Task 2 Typical warehouse inventory system from procurement, receiving to storage inventory (example ERP, etc) of the company same as task 1 How the data is collect? What is the use of the data collected? Table of content 1. Abstract (100 words) 2. Introduction (100 words) 3. Lecturer notes: Section 1 to 4 (1200 words) • Cognitive Hierarchy  theories on exploitation innovation & exploratory innovation • ICT  Describe technologies  Purpose: investing in process or domain to provide evidences  Exploitative or exploratory • Issues  Variables influency ICT  Factors influencing SCM 4. Conclusion (100 words) Lecturer Notes Section 1 ICT for exploitation Likely to be associate with business process • Performs structured, repetitive tasks • Accompanies by changes to inter-organizational business process • Create opportunities for suppliers to redesign their planning & processes to get efficiency benefits • Suppliers choosing to make those changes derive greater benefits ICT for exploration Likely to be associate with domain knowledge • Unstructured tasks such as messaging, reporting, etc. • Provide a wide array of date on a regular basis (email, discussion forum) • Become sensitive to idiosyncratic features of the customers’ requirements Section 2 ICT Investment Purchases can reveal intent & outcomes that would be derived from it • Exploitation (automation activities)  Extend/improve existing certainties  Goals are to improve operational efficiencies Example: o Faster invoicing & payment settlement o Vendor manage inventory (VMI)  Apply variance reducing strategies  Streamline activities Example: o Perform activities efficiency & consistently  Greater control over process execution • Exploration (information exchange)  Solve old problems or to create value  Apply variance seeking strategies o Reassess current approaches & develop new solutions Example: • Develop new products & services • A richer understanding of your customers/suppliers & nuances of their exchange o Immediate payoffs uncertain Example: • Involve risk taking; experimenting • Innovate the products • Ability to recognize & respond to changes in the process/products Section 3 Relationship Specific Investment • Business process investment through ICT (exploiting)  Develop standard operating procedures for efficient task execution o Firm’s operating processes, administrative process & quality control processes o Creates exit barriers for other companies o Relationship termination result in forgoing benefits o Enhance firms dependence on the supplier if the latter continues with the relationship o Increases suppliers bargaining power • Domain Knowledge Investment through ICT (exploration)  The degree to which a suppliers’ critical expertise are particular to requirement of firm Example: o New product development Example: • Facilitate effective action Planning and execution • Resolve ambiguities o Could be value creating Example: • Intimate understanding of firm’s customers • Firm becomes reliant on suppliers Section 4 Variables that can influence investment ICT • Product uncertainty  Arise from short product life cycles  Increases information processing demands  Increases likelihood of unanticipated contingencies • Firm replace ability  Reflects the ease with which a supplier can make a transition to work with others  Make suppliers more vulnerable to exercises of power from their customers • Firm size  Gives relative bargaining power  Size of resource base • Length of association  Greater benefits in one period leads to higher level of engagement in subsequent period