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Implementation Strategy
When a company tries to assess its E-business strategy, including
its need and desire to collaborate with business partners, it must
also determine the acceptable tradeoffs among the four primary variables
of E-business initiatives: complexity, speed, cost, and functionality.
This process includes identifying and accessing likely constraints
and challenges and finding tactical, quick-win opportunities (low-hanging
fruits). The company need not embark on a 'big bang' strategy but
chooses an incremental approach so that they can monitor every stage
and take corrective action quickly.
The new challenge is to manage much of the information residing outside
the organisation. The ability to exchange information seamlessly is
important.
These business partners used different systems and software applications.
Some were implemented before the advent of the Internet. Integrating
these systems can be very difficult.
XML is best suited for this application because it provides a syntax
that allows the definition of information in an unambiguous way. By
doing so, you can extract the data from the process. You can capture
the information and process it with different applications.
The overall plan will take into consideration the existing business
applications. Many companies have applications such as Material Resource
Planning (MRP), and Enterprise Resource Planning (ERP) that were designed
before the advent of Internet. Typically most companies have streamlined
business applications that link their internal business processes
that have proven to be efficient. It is imperative that companies
continue to use these applications and focus on building the "bridges"
to link these processes to those of their business partners (Figure
2). The advantage of this approach is that they can leverage on existing
investments.
A typical backend system like MRP or ERP operates on their own databases
and generates documents such as purchase orders, production schedules,
inventory, and delivery orders. They provide data export as well as
import features. These data files are commonly presented as a fixed-width
data file or in the form of a delimited data file. Other files are
generated using SQL server databases. These data are converted to
the XML format for exchange purposes.
On-line Procurement Hub
Figure 2: On-line Procurement Hub
My case study focuses on implementing a procurement hub for an electronic
consumer electronics manufacturer. It is based on my recent project
at Sanyo Asia. This scenario can also be applied to companies that
purchase raw materials from multiple suppliers.
The critical success factors for manufacturers are:
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Quality of the goods they
produced |
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Time taken to deliver finished products
to the market, and |
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Manufacturing costs. |
Manufacturers need to focus on implementing an infrastructure that
enables them to tighten their relationship with their key business
partners like suppliers. The challenge is to reduce the paper-intensive
process by moving these processes on line. The infrastructure must
be able to push information quickly and create an information supply
chain linking the trading partners.
This system needs to be closed loop so that buying organisation can
react to feedbacks from partners and take appropriate actions. For
example, if a supplier cannot fulfil a particular part, the buyer
must cancel the order and reissue a new order to an alternative source.
Companies can also provide inventory information to suppliers in the
case of vendor-managed inventory, where suppliers are responsible
to manage the inventory of their customers and provide timely replenishment.
Besides the critical success factors, it is important that we look
at the partners. Are they ready for E-business? In order to be successful,
we need to get them into the Web.
The propose solution must meet these requirements:
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Very simple solution that
enables suppliers to access the documents using their standard
browsers with Internet connection |
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Notification through E-mail |
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Support business partners integration |
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System needs to be flexible so that new
applications or new standards can be added easily |
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Simple to use and manage |
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Scalable to meet future demand. |
The simplest means of access and acknowledgment of documents is through
Web forms. In order to be compatible with all web browsers, these
forms are presented in pure HTML format. The XML format is easily
transformed into HTML. However, accessing Web forms involves human
intervention.
To enable systems integration, we need to provide automatic data exchange.
At the supplier end, we provide an FTP (File Transfer Protocol) client
to download XML data files. The data received are processed and converted
to the format suitable to import the business application.
XML is a data structure syntax and in order for data exchange to take
place we need to define each element in the data structure. This is
the DTD of the XML document. Who defines this vocabulary? If there
is no standard, the easiest way is to get the trading partners together
to contribute to the definition of the vocabulary.
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