EC & SCM EC & SCM

AT ETA FABRIQUES D’EBAUCHES SAAT ETA FABRIQUES D’EBAUCHES SA

Presented By:Presented By:

Lito BaysaLito Baysa Jim LindforsJim Lindfors Steve PowellSteve Powell

PRESENTATION OUTLINEPRESENTATION OUTLINE

IntroductionIntroduction Concepts in Business Concepts in Business

networkingnetworking Case StudyCase Study Implications for designing Implications for designing

EC/SCM solutionsEC/SCM solutions ConclusionConclusion

INTRODUCTIONINTRODUCTION

Transformation from the old to the Transformation from the old to the ‘new economy’‘new economy’ Rise of new intermediaries, deconstruction of Rise of new intermediaries, deconstruction of

value chains, new business rules, and new value chains, new business rules, and new requirements to meet customer demands in requirements to meet customer demands in terms of speed, availability, cost and service.terms of speed, availability, cost and service.

Business networking through integrated EC and Business networking through integrated EC and SCMSCM

INTRODUCTIONINTRODUCTION

Integrated EC and SCM approachIntegrated EC and SCM approach Combination of EC and SCMCombination of EC and SCM Industrial physical goodsIndustrial physical goods Existing business networksExisting business networks

EC AND SCM IN BUSINESS EC AND SCM IN BUSINESS NETWORKINGNETWORKING

Concepts of business networkingConcepts of business networking Extends the scope of BPR methodologiesExtends the scope of BPR methodologies Assumes that production occurs not within Assumes that production occurs not within

vertically integrated companies but in networks vertically integrated companies but in networks where different partners concentrate on their where different partners concentrate on their core activitiescore activities

Addresses new strategic options, new Addresses new strategic options, new possibilities for processes as well as technical possibilities for processes as well as technical issuesissues

EC & SCM IN BUSINESS EC & SCM IN BUSINESS NETWORKINGNETWORKING

EC: Building the LinksEC: Building the Links Phases of TransactionsPhases of Transactions

Information – identification of vendors and Information – identification of vendors and productsproducts

Contracting – negotiation and decision Contracting – negotiation and decision makingmaking

Settlement – finalization order entrySettlement – finalization order entry

·

Sell Side

· Single Vendor Catalogs

· Multi Vendor Catalogs· Electronic Malls· Electronic Auctions

·

Sell Side

· Single Vendor Catalogs

· Multi Vendor Catalogs· Electronic Malls· Electronic Auctions

ElectronicCommerce Processes

PROCESSES and APPLICATIONS of EC

SuppliersCustomers

Information

Contracting

Settlement

EC & SCM IN BUSINESS EC & SCM IN BUSINESS NETWORKINGNETWORKING

SCM: Building the ChainSCM: Building the Chain Four Processes in SCMFour Processes in SCM

Plan – demand and supply planning, Plan – demand and supply planning, inventoryinventory

Source – sourcing and material acquisitionSource – sourcing and material acquisition Make – production, material request and Make – production, material request and

receiptreceipt Delivery – order, warehouse and Delivery – order, warehouse and

transportation management. transportation management.

·

SupplyChain

ProcessesCustomers

PlanPLAN

Source

Make

Deliver

SCOR Supply Chain Processes

·

Suppliers

PLAN

Source

Make

Deliver

EC & SCM IN BUSINESS EC & SCM IN BUSINESS NETWORKINGNETWORKING

Comparison of ConceptsComparison of Concepts Aspects of ComplementarityAspects of Complementarity

Process: Transaction processes link Process: Transaction processes link individual business processesindividual business processes

Scope of design: EC takes a transactional Scope of design: EC takes a transactional perspective whereas SCM takes flow perspective whereas SCM takes flow perspectiveperspective

·

SupplyChain

ProcessesCustomers

PLAN

Source

Make

Deliver

Complementary Relationship Between EC and SCM

·

Suppliers

PLAN

Source

Make

DeliverSettlement

Contracting

Information

ElectronicCommerce Processing

CONCEPTS OF BUSINESS CONCEPTS OF BUSINESS NETWORKINGNETWORKING Transformation Transformation

CASE STUDYCASE STUDY

ETA SA Fabriques d’EbauchesETA SA Fabriques d’Ebauches

Global producer of watches for Global producer of watches for Swatch brandsSwatch brands

Consists of a number of companies Consists of a number of companies that focus on finished movements, that focus on finished movements, component production and R&Dcomponent production and R&D Swatch brands produce and distribute Swatch brands produce and distribute

finished productsfinished products World’s Third Largest manufacturer World’s Third Largest manufacturer

of movementsof movements 10,000 employees -- 15 production 10,000 employees -- 15 production

sites -- 1998 revenue = 1 billion SFsites -- 1998 revenue = 1 billion SF

Goals -- SolutionsGoals -- Solutions

Goals Solutions

Combine EC and SCM

An electronic catalog of spare parts enables direct order entry. The delivery chain was reengineered to allow direct distribution of spare parts direct to customers.

Industrial Physical Goods Physical goods

Existing Business Network (Old Economy)

Implemented at a 200 year old company in a traditional industry.

STRATEGICALLY IMPORTANT STRATEGICALLY IMPORTANT PROBLEMSPROBLEMS

Redesign of the Introduction Redesign of the Introduction Process for New MovementsProcess for New Movements

New distribution strategy for New distribution strategy for movements and spare partsmovements and spare parts

Installation of a new distribution Installation of a new distribution channel for spare parts and channel for spare parts and movementsmovements

MAIN PROBLEMS ENCOUNTEREDMAIN PROBLEMS ENCOUNTERED

Customers lacked Customers lacked information on interchangeability information on interchangeability

of parts (Swatch Group)of parts (Swatch Group) comprehensive technical comprehensive technical

documentation for assembly, documentation for assembly, storage, etc of movements and storage, etc of movements and spare partsspare parts

MAIN PROBLEMS (continued)MAIN PROBLEMS (continued)

Low level of customer serviceLow level of customer service long cycle timeslong cycle times misunderstandings during order misunderstandings during order

processingprocessing long delivery timeslong delivery times

Rudimentary customer Rudimentary customer information availableinformation available

SOLUTIONSOLUTION

Implement a new distribution Implement a new distribution channel for spare partschannel for spare parts

EC/SCM SolutionEC/SCM Solution direct order entrydirect order entry new supply chain for direct new supply chain for direct

deliveries to customersdeliveries to customers

ETA SA -- ECETA SA -- EC

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C:\Documents and Settings\Jim\My Documents\MAGL\IS695\Presentation -- Fabriques D'ebauches SA\ViewDoc 1.pdfC:\Documents and Settings\Jim\My Documents\MAGL\IS695\Presentation -- Fabriques D'ebauches SA\ViewDoc 1.pdf Presentation -- Presentation -- FabriquesFabriques D'ebauchesD'ebauches SA\EOS ETA Online SA\EOS ETA Online Shop.htmShop.htm

MAIN BENEFITS of ECMAIN BENEFITS of EC Efficiency of information and contracting servicesEfficiency of information and contracting services

All relevant information on existing and new products All relevant information on existing and new products on same channel as order entryon same channel as order entry

((technical, prices, sales conditions, interchangeability)technical, prices, sales conditions, interchangeability)

Improved customer serviceImproved customer service additional: electronic order payment options, additional: electronic order payment options,

technical document downloads, and electronic order technical document downloads, and electronic order trackingtracking

planned: customer profiling, individual customer planned: customer profiling, individual customer homepages and communities, FAQ, and auctions for homepages and communities, FAQ, and auctions for refurbished partsrefurbished parts

Efficiency of order processingEfficiency of order processing homogenization of master data reduces matching homogenization of master data reduces matching

effort, and hence, reduced misunderstandingseffort, and hence, reduced misunderstandings can handle more volume with more time for can handle more volume with more time for

personalized customer servicepersonalized customer service

PLAN

Source

Make

Deliver

·PLAN

Source

Make

Deliver

ETA SA

PLAN

Source

Make

Deliver

ETA SA

Non Swatch Grp Brands

WholesalersSwatch Group Brands

Retailers

·PLAN

Source

Make

Deliver

Country Organizations

Watchmakers

·PLAN

Source

Make

Deliver

Country Organizations

Watchmakers

Redesigned Supply Chain

Traditional Supply Chain

Reengineering of Spare Parts Supply Chain

RE-ENGINEERING the SPARE RE-ENGINEERING the SPARE PARTS SUPPLY CHAINPARTS SUPPLY CHAIN

Significant number of Significant number of transaction direct deliveriestransaction direct deliveries Concentration of inventories at Concentration of inventories at

ETA SAETA SA Elimination of warehouses at Elimination of warehouses at

brands and retailersbrands and retailers Delivery guarantees for customersDelivery guarantees for customers

COMPLEMENTARY of CONCEPTS COMPLEMENTARY of CONCEPTS --- SCM IMPORTANCE--- SCM IMPORTANCE

Supply chain performance – a Supply chain performance – a selling propositionselling proposition ETA Online higher priorities and ETA Online higher priorities and

delivery guaranteesdelivery guarantees Credit card payment introducedCredit card payment introduced Track shipments and provide Track shipments and provide

accurate shipping cost (3accurate shipping cost (3rdrd party)party)

Traditional SolutionTraditional Solution Redesigned SolutionRedesigned Solution

ECEC

Consistent product Consistent product catalogs unavailablecatalogs unavailableInefficient order entry (fax, Inefficient order entry (fax, mail,..) and order mail,..) and order processingprocessing

Electronic product Electronic product catalog (easy to use and catalog (easy to use and maintain)maintain)Order entry via same Order entry via same channelchannel

SCSCMM

Long delivery timesLong delivery timesManual integration of Manual integration of ERP (manual re-entry of ERP (manual re-entry of ordersordersMultiple warehouses Multiple warehouses and channelsand channels

Delivery guaranteesDelivery guaranteesDirect link between EC Direct link between EC solution and ERP systemsolution and ERP systemConcentration of Concentration of warehouseswarehousesLess complex fulfillment Less complex fulfillment chain due to smaller chain due to smaller number of business number of business partnerspartners

·

ETAOnline Shop

PLAN

Source

Make

Deliver

Complementary of EC/SCM

·

PLAN

Source

Make

DeliverSettlement

Contracting

Information

Retailers

Watchmakers

Country organizations

COMPLEMENTARITY of EC / SCMCOMPLEMENTARITY of EC / SCM

Process – improved information and contracting,

direct customer contact (browse catalog and enter order)

EC focus on catalog and order entry channel

SCM focus on order processing, delivery and payment (settlement phase). EC provides efficient link between internal supply processes and the customer.

COMPLEMENTARITY of EC / SCMCOMPLEMENTARITY of EC / SCM

Scope of design New solution for transactions between

ETA and customers Catalog makes interface to customers

more efficient Transaction process covers entire

customer process – marketing to after sales

Supply chain activities include Order flow from online shop to

ERP, physical goods delivery, financial goods from customer

IMPLICATIONS for DESIGNING IMPLICATIONS for DESIGNING EC/SCM SOLUTIONSEC/SCM SOLUTIONS

Apply principles of Business Apply principles of Business Process Re-engineering.Process Re-engineering.

Master Data ManagementMaster Data Management Communicate Win-Win Situation.Communicate Win-Win Situation.

IMPLICATIONS for DESIGNING IMPLICATIONS for DESIGNING EC/SCM SOLUTIONSEC/SCM SOLUTIONS

Apply principles of Business Apply principles of Business Process Re-engineering.Process Re-engineering. Structure (Illustrate) the Structure (Illustrate) the

Organizational, Functional, and Data Organizational, Functional, and Data Dimensions.Dimensions. Strategy Level – Win-win, ROIStrategy Level – Win-win, ROI Process Level – creation of functional Process Level – creation of functional

efficiency.efficiency. Systems Level – applications reliabilitySystems Level – applications reliability

IMPLICATIONS for DESIGNING IMPLICATIONS for DESIGNING EC/SCM SOLUTIONSEC/SCM SOLUTIONS

Master Data Management as, Master Data Management as, “Hidden Success Factor”“Hidden Success Factor” Identify applicable standards for Identify applicable standards for

handling orders via customer handling orders via customer counter.counter.

Control of interchangeable Control of interchangeable information, pricing information, and information, pricing information, and parts description integrity.parts description integrity.

Although EC/SCM does not Although EC/SCM does not explicitly require it, ETA calls explicitly require it, ETA calls standardization it’s “Hidden Success standardization it’s “Hidden Success Factor” Factor”

IMPLICATIONS for DESIGNING IMPLICATIONS for DESIGNING EC/SCM SOLUTIONSEC/SCM SOLUTIONS

Communication of Win-Win Communication of Win-Win Situation – ROI.Situation – ROI. Set-up costs.Set-up costs. Running costs.Running costs. Benefits.Benefits.

ETA-Customer Service (ETA-CS)

Brands, wholesalers, country organizations, retailers, watchmakers

Cooperation principles, win-win relationship

ETA - SA Partner

Strategy LevelThe business strategy level covers relationships among business units and the definition of a vision.

Process LevelThe process level determines the organizational units, the process outputs, organizational activities, important functions, and entities into the database.

IS LevelThe information system levelExists of applications, middleware components, and data bases.

Electronic catalog

Deliver

Source

ETAERPProConcept

MSExchange

eMail clientBrowser

SMTPServer

ETAWeb

Server

ASP

OrderSpare Parts

Order

Order Confirmation

Levels of Business Engineering at ETA SA

CONCLUSION AND NEXT STEPSCONCLUSION AND NEXT STEPS

Integration of EC and SCM is changing Integration of EC and SCM is changing the way businesses work internally and the way businesses work internally and with each other.with each other.

The future will prove whether B2B The future will prove whether B2B relationships will remain committed.relationships will remain committed.

Potential to extend EC/SCM strategy Potential to extend EC/SCM strategy to broader line of products.to broader line of products.