E-Supply Chain Management

Prepared for B.
Com 4
th
Semester, 2011
St. Xaviers College

ASHIS MITRA, IT DEPT, B.COM
ST. XAVIER'S COLLEGE
Concept and Definition

What is a supply chain?

Supply chain is a process umbrella under
which products are created and delivered to
customers.
It includes suppliers, manufacturers,
distributors, retailers and customers. It also
includes transporters and warehouses.
In essence, it consists of all parties involved,
directly or indirectly, in fulfilling a customers
request.

What is supply chain
management?
Supply chain management is the co-
ordination of entities, activities,
information and resources involved in
moving a product or service from
supplier to customer; where entities
consist of manufacturers, service
providers, distributors and retail outlets.
In other words, supply chain
management means transforming
companys supply chain into an
optimally efficient, customer-satisfying
process, where the effectiveness of the
whole supply-chain is more important
than the effectiveness of each individual
department.

What is e-supply chain
management?

When the co-ordination for managing the
supply chain takes place by using Internet
technologies it is known as e-supply chain
management.
Inter-enterprise integration is a major focus
of e-supply chain management.

Major Features of SCM
Supply chain management is identified
by the following features:
1. Material flow.
2. Financial flow.
3. Information flow.
1. Material flow. It is in the direction
from supplier to customer through the
chain. It involves procurement of the
materials, transformation of these
materials into finished products and
distribution of these finished products to
the customers.
2. Financial flow. It involves payment
options, credit card information, credit
terms, payment schedule etc. It is in the
direction from customer to supplier as
payment for products or services
originates from customer and end at
supplier.

3. Information flow. In todays e-
supply chain management flow of
information is considered to be as
significant as the flow of material and
finance. It involves product information,
demand forecasts, order status report,
delivery report, customers
communication, etc. Information is
always two-way, particularly in e-
business.

Inter-enterprise Integration and
Types of Supply Chain
Inter-enterprise integration
Enterprise integration means when
different functions of an enterprise are
integrated into one. But supply chain
management is moving toward inter-
enterprise integration.

Different components of a supply chain like
supplier, manufacturer, retailer, etc. are
separate enterprises. These enterprises
create a collaborative system for inter-
enterprise integration.
In this system, each component of a supply
chain has access to required information. As
a result, inventory tends to zero and just-in-
time (JIT) management can be introduced.
So, inter-enterprise integration brings down
inventory cost, as well as production and
distribution costs.
Types of supply chain for inter-
enterprise integration
Responsive: This kind of supply chain
responds quickly and accurately to
customers needs. ATP(available to
promise) is an important feature of this
responsiveness. ATP systems provide
real-time integrated checks throughout
the entire supply chain.

Adaptive: This kind of supply chain can
rapidly be reconfigured to adapt to
changing consumer demand. Adaptive
supply chain helps the companies to
respond to changing business
conditions and consumer requirement.
Intelligent: It is a dynamic kind of
supply chain and continuously fine-
tuned to perform well.

E-Supply Chain Planning

Major components of e-supply
chain
Advanced scheduling and
manufacturing planning: It provides detail
co-ordination of all manufacturing and
supply efforts based on individual customer
orders. Scheduling is based on real-time
analysis of changing constraints throughout
the process, from equipment
malfunctioning to supply interruptions.
Scheduling also creates job schedules for
managing the manufacturing process as
well as logistics.

Demand forecasting: This module
supports a range of statistical tools and
business forecasting techniques. It takes
into account changing market scenarios
and economic factors while making
decisions.

Transportation planning: This
programme facilitates resource
allocation and execution to ensure that
materials and finished goods are
delivered at the right time and at the
right place, according to the planning
schedule at a minimal cost. It considers
such variable as transportation mode
like railways, trucks, airlines, and
availability of each mode.

Distribution planning: This is
integrated with demand forecasting,
manufacturing schedule and
transportation planning to reach the
customer. This module addresses
customer-specified requirements.

Order commitment: It is a system that
allows vendors to accurately quote
delivery dates to customers by providing
real-time detailed visibility into the entire
fulfillment cycle. Order commitment is
linked to all other modules so that
accurate delivery of goods and services
can be guaranteed.

E-supply chain fusion

What is E-supply chain fusion?

Process of e-supply chain fusion
involves the migration from existing
non-integrated supply chain to more
effective integrated supply chain and
thereby creating a tightly woven
supply chain.

Four stages of supply chain
fusion
Stage I - Information sharing: Well-
established and effective communication
channel is required at the 1
st
stage. For
example, the consumers can interact
effectively with the entire enterprise from
a single store or Website.

Stage II Joint performance
measurement: Key challenges
include creating performance
measurement and developing a clear
understanding of the costs and
benefits involved in supply chain
integration. Collaborative planning
processes are created in this stage.

Stage III Realignment of work:
Through the process of collaboration
decision-making is decentralized and
work load is shared among the
enterprises.

Stage IV Redesigning products and
processes: Products are processes are
redesigned so that work becomes easier
and more efficient. A major challenge is
to include the entire supply chain in the
interenterprise process reengineering
efforts.

Management issues in e-supply
chain fusion
1. Determining the right e-supply
chain structure: Need for cost-
efficiency does not permit to maintain a
large inventory of finished products for
the customers. Market demands may
change and the price-structure may also
undergo changes. For this reason, it is
important to maintain the right kind of e-
supply chain structure to ensure right
product at the right time.

2. Enabling effective differentiation
capabilities: Organizations develop
strategies for competitive differentiation,
offering customers something unique
that the competition does not have.
Differentiation is in terms of products
and services and also in terms of
performance standard. Build-to
order(BTO) business models are used
for this purpose.

3. Facilitating effective order-
fulfillment capabilities: Accurate order-
fulfillment is challenging and offers a
great opportunity for reducing costs and
improving customer service
simultaneously. An integrated supply
chain is critical to order fulfillment.
Effective supply chain management
configures the chain to respond to order.
4. Determining the right infrastructure
capabilities: Creation of a real-time
supply chain management infrastructure
is a major task for an organization.
Planning, selection and implementation
of SCM solutions is becoming more
complex with the change of technology
and with the increase of the number of
business partners of a company.


E-Supply Chain Management

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