- Starting a e- business takes ideas, capital, and technical savvy. Operating one however takes Supply Chain Management (SCM) skills.
- A successful SCM strategy is based on accurate order processing, just in time inventory management, and timely order fulfillment.
- Many companies today are making supply chain management a top strategic objective and major e-business application development initiative.
- Supply chain management helps companies get the right products to the right place at the right time, in the proper quantity and acceptable cost.
- The goal of SCM is to manage this process efficiently by forecasting demand, controlling inventory, enhancing the network of business relationship a company have with customers, suppliers, distributors and others.
- To achieve this goal many companies today are turning to Internet technologies to web- enable their supply chain processes, decision making, and information flows.
Table of Contents
Electronic Data Interchange (EDI)
- Electronic data interchange was one of the earliest uses of information technology for SCM.
- EDI involved the electronic exchange of business transaction documents over internet and other network between supply chain trading partners.
- EDI software’s is used to convert a company’s own document format into standardized EDI formats as specified by various industry and international protocol.
- EDI is an example of almost complete automation of an e-commerce supply chain process.
The Role of Supply Chain Management (SCM)
Supply chain management (SCM), which optimizes the flow of products, services, information, and funds, is essential to the seamless operation of e-businesses. In e-business, SCM plays the following crucial roles:
Inventory Management
It guarantees that stock levels are tracked in real time and optimized to satisfy customer demands without going over or under.
Order Fulfillment
It streamlines the process from order placement to delivery, improving speed and accuracy.
Cost Efficiency
It reduces operational costs by optimizing procurement, production, and distribution processes.
Customer Satisfaction
It uses effective supply chain procedures to improve delivery times, product availability, and the general customer experience.
Integration with Technology
It uses e-business technologies for demand forecasting, transparency, and real-time tracking, such as blockchain, IoT, and AI.
Benefits and Challenges of SCM
- Creating a real time SCM infrastructure is a discouraging and ongoing issue and often a point of failure for several reasons.
- SCM can provide companies with key business benefits such as faster, more accurate order processing, reductions in inventory level, quicker times to market, lower transaction and material cost and strategic relationship with the suppliers.
- However, developing effective systems has proven to be complex and difficult application of information technology to business operations.
- SCM simplifies procedures and cuts down on waste, but it can be difficult to manage several partners and suppliers.
- SCM reduces the cost of inventory and production, despite the high cost of sophisticated tools and systems.
- SCM guarantees improved service and quicker delivery, but demand variations make planning challenging.
- Forecasting is enhanced by real-time data, but inefficiencies may result from delayed data.
Trends in SCM
- The trends in use of SCM today as three possible stages in implementation of SCM System.
- In first stage the company concentrates on making improvement to its internal supply chain process and its external process and relationship with suppliers and customers.
- In the stage two, a company accomplish substantial supply chain management applications by using selected SCM software programs internally, as well as externally via intranet and extranet links among suppliers, distributors, customers and other trading partners.
- In the third stage, a company beings to develop and implement cutting- edge collaborative supply chain management applications using advanced SCM software, full service extranet links, and private and public e-commerce exchanges.
Conclusion
For modern businesses to increase customer satisfaction, cut expenses, and streamline operations, supply chain management, or SCM, is essential. SCM guarantees the seamless movement of products, services, and information throughout the supply chain by utilizing cutting-edge technologies and effective procedures.
SCM has many advantages, such as increased productivity, profitability, and global reach, but it also has drawbacks, including complexity management, risk mitigation, and sustainability. Companies are more likely to obtain a competitive advantage in a changing market if they successfully handle these issues and implement creative solutions.
In summary, supply chain management (SCM) is a strategic tool that promotes long-term success, resilience, and business growth. It is not just about operational efficiency.
Frequently Asked Questions (FAQ)
What is SCM?
Supply chain management is the process of controlling the movement of products, services, data, and funds from suppliers to consumers.
Why is SCM important?
SCM guarantees seamless business operations, boosts customer satisfaction, lowers expenses, and increases efficiency.
What is the role of SCM in e-business?
SCM facilitates e-business by streamlining online operations’ logistics, inventory control, and order fulfillment.