with the customer Dell gets a clearer indication of market trends.

Cohen believes that with the coming of e-commerce, the field is moving towards a revolution. As a result of the Internet, it has now become possible for companies to create vast networks connecting their operations with those of their suppliers and customers. As web-based technology takes off, however, the process of setting up such supply chains will become both faster and less expensive.