Skip to main content

Supply Chain/Value Chain

Introduction 
Supply Chain encompasses all activities associated with the flow and transformation of goods from the raw materials stage (extraction), through to the end user, as well as the associated information flows. Materials and information flow both up and down the supply chain. 

Supply Chain Management is the integration of these activities, through improved supply chain relationships, to achieve a sustainable competitive advantage.

Supply chains may be long and complex, and may involve many different business partners. One frequently see problems in the operation of the supply chains. These problems may result in delays, in customer dissatisfaction, in lost sales, and high expenses that result from fixing the problems once they occur. World-class companies, attribute much of their success to effective Supply Chain Management (SCM), which is largely supported by IT and e-commerce technologies.

When a supply chain is managed electronically, usually with web technologies, it is referred to as an e-supply chain. 

Supply Chain Management (SCM) involves the coordination of all supply activities of an organisation from its suppliers and delivery of products to its customers (figure 1.12):


Figure 1.12 introduces the main players in the supply chain. In figure 1.12(a) the main members of the supply chain are the organisations that manufacture a product and/or deliver a service. 

For most commercial and not-for-profit organisations one can distinguish between upstream supply chain activities which are equivalent to buy-side e- commerce and downstream supply chain activities which correspond to sell-side e-commerce.

Supply chain management includes not only supplier and buyer, but also the intermediaries such as the supplier's suppliers and the customer's customers (figure 1.12(b)). Indeed, figure 1.12(b) is a simplification of some companies which may have first-tier suppliers, second-tier and even third-tier suppliers or first-, second-, and higher-tier customers. Because each company effectively has many individual supply chains for different products, the use of the term 'chain' is limiting and supply chain network is a more accurate reflection of the links between an organisation and its partners. The existence of this network increases the need for electronic communications technology to manage and optimise this network.

Technology is vital to supply chain management since managing relationships with customers, suppliers and intermediaries is based on the flow of information and the transactions between these parties. The main strategic thrust of enhancing the supply chain is to provide a superior value proposition to the customer, of which efficient consumer response is one method.

Success of an e-supply chain depends on the following factors: 
  1. Ability of All Supply Chain Partners to View Partner Collaboration as a Strategic Asset: It is the tight integration, and trust among the trading partners that generates speed, agility, and lower cost. 
  2. Information Visibility along the Entire Supply Chain: Information about inventories at various segments of the chain, demand for products, delivery times, and any other relevant information must be visible to all members of the supply chain at any given time. Therefore, information must be managed properly with strict policies, discipline, and daily monitoring. 
  3. Speed, Cost, Quality, and Customer Service: These are the metrics by. which supply chains are measured. Consequently, companies must clearly define the measurements for each of these four metrics together with the target levels to be achieved. The target levels should be attractive to the business partners.
  4. Integrating the Supply Chain more Tightly: An e-supply chain will benefit from tighter integration, both within a company and across an extended enterprise made up of suppliers, trading partners, logistics providers, and the distribution channel.
Benefits of Using Internet Technologies in Supply Chain Management
  1. Share information about changes in customer demand. 
  2. Receive rapid notification of product design changes and adjustments. 
  3. Provide specifications and drawings more efficiently. 
  4. Increase the speed of processing transactions. 
  5. Reduce the cost of handling transactions. 
  6. Reduce errors in entering transaction data. 
  7. Share information about defect rates and types.

Labels:

Comments

Post a Comment

Popular Post

Competitive Advantage - Sustainable Competitive Advantage

Sustainable competitive advantage may be realised by adoption of e-commerce strategies and business models. Rather than simply exchanging procurement transactions as with e-commerce practices, leading enterprises are executing e- commerce to share intellectual capital with their trading partners working as a value chain that provides a competitive advantage for the development and distribution of their products. The idea of giving the customer access to tracking information via the internet was a new one that had considerable appeal to the customer. For example , the use of new system also had considerable advantage to FedEx who no longer had to deal with a vast number of calls checking up on progress of consignment; because the customer could now access the system themselves. But e-commerce development and implementation could not be entirely private- customer had to become involved at some stage. The competitor was quick to catch on to the idea and UPS (United Parsal Services) was so...
Post a Comment
Read more

E-Commerce Implementation

The strategy diagram divides implementation into the technical and the business aspects and these are briefly considered below: Technical Implementation : The approach to technical implementation of an E-Commerce system depends on the business objectives, business requirements and technologies that have been selected. It is noted that many internet E-Commerce systems are cobbled(repaired) together rather than designed and that is often apparent. It is important that the design process considers: Is of use of system by intended end-users : Always an important factor in system design but crucial if the end user are to be members of the public with perhaps limited computer literacy and the option to switch to an alternative website if not satisfied. Functionality that users need : This has to be what the users want rather than what the organisation things they need. Uses of e-commerce are not a captive audience that can be interviewed and evaluated like the uses of a traditional IS develo...
Post a Comment
Read more

Electronic commerce introduction

Electronic Commerce ( e-commerce ) generally refers to all forms of transactions relating to commercial activities, involving both organizations and individuals that are based upon the processing and transmission of digitised data, including text, sound and visual images. E-Commerce has created a new environment in business transactions using internet. It deals with providing information to consumers regarding products of their interest. It provides a platform of advertisement of products, allows negotiations, order for raw materials, settlement of financial transactions etc. Electronic commerce is an integrations of communication services, data management and security mechanisms that allows organizations to exchange information about the sale of goods and services, where, Communication services supports the transfer of information from the buyer to the seller electronically. Data management is the exchange and storing of data in a uniform format to facilitate easy exchange of infor...
Post a Comment
Read more