CCAA

e-Commerce Supports SME Supply Chain Activities in Wales

Mike O’SheaMike O’SheaClemdale Associates

February 2003

e-Commerce Supports SME Supply Chain Activities in Wales 2

CCAA Main Activities of WDA Regional SME Programme To provide an Independent Source

of information on e-Commerce related subjects.

To provide businesses with Development and Implementation Support and Expertise

To promote an active e-Commerce Business Community in Wales.

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CCAA

e-Commerce A convergence of different

methods of business communication into a single concept

Use linked to the re-engineering of business processes

Driven by business to control costs, enhance efficiency & gain competitive advantage

e-Commerce Supports SME Supply Chain Activities in Wales 4

CCAA The Changing Business Environment New market conditions:

Specialisation Subcontracting Global Sourcing

Technological developments in the areas of production, transportation and communications

More elaborate capabilities of people to exploit the possibilities

e-Commerce Supports SME Supply Chain Activities in Wales 5

CCAA

Global Sourcing Trends Increase in supplier/purchaser relationships

mediated by computer networks - little face to face interaction and low costs;

Increase in strategic alliances and partnerships through use of Electronic Communications leads to:

long term and more co-operative relationships expanded use of electronic commerce and EDI early involvement by suppliers in new product

development a dramatic reduction in the supplier base agreements on a schedule of price reductions by suppliers

Achievement of best price, quality, delivery and flexibility

e-Commerce Supports SME Supply Chain Activities in Wales 6

CCAA e-Commerce improves Business Performance

Electronic Commerce

Global Sourcing & Selling

Strategic Partnerships

Cost ControlCustomer Service

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CCAA Implementing e-Commerce Building the business case

customer / supplier analysis business analysis and cost justification - not

just paper procedures but strategic improvements

evaluation of technology and systems options

Secure commitment - internally & externally

e-Commerce Supports SME Supply Chain Activities in Wales 8

CCAA Implementing e-Commerce Develop an Implementation Strategy

agree objectives that support business needs

identify individual and joint responsibilities spell out timescales and milestones

Review business processes understand the process flows document methods of operation identify process improvements

e-Commerce Supports SME Supply Chain Activities in Wales 9

CCAA Implementing e-Commerce Agree an approach following evaluation of :-

the process the information the data elements required

Choose an ICT Infrastructure and Software

Pilot, Test, Go Live

Review Project and Development Strategy

e-Commerce Supports SME Supply Chain Activities in Wales 10

CCAA

Projects Undertaken

Sector No. of

Projects Proposal Prepared

Phase I Business Analysis

Phase II Full Development/

Implementation Manufacturing 9 9 6 6 Office/ Ind Services 7 7 4 4 Electrical/ Electronics/ Telecommunications

6 6 3 2

Industrial Engineering 6 6 1 2 Plastics (various) 4 4 2 1 Food Processing 3 3 2 1 Distribution/ Logistics 3 3 2 1 Freight Forwarding 2 2 1 1 Textiles 2 2 1 1 Agriculture related 2 2 2 2

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CCAA

Business Relationships

28%

72%

Customers

Suppliers

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CCAA

Applications Developed

10%

18%

12%

24%

28%

8%Warehousing Controls, JIT

Product Catalogues/Pricing

Orders & Order Amendments

Schedules & Forecasts

Payments & Invoicing

Despatch, Delivery Logistics

e-Commerce Supports SME Supply Chain Activities in Wales 13

CCAA Business Advantages for SMEs

Cost Speed

Accuracy

Improved Trading

Relationships

Reduced Lead Times

Reduced Errors

Reduced Stock

Increased Market Share

Lower Overheads

Value

e-Commerce Supports SME Supply Chain Activities in Wales 14

CCAA

Main Benefits Reported

0 20 40 60 80 100

Cost Savings

Time Savings

Competitive Advantage

Improved Customer/Supplier Relations

Widened use of e lectronic Systems

Increased trading opportunties

Improved usefulness of systems

Better customer service

Employment Growth/retention

Improved accountability

Beneficiaries - own organisation

Beneficiaries - customers

Beneficiaries - suppliers

Significant

Moderate

None

e-Commerce Supports SME Supply Chain Activities in Wales 15

CCAA

Main Inhibitors Cultural Resistance - changing Lack of management awareness -

improving Reluctance to invest – business not

technology Weak commercial incentive –understanding

business opportunity and benefits Systems development - complexities Bureaucracy - Public Sector improving Security – secure trading issues

CCAA

e-Commerce Supports SME Supply Chain Activities in Wales

SummaryUtilising e-Commerce in the

supply chain is a business not a technology issue

CCAA

e-Commerce Supports SME Supply Chain Activities in Wales

Mike O’SheaMike O’SheaClemdale Associates

February 2003

CCAA

Case Study e-Commerce in Supply Chain

Management

Mike O’SheaMike O’SheaClemdale Associates

February 2003

CCAA

CPM Gifts LimitedE-Commerce Project

Case Studywww.cpm-gifts.com

e-Commerce Supports SME Supply Chain Activities in Wales 20

CCAA

Company Overview The company was formed in 1985

in Cardiff and currently employs 55 people

CPM produce an extensive range of personalised products: Ceramics and glassware decoration Textile print – automatic and manual Computerised design studio Warehouse in Cardiff

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CCAA

Key Customers Clinton Cards BHS Tesco Duty Free Operators Worldwide London Souvenirs WRU (Welsh Rugby Union)

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CCAA

Project ObjectivesThree Primary Objectives To provide a solution for an on-line supply

chain system utilising the web; To complete a detailed business analysis

for integrating the website with both production and commercial systems;

To implement online marketing supports to enable a one-stop shopping experience.

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CCAA

The Challenges To present the entire product range

online to best advantage to maximise sales and revenue potential;

To integrate the customer ordering process with internal systems;

To manage supply chain activities more cost effectively;

To introduce new product ranges facilitated by an e-Commerce environment.

e-Commerce Supports SME Supply Chain Activities in Wales 24

CCAA

Guiding Principles Ensure that all potential customers have

information which is relevant to them; Customise the sytem for each profile of

customer; Provide several ways of accessing product

data as quickly and easily as possible; Provide marketing ideas as to how the

product range may be used and extended.

e-Commerce Supports SME Supply Chain Activities in Wales 25

CCAA

Types of Content

CPM Home Page and corporate identity

Textiles Ceramics Glassware Gifts

Souvenirs Named gifts Gifts for all

seasons Name droppers Memorabilia

10 main types of content presented:

e-Commerce Supports SME Supply Chain Activities in Wales 26

CCAA Systems Overview & FeaturesSystems development based on:

Visitors to the CPM website will be able to order any of the CPM range online

Range of products will include the personalisation of Named Mugs

The visitor will be able to select a mug from the stock range and add it to their shopping cart

They will specify the name they want on the mug

Once they have finished shopping they will go to the checkout and complete their order

e-Commerce Supports SME Supply Chain Activities in Wales 27

CCAA Systems Overview & Features Completed orders are collected by CPM on a

regular basis throughout the day Any orders for Personalised Named Mugs are

automatically identified and stored in a local database

These orders are held in a queue until there are sufficient orders to meet the production criteria

The Art department is automatically notified that a batch of orders is ready and can be released

e-Commerce Supports SME Supply Chain Activities in Wales 28

CCAA Systems Overview & Features Releasing the orders automatically

populates the the appropriate template with the text for the mugs required.

Internal paperwork is raised and the orders proceed through the Named Mug production process.

At the end of the production process the system automatically generates the paperwork required to complete the order and despatch it to the customer.

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CCAA

Business Benefits Strategic, marketing and overall business

objectives met; New line of business implemented for

personalised products; Integration of online ordering and production

achieved for ‘Named Mugs’; Key personnel up-skilled to operate and

administer new systems; “e-culture” introduced throughout CPM; Key customers retained and business

relationships improved.

e-Commerce Supports SME Supply Chain Activities in Wales 30

CCAA Supply Chain Performance Improvements Increased business turnover and better cash

flow facilitated by on-line payments; More orders and broader client base; e-Commerce has enabled immediate

communication with organisations and in particular with international markets;

New business ventures and channels to market established;

Worldwide access to supply chain and competitors;

Niche market for personalised products established and growing.

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CCAA Supply Chain Performance Improvements Increased market transparency through

use of electronic catalogue; Business activities and structures re-

engineered to provide a more competitive partnership position

Closer and more efficient co-operation in production and scheduling activities

Long term strategic benefits through locking in main customers via e-Commerce.

CCAA

e-Commerce Supports SME Supply Chain Activities in Wales

Mike O’SheaMike O’SheaClemdale Associates

February 2003