How to Achieve Smart Business Network?

1. How to AchieveSmart Business Network? Li ZHENG Department of Industrial Engineering Tsinghua University

2. Outline • Business Network in China • How to Achieve Smart? • Research in Tsinghua

3. Outline • Business Network in China • How to Achieve Smart? • Research in Tsinghua

4. Business Network in China • Global Procurement in China • Most part of Fortune 500 Companies have established their procurement center in China • Many parties are involved in the procurement process

5. Case: Wal-Mart • Smartness in the business network • Parties in the business network • Wal-Mart • Supplier • … • Long term collaboration is established between different parties • Product Design Support • Information System Support • The global procurement center is responsible for the coordination of the business network • Purchasing department coordinates the whole process • Specific departments are charged of collaborating with different parties

6. Case: ZHONGGUANCUN Science Park • AS-IS Business Network • Huge demand for transportation • Huge supply for transportation • Individual client deals with individual forwarder • Smarter Business Network • Resource of transportation is better allocated • Demand and supply is aggregated • The transportation process is tracked

7. Business Network in China • Chinese Automobile Industry • There are more than 100 automobile assembly factories, more than 3000 part suppliers in China. • Every automobile manufacturer has about 1000 part suppliers and every part supplier needs to deal with several automobile manufacturers.

8. Case: Some Automobile Manufacturer • Smartness in the business network • Long term collaboration is established between different parties • Part suppliers establish JIT warehouses near the automobile assembly factory • Whenever there is a demand created, part supplier is responsible for delivering the parts to the production line • Production planning of automobile manufacturer is shared with part suppliers • Inventory information of part suppliers is shared with automobile manufacturer • The automobile manufacturer is the driving force for the smart business network

9. Business Network in China • Electronic Industry • Automobile Industry • Logistics Industry • E-Marketplace • ...

10. Business Challenges That Affect Manufacturing • Number of globally distributed manufacturing locations increasing • causing new manufacturing visibility and collaboration needs • Mass customization and events needs to be handled jointly • causing manufacturing flexibility challenges • Product life cycles dramatically shrinking • causing manufacturing cycle times and productivity challenges • Cost pressure continually increasing • causing manufacturing controlling and automation challenges • Quality requirements continually becoming more stringent • to reduce mid-and long-term quality costs

11. Outline • Business Network in China • How to Achieve Smart? • Research in Tsinghua

12. Business Network • Point • Every business entity has its core competence, it needs the supply from some business entities to fulfill the demand of other business entities • Connection • The operation of the business network consists of the collaboration between every two business partners. • Network Configuration • The leading companies in the business network dominate the operation of the business network

13. Smartness • Smartness in the SBN • Quick Connect & Disconnect • Pick, Plug and Play • Own Business Logic • This is the objective! The question is how to make a business network smarter?

14. Point • Every business entity should be smarter • Management Point of View • Right Strategy • Core Competence • Agile Organization • High Execution Power • … • Technology View • Business connection could be established more easily with the help of information technology

15. Case: Amazon • Amazon Web Services • Amazon Web Services provides developers with direct access to Amazon's robust technology platform. • Amazon E-Commerce Service • Access product data from Amazon.com, Amazon.fr, Amazon.ca, Amazon.de, Amazon.co.jp, and Amazon.co.uk • Retrieve detailed item information, including prices, images, customer reviews, and more • Earn money using your Amazon Associates account • Amazon Historical Pricing • Amazon Simple Queue Service • …

16. Connection • Three Levels of Collaboration • Information Collaboration • Basic information sharing • Process Collaboration • Close process integration • Decision Collaboration • Collaborative decision making

17. Case: CPFR • CPFR (Collaborative Planning, Forecasting and Replenishment) is a business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demand. • CPFR links sales and marketing best practices, such as category management, to supply chain planning and execution processes to increase availability while reducing inventory, transportation and logistics costs.

18. Connection • Kinds of connection • Weak vs. Strong • Short term vs. Long term • Static and Dynamic View on the Smartness of Connection

19. Network Configuration • In the network, different points and connections have different level of smartness • The dominant companies in the business network leads the smartness of the business network • Toyota puts forward JIT (Just In Time) • Wal-Mart puts forward CPFR (Collaborative Planning, Forecasting and Replenishment) • … • Network as a whole • Case by case evaluation!!!

20. What do we miss? Social system

21. Outline • Business Network in China • How to Achieve Smart? • Research in Tsinghua

22. Research in Tsinghua • Theoretical research • Process modeling/mining • Semantic Web • Service orientated architecture • Application • Market Place • DS system for Logistics • Consulting system

23. The End Thank you! Dank u! 谢谢！