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1. 2. A key to our success is matching the stream of orders to our production and purchasing schedules. We try to avoid excess inventory of parts, and yet we need to have enough parts on hand to fulfill orders. We need to link the demand for our products to the purchasing of parts and supplies. Do you have any ideas on how we can match our purchasing of supplies to the stream of incoming orders? You can suggest here that most supply chain management systems are linked to the order entry system. Based on incoming orders, SCMs will produce data that is fed into the production system, which, in turn, results in a list of parts needed and schedule requirements. Because this position is closely linked to SCM, you should do research on SCM systems to understand their functionality. 3. We’d like to use social media as a way to enhance communications with our suppliers. Do you have any suggestions about how we might build a social network to support our supply chain? Here you can talk about your experience with LinkedIn, Facebook and Twitter, especially about how business firms can use these platforms to build a social community of vendors and manufacturers. The process of building a social network for vendors is very similar to building a social network of customers. Use of video, blogs, comments, newsfeeds, and posts can be very valuable in creating a community of vendors. 4. We are trying to reduce costs of our supplies by participating in a number of B2B e-commerce marketplaces where vendors compete with one another on price and quality to become one of our suppliers. What do you know about B2B e-commerce marketplaces and how they might be helpful for us? You might point out here the different kinds of B2B e-commerce marketplaces. The firm should use e-distributors, such as Amazon Business or eBay Business, to obtain the lowest cost for indirect supplies. The firm could also participate in an e-procurement network such as SAP Ariba to obtain competitive quotations for supplies and direct inputs. 5. We are trying to integrate our vendors more closely into our business planning and even the design of new products. We’re looking for a collaborative effort from our suppliers and greater visibility into our supply chain both for our purposes and our vendors’ purposes. What do you know

12.7 Case Study Elemica: Cooperation, Collaboration, and Community Elemica is a B2B cloud-based, digital supply chain platform aiming to revolutionize the entire supply chain of the chemical, plastics, rubber, energy, pharmaceuticals, food and beverage, and other process manufacturing industries worldwide. Its mission is not just to foster cooperation on a one-to-one, inter-firm basis or collaboration on multi-firm projects, but instead to lift all boats on an industry tide by providing an inter-firm platform for communicating B2B information, and thereby making all firms more efficient. about collaborative commerce? What have you learned about supply chain visibility? You could refer to private B2B networks composed of a single manufacturing firm that owns the network and the group of suppliers that work with the manufacturer to design and build component parts, similar to that created by Procter & Gamble. In this kind of collaborative effort, both the vendors and the ultimate buyer of components work together to create and design inputs, and both benefit from the results.

12.7-6 Full Alternative Text Elemica today processes more than $1 trillion in annual transactions across more than 7,500 process manufacturing industry trading partners; 16,000 network participants around the world, including more than 100 of the largest global process manufacturers; thousands of their direct material suppliers; more than 500 logistics service suppliers; as well as thousands of end customers. Clients include AkzoNobel, BASF, Bayer, BP, Campbell’s, Continental, Dow, DuPont, ExxonMobil, Goodyear, Levi’s, Pepsico, Pirelli, and Westinghouse. Elemica was an early example of a B2B e-commerce industry consortium. In the late 1990s, senior leaders at some of the larger chemical companies began to focus on changes in technology that made the adoption of information technology and the tools of e-commerce more appealing. The questions were how to best use these advances to

benefit their businesses and how to establish industry standards for electronic transactions to make them accessible and attainable for all. Unlike the automobile industry or the airline industry, where a few companies dominate, the global chemical industry is made up of many companies of all sizes. In addition, unlike many other industries, chemical companies often buy the output from other chemical companies to use as raw materials for their products. Thus, chemical companies are often customers of one another as well as competitors. Leaders from companies such as Dow and DuPont determined that a cooperative alliance would be the most efficient way to move forward. They were met with initial skepticism by marketing and sales staff, who worried that online procurement would negatively affect relationships. Senior corporate leadership wasn’t sure that e-commerce would be useful for the chemical industry. And companies were cautious about the expense of investing in the infrastructure necessary for e-commerce. However, there were compelling opportunities that were impossible to dismiss, including lowering costs, creating closer connections with customers and suppliers, and differentiating companies on something other than price. At the same time, new startups were making traditional chemical companies nervous. What would happen if their efforts to use information technology to streamline an inefficient supply chain helped them capture market share? In other words, if the more traditional companies didn’t move forward, they might end up losing the revenue race. When Dow began looking at startups that were using e-commerce and talking to their customers, they found that customers were concerned about making an investment to establish online connections with multiple firms. Dow and DuPont decided that the best and most economically efficient option was to offer customers the choice of a neutral one-to-one link. This would remove the obstacle of multiple connections. A strong, third- party network addressed the community concern about loss of control. The two companies decided to create and invest in a neutral e-commerce company, partnering with other companies to create the critical mass needed to make it viable. All participants shared the common goal of creating a neutral platform to facilitate inter-company transactions and enhance business processes. Ultimately, 22 leading companies in the chemical industry (including oil and natural gases) were involved in the launch of Elemica in 2000. In succeeding years, Elemica has expanded far beyond chemicals to encompass other major process manufacturing industries.

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