E-Supply Chain Technologies & Applications
EBC 6230 – Winter Session 2014
Title : Business Intelligence in Supply Chain Management
Submitted to:
Dr. Mohamed Baymout
Prepared by:
Conghui Chen (7455406)Kedi Zhao (7502703)
Majidah Sulaiman Alshudukhi (7258166) Zhengyang Lu (6780414)
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Agenda
Business Intelligence Introduction to Business Intelligence The basics of business intelligence Architecture of Business Intelligence
Supply Chain Management Key Issues and Challenges in SCM Bullwhip Effect
Business Intelligence in Supply Chain Management Business Intelligence in SCM Business Intelligence Technologies in SCM Business Intelligence Tools in SCM Taming Bullwhip Effect with Business Intelligence
Case Study -- Bosch Automotive Product
Conclusion
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Introduction to Business Intelligence
A broad category of technologies, applications, and processes for gathering, storing, accessing, and analyzing data to help its users make better decisions.
More than Software Tools and Technology
Becoming an "Intelligent Company"
Define Objectives
and Information
Needs
Collect the Right
Information
Analyze the Data and Gain
Insights
Present and Communicate
the Information
Make Evidence-
Based Decisions
IT Infrastructu
re and BI Applications as Enablers
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What is business intelligence used for
Organisations use Business Intelligence to:
Gain data-driven insights on anything related to business performance
To understand and improve their performance
Cut costs and identify new business opportunities.
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The basics of business intelligence
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Business Intelligence Tools
OLAP (On-line analytical processing)Advanced AnalyticsCorporate Performance Management
(Portals, Scorecards, Dashboards)Real time BIData Warehouse and data martsData Sources
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Business Intelligence Architecture
Kemper, H.-G., Baars, H., & Lasi, H. (2013). An Integrated Business Intelligence Framework. In Business Intelligence and Performance Management (pp. 13–26).
Springer.
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Key issues in SCM
Demand planning New or deleted products, competitors or market conditions,
the aggregate demand plans and associated revenue plans
Increased competition and price pressures: Reduce the cost: inventory management, logistics
operations, material management and manufacturing costs Value- added services: RFID • Labeling and packaging •
Drop shipping • Collaboration
Efficient PLC Share common operations, components or materials with other
products
Outsourcing (1) Superior supply chain network design (2)outsource partner in
the information chain (3) control mechanisms
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Bullwhip effect
http://www.youtube.com/watch?v=wLNdDSYqhNw
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Bullwhip effect
Causes Demand forecast： each player projects the
demand pattern based on what he or she observes.
Order batching: accumulating the demand; Periodic ordering
Price variations – special discounts and other cost changes
Rationing and shortage gaming: demand exceeds supply, a manufacturer often rations its product to customers.
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Bullwhip effect
Consequences :1. Inefficient production or excessive inventory2. Low utilization of the distribution channel.
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Business Intelligence in SCM
Nenad Stefanovic, Dusan Stefanovic. Supply Chain Business Intelligence: Technologies, Issues and Trends. 2009. Artificial Intelligence an International Perspective, pp 217-245
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Business Intelligence in SCM
Areas of application Activities
Logistics and Operations • Warehouse flows optimization • Inventory planning• Ordering and replenishment• Transportation network management
Demand Management • Forecasting demand • Price optimization & promotion
management • Bullwhip effect magnitude reduction
Procurement and Suppliers Management
• Supplier analysis• Information sharing with partners• Support in procurement decisions
Opportunity/Risk Management
• Identification of new opportunities • Uncertainty and risk management • Supply chain re-engineering• Enhancing relationships quality
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Business Intelligence Tools in SCM
Fall into three categories：Reporting
Display usable information in a scorecard format
Real-time dashboards Provide a quick, daily overview of what is happening
in their transportation or supply chain network
Benchmarking Compare data on factors against peers - Freight rates, etc.
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Taming Bullwhip Effect with Business Intelligence
Information Sharing in Supply Chain
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Taming Bullwhip Effect with Business Intelligence
Use Electronic Data Interchange (EDI) to share data with actors in all the Supply Chain
Set up models to assist decision making Price Variations models Order Batching model
Leverage BI tools to analyze data sources better
Predict the demand more successfully
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Light Tower Project
Bosch Automotive Products
(Suzhou)
Customer Logistics Planning (CLP)
Department
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Challenges
OEMs’ behaviour is not mature
Automotive Electronics (AE) department is
an upstream supplier
AE was suffered a lot from order fluctuation
Fluctuation is often amplified due to bullwhip
effect
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Objectives
Reduce negative impact caused by bullwhip
effect
- Increased GEZ (GesamtEindeckungsZeit
meaning “Total Coverage Time“)
- Over planned capacity
Improve reliability of forecast
- Predict future fluctuation trend
- Provide early warning
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Solution
Get data from different sources
Build a predictive model based on data
Implement the predictive model with a BI
system
Apply results to supply chain management
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Data sets
Actual Data Forecasting data
RBPartActualDelivery DirectCustomerForecast
OEMActualCarProduction
OEMCarProductionForecast
OEMActualCarSales OEMCarSalesForecast
RBPart_UsageRate
RBPN
Car
Usage
Rate
For each type of part: RBPartActualProductionVolume = ΣActualCarProductionVolume * Usage * Rate
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Data Relation
CarCarID
CarName
OEMID
DirectCustomerDirectCustomerID
DirectCustomerName
DirectCustomer_OEMDirectCustomerID
OEMID
DirectCustomerForecastPartID
DirectCustomerID
CustomerForecastMonth
CustomerForecastVolume
CustomerForecastVersion
OEMOEMID
OEMName
OEMActualCarProductionCarID
ActualCarProductionMonth
ActualCarProductionVolume
OEMActualCarSalesCarID
ActualCarSalesMonth
ActualCarSalesVolume
OEMCarProductionForecastCarID
CarProductionForecastMonth
CarProductionForecastVolume
CarProductionForecastVersion
OEMCarSalesForecastCarID
CarSalesForecastMonth
CarSalesForecastVolume
CarSalesForecastVersion
RBPartPartID
RBPN
MiFa
Product
RBPart_DirectCustomerPartID
DirectCustomerID
RBPart_UsageRatePartID
CarID
Usage
Rate
Price
RBPartActualDeliveryPartID
RBPartDeliveryMonth
RBPartDeliveryVolume
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Data Analysis and Predictive Modeling
R1 = f (RBPartActualSalesVolume, RBPartActualProductionVolume)
R2 = f (RBPartActualProductionVolume, RBPartDeliveryVolume)
R3 = f (RBPartSalesForecastVolume, RBPartProductionForecastVolume)
R4 = f(RBPartProductionForecastVolume, CustomerForecastVolume)
RWeigh
t
R1 4
R2 6
R2 1
R4 6
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Data Analysis and Predictive Modeling
R Score = f (R)
V = f (Score, Weight)
Increase =
f (R,V)Decrease
= f (R,V)
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Conclusion
BI upgrades the quality and timeliness of
data and helps in decision making process.
BI improves reliability of forecast and
reduces uncertainties in supply chain and
helps tame the bullwhip effect.
Implementation of BI system with effective
tools is critical in whole process of SCM.
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Thank you!
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References
Hau Lee, V Padmanabhan, and Seungjin Whang. 1997.The Bullwhip Effect In Supply Chains. Sloan Management Review
Six Key Trends Changing Supply Chain Management Today. 2009 .Hitachi Consulting Corporation . http://www.hitachiconsulting.com/files/pdfRepository/WP_SCMTrends.pdf
Isabella Maggioni, Francesca Ricciardi. Business Intelligence for Supply Chain Management: Trends from Scholarly Literature and from the World of Practice. 2012. Information Systems: Crossroads for Organization, Management, Accounting and Engineering, pp 287-294
Nenad Stefanovic, Dusan Stefanovic. Supply Chain Business Intelligence: Technologies, Issues and Trends. 2009. Artificial Intelligence an International Perspective, pp 217-245
Amy Roach Partridge. Business Intelligence in the Supply Chain. April 2013. Inbound Logistics. http://www.inboundlogistics.com/cms/article/business-intelligence-in-the-supply-chain/
Jeff Moad. BI Tools Boost Supply Chain Excellence, Study Finds. March 19, 2010. Managing Automation. http://www.managingautomation.com/maonline/exclusive/read/BI_Tools_Boost_Supply_Chain_Excellence__Study_Finds_27756148
What is the Bullwhip Effect? Understanding the concept & definition. April, 2, 2012. Logistics & Materials Handling Blog. http://www.aalhysterforklifts.com.au/index.php/about/blogpost/what_is_the_bullwhip_effect_understanding_the_concept_definition
Ranjan, J. (2009). Business intelligence: concepts, components, techniques and benefits. Journal of Theoretical and Applied Information Technology, 9(1), 60-70. www.jatit.org
Negash, S. (2004). Business intelligence. Communications of the Association for Information Systems, 13(1), 177-195.
Lönnqvist, A., & Pirttimäki, V. (2006). The measurement of business intelligence. Information Systems Management, 23(1), 32.
