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Lean Manufacturing, Basics, Principles, Techniques

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For businesses to thrive and survive in the information age of the new millennium, they need to adopt progressive and distinguishing behav­iors. Traditional resources of labor or capital will not be the driving force or the limiting factor in achieving progressive and distinguishing behaviors. Rather, it will be the availability and timeliness of informa­tion to effect business decisions and to coordinate actions that will achieve progressive and distinguishing behaviors.

Historically, computers matured from a desktop tool, used prima­rily for repetitive clerical tasks, to an integrated system, used primarily for integrating work groups within an organization. Currently, the evo­lution of technology into what is known as electronic commerce (EC) has pushed the world into a technological revolution that will be as significant as the industrial revolution. Remarkably, this revolution's speed of change and societal impact will eclipse any other change or revolution in history. Enterprises that are able to adapt will be the win­ners rewarded with vast returns on investments, business growth, and just plain existence. The losers will be nothing more than the expend­able casualties of business warfare.

Manufacturers, distributors, public warehouses, and other entities (financial institutions, government agencies, etc.) along the business supply chain are all part of the system to provide better quality prod­ucts and services, at the lowest cost within the fastest possible time frame to their customers. Many enterprises have either implemented or will implement strategies such as efficient customer response (ECR), vendor-managed inventory (VMI), Just-in-Time (JIT), supply chain management (SCM), etc. Electronic commerce is not reinventing any of these processes, rather enabling and enhancing these processes from an infra-enterprise perspective to an integrated inter-enterprise reality. EC is strategic for a business to exist, expand its market reach, stream­line operations, improve customer service, and improve management decisions. Furthermore, electronic commerce allows companies to evaluate and possibly eliminate companies along the supply chain if they are not providing sufficient value.

This paper discusses expanding the manufacturer's and supplier's business-to-business electronic commerce capabilities by describing pertinent EC technologies, followed by implementation descriptions of a few projects at press time and by concluding on how businesses can close the loop in the order-ship-bill cycle with electronic payments. (See figure 1.)


 

TECHNOLOGICAL BUILDING BLOCKS OF ELECTRONIC COMMERCE

 

The technologies you choose and the solutions you select to imple­ment electronic commerce are important as they become the enabling or limiting factor for the success of your electronic commerce program and, subsequently, your business.

 

Before we proceed, we need to clarify the definition of electronic commerce. Electronic commerce in the broadest sense is the business practice using modern-day technology to achieve better products and services, reduce costs, decrease cycle times, and provide timely valu­able information (progressive and distinguishing behavior). No one single technology is electronic commerce. EC requires multiple tech­nologies working with one another and along side one another, inter­acting with the company's business processes.

 

An overview of the technology building blocks used to describe the electronic commerce projects described below are outlined here. We will address the Internet, electronic data interchange (EDI), Web ap­plications and management, document management, and security. Note that these technologies are by no means an exhaustive list of electronic commerce technologies available.

INTERNET

When discussing electronic commerce technologies, the Internet is at the forefront. The Internet provides a communication link that allows for a digital connection between all business entities and consumers. It has become the backbone for the electronic commerce infrastructure and is reliable, always available, and cheap. Digital links between busi­nesses existed long ago through private networks or value-added net­works (VANs). Unfortunately, they are expensive to use and do not have large market penetration. Consequently, only larger businesses with high volumes of transactions will exchange business documents with one another over these networks. The low cost of the Internet has now made it affordable for small to medium-sized businesses to trans­mit business information and has provided an opportunity for tremen­dous network cost savings by larger businesses

To Be Continued


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