Supply Chain Management - Case Study Example

Supply chain management Table of Contents Table of Contents 2 2 Executive Summery 3 Introduction 3 Supply chain management (SCM) and new technology3 ESCM 5 Main Benefits of ESCM 6 A B2B SCM system for clothing industry 7 Product information management 8 Sales order management 9 Forecast of demand and inventory management 9 Purchasing management 10 Delivery management 11 Impact of ESCM on a supply chain 11 Limitations of ESCM 11 Conclusion 12 References 12 Executive Summery This report will present the detailed overview of the development of the electronic supply chain management. Here the main aim of the report is to present the main advantages of the electronic supply chain management based business. This report will discuss the main advantages and potential benefits of the electronic supply chain management supported E-commerce. This modern age of technology has brought numerous benefits and new areas of the business management and handling. Through this technology implementation (ESCM) we will be able to target and cover a huge market area for the better customer care, their satisfaction, easiness, and gaining a competitive edge. Introduction This report discusses the electronic supply chain management. This research is initiated after the decision of the ABC manufacturers, which supplies supermarkets all over the country. The company is going to start the electronic supply chain management system to meet the upcoming market challenges. This research will describe the importance of the electronic supply chain management system for a company and its potential advantages for the better corporate management and online business. The main aim of this report is to access the main advantages of the electronic supply chain management system and streamline the main areas of implementation of this technology. Supply chain management (SCM) and new technology According to (Kenneth 1999, p.55), “Supply chain management incorporates the supplier, distributor, and customer logistics requirements into a single consistent practice”. The supply chain is a group of corporal attributes for instance industrialized plants, giving out centers, conveniences, retail outlets, staff and information, which are connected from side to side activities such as procurement or logistics, to deliver goods or services from starting place through utilization. Goods or services begin as unprocessed materials and progress through the company’s logistics and manufacture system in anticipation of they arrive at customers. To deal with the supply chain, an organization attempts to get rid of impediments and engrave the amount of resources engaged along the way. This can be carried out by streamlining the organizations inside operations or by plummeting inventory costs by getting information from the suppliers to put of release of goods and their payments until the instant they are required. Information Technology makes well-organized supply chain management promising by incorporating demand planning, predicting, materials demand, and order handing out, inventory allotment, order accomplishment, shipping services, in receipt of, proofs of purchase, and payment. Enterprise resource planning systems, which are based on internal business activities, can be comprehensive outer the organization to enlarge organization which supply chain partners. Supply chain management systems can not only help out in decreasing the inventory costs, on the other hand, they can also distribute the products or services more speedily to the consumers. Supply chain management can also be utilized to generate competent customer reaction systems that act in response to customer demands more competently. The expediency and ease of using these information systems elevate switching costs (the expenditure of moving from one product to opposing product) which puts off customers from going to competitors. By charging less costs and shelves well stocked, Wal-Mart has turned out to be the most important retail business in the USA. Wal-Mart’s unremitting replacement is an instance of competent supply chain management (Kenneth 1999, p.55). SCM are business management practices to raise the company productivities and inner outlay as well as, has developed a technique of eCommerce expertise. Supply chain management is a significant deliberate effectiveness proficient of fundamentally civilizing client worth schemes through the re-engineering of Internet facilitated and intranet shared control business (Anderson et al, 2000). Most modern growths in IT areas have derived the ESCM or the electronic Chain Management thought to latest extent. In the earlier periods, neither marketplace nor goods altered much ultimately, venture that increased most important advantage could control on, substantial capitals as well as process information, grown-up sharing conduits, publicity as well as promotion power, plus the most recent knowledge, to uphold that lead. At the present time, it is understandable that there is no comparable item as appropriate market competitive benefit in addition to in addition that every reward is conditional. The motive for the fast speeding up in the decomposition of business competitive benefit in approximately every company would be traced back to the immensely rising most up-to-date IT and IS based computer technologies. Yet supplementary tedious is the unexpected enlargement of latest commerce models that have been rapid in demanding the at hand influential from end to end increasing exacting competencies that authorizes them to take up the marketplace and triumph over the potential client sections in a better way (Anderson et al, 2000). ESCM In the last few years Ecommerce and Internet have turned out to be an indispensable component of company activities of the majority businesses. ESCM would be able to build up the equipped competence of the company through restructuring procedures among the organizations as well as its dealers, organization associates, in addition to clienteles. With the help of this new technology such as Client/Server computing, Data Mining, Web supported Applications, X.12 EDI, Internet as well as XML have the opportunity to put together our company extra well-organized plus considerably minimize our expenses, if we are looking to obtain benefits of them (Anderson et al, 2000). Procedures like that the ESCM and EDE (Electronic Document Exchange) are efficient and imperative to the tremendously continued existence of our organization. By new technologies implementation in the area of the SCM we can get lots of choices like that EDIFACT, ANX plus AISI EDI, in addition to actions through the machine manufacturing and management forced safety exposure necessities carry on to reason technology move for our company (Anderson et al, 2000). Main Benefits of ESCM Here I have accessed few benefits of the ESCM: (Anderson et al, 2000) Diminish risk Reduce contract cycle time The organization rapidly recognizes the favored suppliers and linked main terms Organizational Contract visibility allows fulfillment to terms Condensed overpayments of deal Procedures and terms Easy Documentation and reporting of all tasks Understanding of suitable refunds plus discounts Decrease in last minute revises or stages with no agreement protection Evergreen contracts Get rid of auto-renewal term Score contracting cycles in half Regulate processes Clients Compliance management Minimized service costs Revenues A B2B SCM system for clothing industry ESCM has provided a number of manufacturers in world to have lead in incorporating their main suppliers, buyers as well as sustaining affiliates in the export supply chain, in addition to relating information technology to permit them to endeavor openly as a built-in body. Purposely, by means of the reception of the e-mail, Web plus EDI (Electronic data interchange) the companies are able to commune as well as way the commerce by means of their upstream as well as downstream associates repeatedly. Developments would be achieved in the organization of goods processing of sales, information, demand forecast, plus acquisitions orders as well as record organization, and delivery of products (Cooper et al 1997). Every of these hard work are conventional to diminish, put together, and pace up the commerce procedures from manufacturing to release. These developments in sequence give support to the manufacturers to react to purchaser’ necessities quickly, and get better value-adding services to clientele (Anderson et al, 2000). Product information management Standing-in on highly developed manufactured goods information (e.g. fabric pattern, design, size, etc.) is noteworthy for the businesses to unconditional cost judgment, bills of material, take out as well as analysis, substance basis, pre-production models in a small amount of time. By means of the training of the Internet based goods supplies as well as specifications can be disseminated from the purchaser to producers in an instantaneous way. Replacement of information can be additionally accelerated when together purchasers and organizations make use of the comparable goods information administration system. Competence is supplementary for the reason that the condition for surplus admission of corresponding information all the way through users of divergent organizations is unconcerned. Employees of the organization’s sales offices will have the right to use the goods information by means of LAN (local area network), while their out of the country manufacturing plants will be able to recover the information slightly in the course of internet and email. In the course of frequent goods information system, the organization will be able to as well recover the product specifications and costing information merely and promptly for grounding of repeating orders. In this method, the pre-production practice would be solid (Newing, 2000). Sales order management Through the ESCM the overseas buyers more and more give orders by means of EDI (Electronic data interchange) making used of value added network (like VAN), the organizations have to bring to the execution systems of divergent clienteles in growing their domestic EDI arrangements. This is for the reason that unrelated values have been taken on: clientele in the United States will be inclined to make use of ANSI ASC X.12, and individuals in Europe make a decision for UN/EDIFACT. To put in to the difficulty, every client has an exacting grouping of EDI communication casing deal, move, and finance (Anderson et al, 2000). Forecast of demand and inventory management A number of producers have worked simultaneously by means of their main purchasers in laying down forecasting. In all-purpose, purchasers usually highlight on deals forecasts, expecting customers’ reaction to new-fangled business trends and adamant for novel manufactured goods appearance and support, while organizations draw attention to the order forecasts, aspiring at the accomplishment of well-organized refill and best use of manufacture ability. If these forecasts are made in separation, which is usual, it could be tough to get hold of alike forecasts of insist. Consequently, stock-out as well as overstock would consequence (Cooper et al 1997). In this way a number of the producers plus purchasers have acted in performance to undertake a superior corresponding have bring and claim. Having instantaneous admission to the client’s point of deals data in addition to supply level throughout EDI (Electronic data interchange) plus the extranet, the producers are competent to build up an additional reasonable estimate. Difference among deals and order forecasts will be acknowledged and acquiescent. Manufacture and release of goods will be scheduled and accomplished according to the determined estimate (Cooper et al 1997). Additional to that, numerous producers have urbanized and carried out a seller directed supply system by means of their main buyers. Beneath this configuration, the manufacturer is entirely responsible for the documentation in the purchasers’ system of trade stores. The producers do not stock up stocks in the purchasers’ warehouses, which in point of fact have been condensed. To some extent, they estimate store-level insist per stock custody component, plus refill stocks in every store (Anderson et al, 2000). Purchasing management Through ESCM, producers are able to build up EDI connections by means of their main suppliers to put orders. At present, a number of producers are increasing ESCM Web-based applications to produce straightforward buying management. During their extranets, the producers are able to place acquiring orders, take delivery of order justification, and go behind manufacture and discharge position of instructions. Dealer does not necessitate constructing a complex information arrangement to smooth the progress of commerce by means of the manufacturer. They merely have need of connecting the Internet to input necessary data, as well as entirety electronic transactions by means of a Web browser. This practice is effectual in the administration of a massive amount of dealers whose IT abilities differ significantly (Cooper et al 1997). Delivery management A lot of manufacturers make use of EDI (Electronic data interchange) to put forward operational documents as well as import and export agreements, certificates of origin, production notices as well as restrained export licenses (or we can say the Quota Licenses) to a variety of administration departments. Here I want to give an example of the Hong Kong Tradelink Electronic Commerce Ltd. This company (Tradelink), that is a collective business enterprise recognized through the Hong Kong SAR administration plus 12 private associations, gives a variety of Government-to-Business EDI support and services. 1 Impact of ESCM on a supply chain As a number of manufacturers have to be found well-built stress on strapping up IT for never-ending development as well as value formation, it is not surprising to determine that they are the originator of behavior online commerce in the world industry. While subsequent B2C (business-to-consumer) ESCM permits producers to go around buyers plus put up for sale their goods unswervingly to customers, a lot of them have determined to spotlight on via B2B ESCM to make easy SCM. The subsequent case helps out to make obvious the causes at the back this alternative (Newing, 2000). Limitations of ESCM As it is earlier that ESCM is really effective or the organizational supply chain management. But at the same time we are surrounded by limitations of the Internet based technology. For instance the main problem this technology is now the online fraud and information hacking. The problems regarding the online deals management and handling are becoming a complex challenge. The processing of the online transaction requires the online money transfer; in this scenario there is threat of the online fraud. There are also threats of the online organizational information hacking and theft. That can be a problem for the organizational information system. We are also facing a more competitive edge on the online business, for this we need continuous up-gradation and enhancements in our organizational structure. For the purpose we need to send lot time and resources for the online bossiness management and handling. Conclusion In this paper I have tried to present the detailed analysis of the electronic supply chain management. I have tried to demonstrate the main areas of the potential enhancements and up-gradation. These new enhancements will make the company to have a better working and dealing structure. This research has described the importance of the electronic supply chain management system for a company and its potential advantages for the better corporate management and online business. References 1. Anderson, D.L., Lee, H. 2000. New supply chain business models – the opportunities and challenges, available at: http://anderson.ascet.com, 2. Cooper, M., Lambert, D.M., Pagh, J. 1997. Supply chain management: more than a new name for logistics", International Journal of Logistics Management, Vol. 8 No.1, pp.1-14. 3. Kenneth. C. Laudon. 1999. Management Information Systems, (Fifth Edition), New Jersey, Prentice-Hall. 4. Newing, R. 2000. Internet rain puts a bloom on the business-to-business marketplace, Financial Times. 5. Maxwell Clements, 2008. Software adds artificial intelligence to e-commerce, source; http://news.thomasnet.com/index.html, retrieved on 04-04-2009. 6. Paul Kwok. 2000. Artificial intelligence for E-commerce, Source; http://www.ouhk.edu.hk/, retrieved on 04-04-2009. 7. Web Security Issues, http://www.netinvent.com.au/index.php, retrieved on 04-04-2009. 8. On agent-mediated electronic commerce, source; http://eprints.ecs.soton.ac.uk/8565/, retrieved on 04-04-2009. Read More