Black & Decker Supply Chain Thesis

Excerpt from Thesis :

The Black & Decker DOM system aligns with the Distributed Order Management (DOM) Hierarchical Model shown in Figure 1 as is shown in the Appendix of this study. This model conceptually illustrates how the Black & Decker supply chain, DOM, and distribution networks are integrated with each other (Johnson, 2003, et.al.).

The Data Services of Black & Decker, as defined by its customer- and shipment history databases, anchor the model, followed by Application Services, Presentation Services, and a separate Presentation Services specifically for Internal and External Constituents of the logistics provider.

The Master Data Services component is where Black & Decker 'normalizes and synchronizes data on customers, products, accounts, and suppliers is the primary building block. There are several techniques Black & Decker relies on building a system of record from database consolidation to the development of virtual objects that are a composite of various systems. Regardless of the overall data management strategy, the DOM architecture within Black & Decker message centric and have a metadata-driven data model. These capabilities allow the Black & Decker DOM system to understand where key data resides, how to get it, and how to transform or normalize the data to ensure that there is a high level of order accuracy and sufficient velocity of transactions to ensure profitability is maintained. In addition to transaction or operational data, Black & Decker uses information systems-based strategies and investments to support the creation of its own series logical analytical data models which feed customer-specific data to a centralized warehouse in order to measure and manage the performance of the entire logistics process and create analytical reporting for all internal teams relying on this data.

In addition to the DOM architecture defined above, Black & Decker also has defined three critical application services that heave led it professionals to call their distributed order management system state-of-the-art in terms of its logistics functions. These three critical components include event and state logistics management, order brokering and integration framework and Business Process Management (BPM) support. The first of these three, the event and state logistics management, actually is a Web Service that that monitors the state of any Black & Decker order throughout its lifecycle as it travels between disparate systems, both internal and external. Coupled with the state management engine is event management, which monitors the Black & Decker transport request or order cycle to identify issues related to time and quantity in order to identify and manage exceptions proactively. The order broker or integration framework is designed by Black & Decker to capitalize on technological advancements in messaging found in leading Enterprise Application Integration (EAI) systems (Johnson, 2003, et.al.). Black & Decker uses these systems for breaking down all orders into smaller processes that ensure each shipment is managed as optimally as possible. The use of constraint-based technology is pervasive in this area of the Black & Decker Distributed Order Management platform. The order definition is then connected to the Black & Decker order broker with can also be its 3rd party logistics business, which can be based on a standard EAI system or Black & Decker's own messaging layer that prepares the instructions for the various parties and defines the format of the business documents and communication methods. Finally the BPM component is used by internal Black & Decker business and system analysts to graphically design and depict processes and workflows inside many of the Black & Decker applications and across multiple applications to enable and manage an end-to-end process.

Black & Decker has also defined a series of twelve different key modules that align with the Distributed Order Management (DOM) Hierarchical Model as suggested by Johnson (2003, et.al.) Included in these are supports for business logic to assemble and configure customized process workflows for any existing or new Black & Decker subsidiary or business offering. The launch of Black & Decker private label initiative for example was completed using the components in this area of their Distributed Order Management Module. The components of this module include the following. First there is the package and logistics configuration and quote module, which include support for simple rules-based configuration to more complex attribute or parametric configurations. Pricing and contract management including support for global taxation, Global credit management which includes the ability to aggregate credit information from multiple internal and external sources, and services and product catalogs with include the ability to support, aggregate, and manage multi-vendor catalog within Black & Decker all are included in this specific series of components in the Distributed Order Management (DOM) Model as interpreted by Black & Decker. Additional components include order promising logic, a critical aspect of Black & Decker's business model as it includes supply chain metrics of Available-to-Promise (ATP) and Capable-to-Promise (CTP). In addition, sourcing and allocation which includes support for substitutions and inventory reservations and order visibility, which is the ability to track orders internally and through logistics or contract manufacturing partners is included. The critical area of inventory visibility the ability to synchronize all shipment dates and requirements to fulfill demand across the entire Black & Decker supply chain network, support for automated replenishment and Vendor Managed Inventory (VMI), in addition to delivery management which is the traceability of delivery through logistics partners and providers all form the foundation from an information systems perspective for the company's globally-based business model Including the ability to track delivery through logistics partners and normalize data based on performance management. Black & Decker has also included within these components specific elements for their ongoing post-sales services business, encompassed within their Service Lifecycle Management (SLM) initiative. Included are service management which is a Web Service that is aimed at synchronizing aftermarket processes, such as parts, returns, repairs, and field service and support for consolidated settlement, including the ability to create a single invoice and all the necessary credit and debit transactions for any Black & Decker customer, regardless of how many or how few services are purchased. This gives Black & Decker a significant competitive advantage in global markets where manufacturers especially have begun relying on them for supply chain and third party logistics support. This approach to a 360 degree view of all activity from a customers' perspective has also created entire new markets, which in comparable terms to Kim and Mauborgne research of blue ocean strategies (2004, pp. 76, 77, 78) is revolutionizing how logistics providers define commitment levels, pricing and dates then fulfill them through process optimization (Kim, Yang & Kim, 2008, pg. 552).

The Presentation Services layer of the Distributed Order Management (DOM) Hierarchical Model has been highly customized by Black & Decker across all four operating divisions, as the corporation has worked to create a transparent, 360 degree view of all activity by customer. The key requirement Black & Decker has in using this specific area of their Distributed Order Management platform is in delivering the flexibility of allowing internal users to customize applications, interfaces and portals to their own specific requirements. In addition, Black & Decker has learned the continual development of these specific presentation services that their mapping to and capitalizing on internal processes contribute to greater transaction accuracy and velocity. This is primarily due to the fact that resistance to change is minimized as the interfaces of each application can be tailored to the unique and highly specific needs of each employee, workgroup or division. Black & Decker relies on a portal framework in which to define the development, additions to and replacement of applications that reside in this layer of their distributed order management system. In addition, Black & Decker relies on role- and context-based definition of application, identification of Web Security Services, and the continual support of an Enterprise Content Management (ECM) platform that is used as the overall system of record for customer-based interactions. Taken together, the Black & Decker distributed order management platform has been specifically built to capture, validate, source, distribute and settle service transactions.

Analyzing Black & Decker Supply Chain Performance

As accuracy, logistics optimization according to constraint- and linear programming all measured against on-time performance are the catalysts of the Black & Decker business model measures and metrics of performance are critical for the successful functioning of the company's supply chain.

Table 1: Black & Decker Measures of Performance lists all the specific metrics that Black & Decker Corporation relies on to ensure it fulfills its customers' expectations while at the same time optimizing internal supply chain performance. The Perfect Order is a composite metric that takes into account the four following components: one-time delivery percentage; complete order percentage delivery; percentage of shipments delivered damage-free, and the percentage of orders that have accurate invoicing. These four attributes of on-time delivery, percentage of orders shipped complete, percentage of…

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