SCM Work Area 1.2-1

Janet’s Pots
Supply Chain Management System
REF001
Version 1.0
Tender Title With REF001 - Name of Tender Issuer
Janet’s Pots – Supply Chain Management System
Table of Contents
1. Executive Summary 3
Objective 3
Goals 3
Solution 3
2. Introduction 4
Terms of Contract 4
Condition(s) 4
3. Current System Analysis 5

Current Information Technology and System Assets 5
Limitations of the Current System 5
4. E-Business and Extranet 6

What is E-Business 6
Extranet 6
5. Supply Chain Management 7

What is Supply Chain Management? 7
Elements of Supply Chain Management 7
Managing a Supply Chain 8
Categories of Supply Chain Management Applications 9
SAP Supply Chain Management 9
Oracle Supply Chain Management 10
Error: Reference source not foundTender Title With REF001 - Name of Tender Issuer
Janet’s PotsError: Reference source not found – Supply Chain Management
6. Positive Impacts of Implementing an SCM System 11
7. Negative Impacts and Risks 14
8. Solutions to Avoid Negative Impacts 15
9. Conclusion 18
2
1. Executive Summary
Objective
Goals
Solution
Aenean iaculis laoreet arcu
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2. Introduction
Terms of Contract
Fairfax require us to produce and deliver 250 jars a week to 200 of its putlets nationwide. This
means a five-fold increase in production levels and at the same time meeting the supermarkets’ demand in
terms of quality, timeliness of delivery, cost of goods, special promotions and point of sale material which
we believe we are easily capable of handling.
Condition(s)
The contract has been awarded for a one-year period – which will only be extended if we
implement a formal supply chain management system that can link via the extranet to Fairfax
Supermarkets’ SCM system.
The purpose of this document is to explain the implementation of Supply Chain Management into
Janet’s pots and to discuss the main elements of supply chain management with the usage of technology.
The psitive and negative impacts would also be discussed with the solutions to mitigate the negative
effects and the risk management will be a key factor.
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3. Current System Analysis
Current Information Technology and System Assets

At present, we have the following system in place,
 5 x free standing workstations all connected to the world wide web
 All contain the Microsoft Office 2007 software
Limitations of the Current System
Local Area Network (LAN)/Intranet

At the present time, none of our computers are linked together by an internal network
(LAN/Intranet).
Intranet is similar in many ways to the internet – but restricted to users within a single company.
Just as people use the internet to publish and share information, companies use internal networks to share
information between their employees.
As we are a company that is growing and the demand of our products is constantly on the rise, all
users must be able to share files and have access to relevant information across the company.
Intranets that extend outside the company are known as extranets – this will be discussed
later on in this report).
Formal Contracts, Informal Communication

As per the memorandum, we are linked to local customers and suppliers via formal contracts but
informal communication.
At the moment, communication between us and our customers/suppliers are not

recorded/documented. As the communication is informal, it is hard for us to dertermine our clients ordering
patterns, delivery dates and terms etc.
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4. E-Business and Extranet
To obtain and maintain formal communication with suppliers and customers alike, it is very important to
adopt an e-business model.
What is E-Business?
E-business is about using Internet-based technology to,
 Provide superior customer service
 Streamline business processes
 Increase sales
 Reduce costs
E-business uses tools such as email, online banking solutions, websites, supply chain
management(SCM) software and web-based customer relationship management (CRM) solutions.
(Government of Canada - Services for Entrepreneurs 2010)
http://www.canadabusiness.ca/eng/145/148/4325/
Extranet
Fairfax Supermarkets want our formal supply chain system to be connected via extranet to their
SCM system.
What is an Extranet?
An extranet is similar to an intranet (explained in Section 3 – Current System Analysis) but it is
made accessible to selected external partners such as business partners, suppliers, key customers, etc,
for exchanging data and applications and sharing information.
Why is an Extranet Used?

Extranets offer a cheap and efficient way for businesses to connect with their trading partners. It also
means that your business partners and suppliers can access the information they need 24 hours a day.
The ability of the extranet to automate the trading tasks between you and your trading partners can lead to
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enhanced business relationships and help to integrate your business firmly within their supply chain.
Business Link – Benefits of Intranet and Extranet
http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1075386483&type=RESOURCES
7
5. Supply Chain Management
‘Supply Chain Management is the integration of key business processes across the
supply chain for the purpose of adding value for customers and stakeholders’ (Lambert-
2008)
What is Supply Chain Management?
Definitions
Christopher (2005, p17), defines supply chain as the network of organisations that are involved
through upstream and downstream linkages, in the different processes and activities that produce value in
the form of products and services in the hands of the ultimate consumer.
A more common and accepted definition of Supply Chain Management is as follows,
According to the Council of Supply Chain Management Professionals (CSCMP), ‘Supply Chain
Management encompasses the planning and management of all activities involved in sourcing,
procurement, conversion, and logistics management. It also includes the crucial components of
coordination and collaboration with channel partners, which can be suppliers, intermediaries, third- party
service providers, and customers. In essence, Supply Chain Management integrates supply and demand
management within and across companies. ‘
An electronic SCM system allows us to be connected with our suppliers and customers all at the
same time – all the time.
Elements of Supply Chain Management

There are five basic elements of SCM. They are,
Plan
This is the strategic portion of SCM. Companies need a strategy for managing all the resources
that go toward meeting customer demand for their product or service. A big piece of SCM planning is
developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high
quality and value to customers.
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Source
Next, companies must choose suppliers to deliver the goods and services they need to create
their product. Therefore, supply chain managers must develop a set of pricing, delivery and payment
processes with suppliers and create metrics for monitoring and improving the relationships. And then,
SCM managers can put together processes for managing their goods and services inventory, including
receiving and verifying shipments, transferring them to the manufacturing facilities and authorizing supplier
payments.
Make
This is the manufacturing step. Supply chain managers schedule the activities necessary for
production, testing, packaging and preparation for delivery. This is the most metric-intensive portion of the
supply chain—one where companies are able to measure quality levels, production output and worker
productivity.
Deliver
This is the part that many SCM insiders refer to as logistics, where companies coordinate the
receipt of orders from customers, develop a network of warehouses, pick carriers to get products to
customers and set up an invoicing system to receive payments.
Return
This can be a problematic part of the supply chain for many companies. Supply chain planners
have to create a responsive and flexible network for receiving defective and excess products back from
their customers and supporting customers who have problems with delivered products.
Thomas Waligum, What Is Supply Chain Management November 2008
http://www.cio.com/article/40940/Supply_Chain_Management_Definition_and_Solutions#scm_abc
Managing a Supply Chain

There are three main paths in the process:
 Product Flow - includes the movement of goods from a supplier to a customer, as well as
customer returns.
 Information Flow - involves transmitting orders and updating the status of delivery.
 Financial Flow - consists of credit terms, payments and payment schedules, plus consignment
and title ownership.
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Juggling these elements involves record-keeping, tracking and analysis by many departments. Supply
chain software, especially large, integrated packages, combines many different technologies to give a
single view of supply chain data that can be shared with others.
Categories of Supply Chain Management Applications

Supply chain management applications fall into two main categories which are,
 Planning Applications,
 Execution Applications
Planning applications determine the best way to route materials and the quantities of goods needed at
specific points. When such applications work wellm they make possible the ‘just in time’ delivery of goods.
Execution applications track financial date, the physical status and flow of goods, and ordering and
delivery of materials.
(Russell Kay, Supply Chain Management , 2001)

(http://www.computerworld.com/s/article/66625/Supply_Chain_Management?
taxonomyId=121&pageNumber=1 )
As per the comments of the Fairfax CEO mentioned in the memorandum, for us to be able to hold
on to this contract any more than the one-year period, we will have to implement a formal information
system that can link via their extranet to their SCM system. Following in-depth research, the most
recognised and respectable supply chain management systems avaiable are the following,
SAP Supply Chain Management
‘Planning, Execution and Collaboration across the supply chain

network’
SAP SCM is part of the SAP Business Suite, which gives organizations the unique ability to perform
their essential business processes with modular software that is designed to work with other SAP and non-
SAP software.
 SAP SCM can help transform a linear, sequential supply chain into a responsive supply network –
in which communities of customer-centric, demand-driven companies share knowledge,
intelligently adapt to changing market conditions, and proactively respond to shorter, less
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predictable life cycles. SAP SCM provides broad functionality for enabling responsive supply
networks and integrates seamlessly with both SAP and non-SAP software.
Oracle Supply Chain Management
‘Best-In-Class, Complete, Open, Integrated solution that

powers information-driven supply chains’
Oracle supply chain management (SCM) is a best-in-class, complete, open, integrated solution
that powers information-driven supply chains. With Oracle SCM, companies can predict market
requirements, innovate in response to volatile market conditions, and align operations across global
networks. Oracle SCM provides industry-specific solutions based on best-in-class applications that span
product development, demand management, sales and operations planning, transportation management,
and supply management.
The above systems are there to deal with all issues of the Supply Chain Management System
and are very expensive to implement.
What Works for Us?

Other than the two top range SCM systems discussed above, there are other alternatives
available in the marketplace.
As we are not a company as large as Fairfax Supermarkets, we do not need to invest a high
amount of capital for an SCM system. We as a company fall in the middle of this supply chain which
means we just need a tailormade solution that formally records and manages communication with our
suppliers and customers and at the same time, links to Fairfax Supermarkets SCM System through
extranet.
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6. Positive Impacts of
Implementing an SCM
System
In this section we will look at the impacts the implementation of a Supply Chain Management System has
on,
Our Business
Faster response to changes in supply and demand
With increased visibility into the supply chain and adaptive supply chain networks, you can be more
responsive. You can sense and respond quickly to changes and quickly capitalize on new opportunities.
Increased customer satisfaction
By offering a common information framework that supports communication and collaboration,SCM enables
to better adapt to and meet customer demands.
Compliance with regulatory requirements
You can track and monitor compliance in areas such as environment, health, and safety.
Improved cash flow
Information transparency and real-time business intelligence can lead to shorter cash-to-cash cycle times.
Reduced inventory levels and increased inventory turns across the network can lower overall costs.
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Higher margins
With SCM, you can lower operational expenses with more timely planning for procurement,
manufacturing, and transportation. Better order, product, and execution tracking can lead to improvements
in performance and quality – and lower costs. You can also improve margins through better coordination
with business partners.
Greater synchronization with business priorities
Tight connections with trading partners keep your supply chain aligned with current business strategies
and priorities, improving your organization's overall performance and achievement of goals.
Transportation management
Consolidate orders and optimize shipments with the SAP Transportation Management application. By
sharing information and combine orders directly with carriers over the Internet, you can integrate business
partners into your company's processes and maintain control of plans.
Warehouse management
Optimize warehouse activities, including inbound and outbound processing, facility management and
storage, physical inventory, and planned and opportunistic cross docking. Take advantage of data
collection technologies such as radio frequency identification (RFID) and voice and new workload
balancing tools.
Minimized Delays
Many supply chains – particularly those that haven’t been enhanced with a supply chain application – are
plagued by delays that can result in poor relationships and lost business. Late shipments from vendors,
slow downs on production lines, and logistical errors in distribution channels are all common issues that
can negatively impact a company’s ability to satisfy customer demand for its products.
With supply chain software, all activities can be seamlessly coordinated and executed from start
to finish, ensuring much higher levels of on-time delivery across the board.
Enhanced Collaboration
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Imagine having the ability to know exactly what your suppliers and distributors are doing at all times – and
vice versa.
Supply chain softwares make that possible, bridging the gap between disparate business
softwares at remote locations to dramatically improve collaboration among supply chain partners. With
supply chain softwares, all participants can dynamically share vital information – such as demand trend
reports, forecasts, inventory levels, order statuses, and transportation plans – in real-time. This type of
instantaneous, unhindered communication and data-sharing will help keep all key stakeholders informed,
so supply chain processes can run as flawlessly as possible.
Reduced Costs
A supply chain software can help reduce overhead expenses in a variety of ways. For example, it can:
Improve inventory management, facilitating the successful implementation of just-in-time stock

models, and eliminating the strain on real estate and financial resources caused by the need to store
excess components and finished goods
Enable more effective demand planning, so production output levels can be set to most
effectively address customer requirements – without the shortages that result in lost sales, or the waste
that drains budgets
Improve relationships with vendors and distributors, so purchasing and logistics professionals can
identify cost-cutting opportunities such as volume discounts.
Activities of Supply Chain
Supply chain management is a cross-function approach including managing the movement of raw
materials into an organization, certain aspects of the internal processing of materials into finished goods,
and the movement of finished goods out of the organization and toward the end-consumer.
Several models have been proposed for understanding the activities required to manage material
movements across organizational and functional boundaries.
Strategic
 Strategic network optimization, including the number, location, and size of warehousing,
distribution centers, and facilities.
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 Strategic partnerships with suppliers, distributors, and customers, creating communication

channels for critical information and operational improvements such as cross docking, direct
shipping, and third-party logistics.
 Product life cycle management, so that new and existing products can be optimally integrated into
the supply chain and capacity management activities.
 Information technology infrastructure to support supply chain operations.
 Where-to-make and what-to-make-or-buy decisions.
 Aligning overall organizational strategy with supply strategy.
Tactical
 Sourcing contracts and other purchasing decisions.
 Production decisions, including contracting, scheduling, and planning process definition.
 Inventory decisions, including quantity, location, and quality of inventory.
 Transportation strategy, including frequency, routes, and contracting.
 Benchmarking of all operations against competitors and implementation of best practices

throughout the enterprise.
 Milestone payments.
 Focus on customer demand.
Operational
 Daily production and distribution planning, including all nodes in the supply chain.
 Production scheduling for each manufacturing facility in the supply chain (minute by minute).
 Demand planning and forecasting, coordinating the demand forecast of all customers and sharing
the forecast with all suppliers.
 Sourcing planning, including current inventory and forecast demand, in collaboration with all
suppliers.
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 Inbound operations, including transportation from suppliers and receiving inventory.
 Production operations, including the consumption of materials and flow of finished goods.
 Outbound operations, including all fulfillment activities, warehousing and transportation to

customers.
 Order promising, accounting for all constraints in the supply chain, including all suppliers,
manufacturing facilities, distribution centers, and other customers.
Organizations increasingly find that they must rely on effective supply chains, or networks, to successfully
compete in the global market and networked economy.
Our Suppliers
Demand Forecasting
Demand forecasting based on orders received instead of end user demand data will inherently
become more and more inaccurate as it moves up the supply chain. Companies that are removed from
contact with the end user can lose touch with actual market demand if they view their role as simply filling
the orders placed with them by their immediate customers.
Order Batching
Order batching occurs because companies place orders periodically for amounts of product that
will minimize their order processing and transportation costs. Because of order batching, these orders vary
from the level of actual demand and this variance is magnified as it moves up the supply chain. And it
helps the suppliers to sell their stock easily and within the given time. In fact this is useful for both suppliers
and us because we can buy stock in bulks and can save a bit of money on things.
Data Storage and Retrieval
The functional area of an information system is composed of technology that stores and retrieves
data. This activity is performed by database technology. A database is an organized grouping of data that
is stored in an electronic format.
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This database can be very useful for our suppliers, as they would know that what a business is
doing at the moment and what are they are going to do with us in future.
Open information sharing, which means an honest relationship with suppliers.
Effective communication with suppliers
All correspondence is documented.
Allows the supplier to prepare for the busy trading periods in the year and deliver enough stock.
More effective complaint process
Easy Return Management - Shorter turnaround time for requests
Our Customers
Improved feedback procedures which means improve relations with customers.
Our product is always within the customers reach as it decreases the amount of stock outs at their local
supermarket/store.
Happy customers means increased revenue, better trust of the customers and a better reputation.
Timely order fulfillment - e.g., fewer empty shelves as we are aware of the sales of our product in each of
Fairfax’s 200 outlets nationwide.
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CRM in Supply Chain

Customer relationship management (CRM) covers methods and technologies used by companies to
manage their relationships with clients. In this software Information stored on existing customers (and
potential customers) is analyzed and used. Basically corporate level strategy, focusing on creating and
maintaining relationships with customers CRM should identify factors important to a client promote a
customer oriented philosophy, adopt customer based measures, develop end to end processes to serve
customers, provide successful customer support , handle customer complaints ,track all aspects of sales
etc.
Benefits of implement:
Major benefit can be the development of better relations with existing customers, which can lead to
increased sales through better timing due to anticipating needs based on historic trends, identifying needs
more effectively by understanding specific customer requirements, identifying which of the customers are
profitable and which are not. This can lead to better marketing products or services by focusing on
effective targeted marketing communications aimed specifically at customer needs a more personal
approach and the development of new or improved products and services in order to win more business in
the future ultimately this could lead to enhanced customer satisfaction and retention, ensuring good
reputation in the marketplace continues to grow increased value from existing customers and reduced cost
associated with supporting and servicing them, increasing your overall efficiency and reducing total cost of
sales improved profitability by focusing on the most profitable customers and dealing with the unprofitable
in more cost effective ways
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7. Negative Impacts and

Risks
Distribution Network Configuration
Number, location and network missions of suppliers, production facilities, distribution centers, warehouses,
cross-docks and customers.
Distribution Strategy
Questions of operating control (centralized, decentralized or shared); delivery scheme, e.g., direct
shipment, pool point shipping, cross docking, DSD (direct store delivery), closed loop shipping; mode of
transportation.
Trade-Offs in Logistical Activities
The above activities must be well coordinated in order to achieve the lowest total logistics cost. Trade-offs
may increase the total cost if only one of the activities is optimized. For example, full truckload (FTL) rates
are more economical on a cost per pallet basis than less than truckload (LTL) shipments. If, however, a full
truckload of a product is ordered to reduce transportation costs, there will be an increase in inventory
holding costs which may increase total logistics costs.
Information
Integration of processes through the supply chain to share valuable information, including demand
signals, forecasts, inventory, transportation, potential collaboration, etc.
Inventory Management
Quantity and location of inventory, including raw materials, work-in-progress (WIP) and finished goods.
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Cash-Flow
Arranging the payment terms and methodologies for exchanging funds across entities within the supply
chain.
Supply chain execution means managing and coordinating the movement of materials,
information and funds across the supply chain. The flow is bi-directional.
Negative impacts of implementing a supply chain management
Implementing a new system on business on has its negative impacts
High cost: implementing a new system can be very costly for small business like Janet’s Pots. Speciall if
the cost is not carefully managed, great amount of money is invested in getting the new system in place.
Which needs monitoring and control and if all these are not carefully managed the project deviates from
the plant, hence leading to high cost and waste of time.
Performance of staff members’ not well evaluated: performance evaluation should re enforce and support
sales training. Designing appropriate performance evaluation is critically important to bring about sales
expertise, activities and outcome. Because performance evaluation can have a dramatic impacts on sales
force behaviours it is imperative that traditional performance evaluation be designed to motivate and
encourage appropriate supply chain behaviours and activities. Inappropriate performance evaluation may
in fact motivate behaviour that is countered productive to supply chain performance.
Training of staff members: it can be a long process and idle time would increase, staff members need first
hand materials with their companies internal logistic processes, system and capabilities. A full
understanding of the operational processes enhances inter-functional co-ordination and the staff level of
logistic expertise. From a tactical prospective, this expertise help staff manage logistic processes and
system to meet the needs of the supply chain partners. From strategic prospective, staff will understand
the logistic capabilities needed to meet the strategic goals of various supply chain partners and overall
supply chain.
Internal resistance to change: there is always a negative reaction to change in every business, people do
not like change and some staff members might have problems coming to terms with a new system. Staff
members might think the new system introduced might reduce their hours or lose their jobs hence they
would not like it.
Many mistakes at first: almost every business makes mistakes when implementing a new system, the first
bit of information obtained may be inaccurate. This in turn can result in key analyst may lose trust a new
system, this might also lead to losing trust from our customers and suppliers. The business might be
holding the wrong information on customers and suppliers due to the mistakes made. They might fail to
meet customer’s needs in time, it is said that satisfied consumers will be loyal customers who will continue
to purchase the supply chain goods and services. As well as influence others to purchase those same
goods and services.
Gaining trust from the suppliers and partners: because a new system is being introduced, the business
may have to change the way they operate meaning the suppliers ill need to change the way they work. So
far only the largest and most powerful manufacturers have been able to force radical changes such as this
The suppliers would be sharing a lot of information, something they may not want to do. We have
been willing to compromise and help them achieve their goals.
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8. Solutions to Avoid
Negative Impacts
There are always negative impacts whenever a new system is implemented into a business and
those impacts play the main role in the success or failure of a business.
There is always a solution to a problem and here we have some possible solutions towards the
negative impacts discussed earlier…
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Cost is always the main concern when we are implementing a new system into our business. We
have to invest a large amount of money into the business to get a new system. We can mitigate this cost
by having a few plans. These plans can be
Implementing a cheaper system whichever available in the market for the time being as for the
first year because we are not very sure about the future contractors and contracts. After the first year, if we
get more contracts than expected than we can always switch towards the more expensive options like
SAP and ORACLE. It will save money and if we don’t have that many contracts or the contracts go down
from expectation than we can carry on with current system and we don’t need to buy and implement the
expensive system.
We can implement an expensive system but then we should expand its cost over a long period of
time, that period can be 3, 5, 7 or 10 years. We can recover this cost over the desired period of time
accordingly. And it can be done by re-submitting a price grid to Fairfax on renewal of the current contract
so we can recover the cost of the investment in the mean time. But again, the future is not certain and we
are not sure about our future contracts and contractors and if we buy an expensive system and we are not
able to recover its cost in future than this would be a huge loss.
We should inform our suppliers about our new demands at least 3 to 6 months prior to the
activation of the new system. This is good for both suppliers and us as we can express our concerns
towards new things and same would be with suppliers as they can talk to us about their concerns and thus
the problems can be expressed and negotiated before the new system is even activated and we can avoid
a lot of convenience.
Notifying the employees about the change is always a good idea. We can tell our current
employees about the forthcoming changes into the current system and the changes into the IT systems.
This will allow the employees to think and talk about their concerns about the new system with each other
and with the senior staff. And as a result they would be less threatened about the new system. Employees
will make themselves ready for the new things and they would be excited rather than be threatened.
A possible way to cut the idle time is to hire some temporary skilled workers. They will work and cover the
idle time caused due to the training of current staff. As the present staff is learning new things the
temporary staff will work through the procedure for the time being.
Employing some skilled workers for long term is an option but definitely a costly one as it will cost
a lot to the business. We have to look through our profit margins and sales ratio before considering this
option as the wages bill will increase. Skilled workers will work thoroughly in a new system but that can be
resulted into some current employees losing their jobs and this will cause some uncertainty into other
employees.
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Motivation is always one of the best options to get your desired outcome. So, by motivating the
employees, we can get our desired outcomes and the employees will be happy with us too.
The staff should be given with flexible and reasonable time for training. Hustle makes things
worse not better. A flexible approach is good as people take their own time to learn things and they would
learn it at their own pace. It is always difficult to adopt new things but everyone will get used to it as the
time will go by.
Announcement of a formal reward system can be a good idea. A small reward given to a hard
working employee does not affect an employer’s financial position but give business a boost. Rewards on
given targets motivate employees and then the employer also knows about the hard working employees.
An intelligent employer knows how to get maximum output from their employees.
We should organize some seminars and meetings with our suppliers and our customers to
educate them about our new system and these will help our own employees too as they will also take part
in these seminars.
We should agree and sign Memorandum of Understanding and Confidentiality Agreements with
our current and future suppliers. This would put a confidence in the business and it would be a fair trade
for suppliers and us. We would know that our information is not leaked and the suppliers are loyal to us.
The last possible solution is Outsourcing. This is the most costly option and should be our last
choice. We can carry on like we are at the moment and hire a whole company who did everything
considering supply chain management for us. Then we don’t have to change anything regarding the
current system and we will do what we are doing at the moment except there are some new people who
will look through all the things and will put everything into the system. But outsourcing is one of the most
expensive things and we already have shown concerns about the costs and moreover it proves the
weakness of the business as it proves that the people who are working for the business are not capable of
adopting and implementing changes and new things which is a shame for any business in this world as
this is an IT age and everything is technology in every sense.
Risk management in supply chain
Risk management can be defined as the culture, processes, and structures that are directed towards the
effective management of potential opportunities and adverse effects. Risk assessment involves estimating
the level of risk – estimating the probability of an event occurring and the magnitude of effects if the event
does occur. Essentially risk assessment lies at the heart of risk management, because it assists in
providing the information required to respond to a potential risk.
In different level of risk management include in successful SCM for example:

1. Natural hazards (flooding, landslides),
2. Financial risk management
3. Investment related risk management
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4. Business related risk management.
Natural hazards:
Before investing in a new project it is very important to know about the natural hazards of around the
project site. After assessing the risk its good to start the project if the risk is minor.
Financial risk management:

Financial risk management is the practice of creating economic value in a firm by using financial
instruments to manage exposure to risk, particularly credit risk and market risk. Other types include
Foreign exchange, Shape, Volatility, Sector, Liquidity, Inflation risks, etc. Similar to general risk
management, financial risk management requires identifying its sources, measuring it, and plans to
address them.
Investment related:
Depending on the nature of the investment, the type of 'investment' risk will vary. High-risk investments
have greater potential rewards, but also have greater potential consequences. A common concern with
any investment is that the initial amount invested may be lost (also known as "the capital"). This risk is
therefore often referred to as capital risk. For example, in Janet’s Pots before investing huge money in
SCM software to fulfill the requirements of Fairfax as the length of the contract length is up to one year. It
may be extended in future but still its not guaranteed.
Business Related:
The risk that a company or project will not have adequate cash flow to meet financial obligations; thus
causing the business to file for bankruptcy. Before any transaction can be undertaken, each party must be
able to supply something the other party demands. To overcome this mutual coincidence problem, some
communities had developed a system of intermediaries who can warehouse and trade goods. However,
intermediaries often suffered from financial risk. Whilst higher risk normally implies higher overall rewards,
this is not always the case. For example a high-risk mortgage client may be required to pay a higher
interest rate on their mortgage repayments in order to be accepted as a bank's customer.
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9. Conclusion
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Janet’s Pots

Supply Chain Management System

Janet’s Pots – Supply Chain Management System

3. Current System Analysis 5

4. E-Business and Extranet 6

5. Supply Chain Management 7

Janet’s PotsError: Reference source not found – Supply Chain Management

6. Positive Impacts of Implementing an SCM System 11

7. Negative Impacts and Risks 14

8. Solutions to Avoid Negative Impacts 15

Janet’s PotsError: Reference source not found – Supply Chain Management

Aenean iaculis laoreet arcu

Janet’s PotsError: Reference source not found – Supply Chain Management

Janet’s PotsError: Reference source not found – Supply Chain Management

3. Current System Analysis

Current Information Technology and System Assets

 5 x free standing workstations all connected to the world wide web

 All contain the Microsoft Office 2007 software

Limitations of the Current System

Local Area Network (LAN)/Intranet

Formal Contracts, Informal Communication

At the moment, communication between us and our customers/suppliers are not

Janet’s PotsError: Reference source not found – Supply Chain Management

4. E-Business and Extranet

 Provide superior customer service

 Streamline business processes

Why is an Extranet Used?

Janet’s PotsError: Reference source not found – Supply Chain Management

Janet’s PotsError: Reference source not found – Supply Chain Management

5. Supply Chain Management

What is Supply Chain Management?

A more common and accepted definition of Supply Chain Management is as follows,

Elements of Supply Chain Management

Janet’s PotsError: Reference source not found – Supply Chain Management

Thomas Waligum, What Is Supply Chain Management November 2008

Managing a Supply Chain

Janet’s PotsError: Reference source not found – Supply Chain Management

Categories of Supply Chain Management Applications

(Russell Kay, Supply Chain Management , 2001)

SAP Supply Chain Management

‘Planning, Execution and Collaboration across the supply chain

Janet’s PotsError: Reference source not found – Supply Chain Management

Oracle Supply Chain Management

‘Best-In-Class, Complete, Open, Integrated solution that

What Works for Us?

Janet’s PotsError: Reference source not found – Supply Chain Management

Faster response to changes in supply and demand

Increased customer satisfaction

Compliance with regulatory requirements

Improved cash flow

Janet’s PotsError: Reference source not found – Supply Chain Management

Greater synchronization with business priorities

Janet’s PotsError: Reference source not found – Supply Chain Management

Improve inventory management, facilitating the successful implementation of just-in-time stock

Activities of Supply Chain

Janet’s PotsError: Reference source not found – Supply Chain Management

 Strategic partnerships with suppliers, distributors, and customers, creating communication

 Information technology infrastructure to support supply chain operations.

 Where-to-make and what-to-make-or-buy decisions.

 Aligning overall organizational strategy with supply strategy.

 Production decisions, including contracting, scheduling, and planning process definition.

 Inventory decisions, including quantity, location, and quality of inventory.

 Transportation strategy, including frequency, routes, and contracting.