Exam 15: ERP Systems and E-Commerce

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To achieve CPFR, connections between enterprise systems of upstream and downstream supply chain partners must be as seamless as possible. Inter-enterprise view integration likely will focus on the resource exchanges in the value system level model. For CPFR a supplier of inventory and its customer need to be integrated. Therefore the focus is on the exchange of inventory for cash. If both enterprises have REA-based systems, the economic decrement (sale) event in the supplier's revenue cycle (sale) is essentially the same as the economic increment (purchase) event in the customer's acquisition cycle. Similarly, the economic increment (cash receipt) event in the supplier's revenue cycle is the same as the economic decrement (cash disbursement) event in the customer's acquisition cycle. Integration of these separate enterprise views requires a common labeling system for these events. For example, the label "Inventory Transfer" could be used to represent the event in which inventory title is passed from supplier to customer, instead of Sale and Purchase. "Cash Transfer" could be used to represent the event in which cash possession passes from customer to supplier. The agents involved need to be recorded, but cannot be labeled as internal and external. More objective labels must be used. Political issues also exist. For example, where will the data reside, who will enter the data, who will own the data, and who will maintain the data?