Lecture 13: Redesign Supply Chain Processes

References:

[1] Industrial products and services categorization standards
http://en.wikipedia.org/wiki/RosettaNet

[2] Message type and description of RoettaNet message

http://www.edibasics.co.uk/edi-resources/document-standards/RosettaNet.htm

[3] Message type and description of SWIFT message

http://www.edibasics.co.uk/edi-resources/document-standards/swift.htm

[4] Society for Worldwide Interbank Financial Telecommunication

http://www.swift.com/

[5] Realising the Benefits of SWIFT for Corporates

http://www.gtnews.com/article/6888.cfm
[6] What is EDI

http://www.edibasics.co.uk/what-is-edi/

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Recap of last lecture

This lecture mentioned misalignments in supply chain of industries may bring along impacts such as low efficiency, higher costs and incompatible data format.  The misalignments aspects included

• Plug-and-play e-process
• Information Coordination
• Knowledge sharing

By increasing the alignment level of electronic interfaces, information flow and information sharing between these supply chain companies, overall beneficial effects would be bring to these companies.  Thus there 3 areas: production processes, manufacturing of new products/services and knowledge sharing, should be of main focus of improvement.  Value creation of the whole supply chain would then be achieved.

RosettaNet is one of the Electronic Data Interchange (EDI) that offers open partner interface processes (PIP), it was joint by over 30 leading companies (totally 500 members, as in April, 2012[1]) within the IT industry. It provides unify guideline and electronic interfaces for the exchange of qualitative information rather than normal transactional/status information.  It based on XML to achieve standard among the global electronic/semiconductor industry.  Thus process implementers would be benefited by getting interactions and information useful for their sub-processes along different position in the supply chain.

Message type and description of RosettaNet [2]

The advantage of RosettaNet over EDI though, is that it provides real-time processing of business data for supply rather than some EDI’s batch-processing.  Moreover, RosettaNet is less complicated to operate when due with larger volume (because of it’s efficiency, specify to use in supply chain industries) than some general EDI, which is more suitable if company is doing an intermediate or even larger e-business.

traditional paper document transactions [6]

purchase order after implementing EDI [6]

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Topic: Brief overview of a similar EDI in the financial supply chain - SWIFT

There are many categorization standards used by business process interfaces.  Example are RosettaNet, SWIFT, ETIM and eCl@ss[1].  Here would review one of the standard interface – SWIFT.

Standard and mission

Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a financial messaging network that exchanges messages across banks.  Like RosettaNet, it is another quite popular interface and used by 239 banks in 15 countries [4].  Instead of using XML like in RosettaNet, it uses bank identifier codes (BICs) to identify exchange message, services and even software.  Therefore, BIC can be identified by well-known financial processing systems; and these standards are maintained under cooperation of international organizations for message defines standards.

Message type and description of SWIFT [3]

Different interface provide different targeting industries.  And for SWIFT, it provides services mainly for securities, treasury & derivatives, cash management and trade services.  SWIFT is also used for transfer of important message among banks, thus one of the feature is that SWIFT allow secure messages sent with encryption standard.  This provides usability to certain business processes among financial institutes that uses SWIFT.  Since it is a common interface rather than a system or database, it does not provide any account information storage or provide system functions such as clearing/settlement.

Major users of SWIFT [4]

Benefits of this interface 

-Reduced operational costs and risks [4]

-Secure, low-cost and connection in global manner

-Flexibility and scalability

-Improved customer service

Other illustrated benefits from the SWIFT website [4]

Further external explanations can be found under section “The Last Mile” in [5]’s website.

Financial supply chain is more the less getting benefits similar to product supply chain mentioned in lecture, this basically covers:

• reduced delay in processes due to timely and automation after implementing the interface
• reduction in manual and paperwork processes
• increased knowledge sharing, this offers better CRM and increase market interaction
• update/synchronization of information

Conclusion

After studied some other kinds of interface such as the SWIFT above, we can understand that e-business may have at first their own internal standard to coordinate its internal message coordination; however, to increase competitiveness and alignment within the industries’ market players, share of information/knowledge, process alignment are essential steps to keep the business’ interaction up to date with the market.  As a result, PIP or other EDI exchange standards are required to provide along external message coordination to achieve overall efficiency and performance of the business.  EDI standards and interfaces is not just about having a long collaborative process joint by several enterprises, but together business can share and collaborate higher quality information, through having these standards.