Supply chain is the process under which products are created and deliver to customers. it refers to complex network of relationship that organization maintains with its trading partners to source manufacture and deliver products. E-SCM refers in particulars in management of supply chain using internet technologies-SCM facilitate the removal of purchase orders, deliver confirmation bills of material and invoice. The switch over/switch away from paper can also speed up the response and improve communication with those who are there in different time zone or who work outside the normal office hours-such as night shift supervisor. Traditional SCM Cycle Process
THE following processes were not integrated in traditional SCM system. They are
1 procurement planning
2 production planning
3 demand planning
4 inbound logistics
5 customer service
6 distribution channel
The way of SCM i.e; E-SCM changes the old way of SCM and integrate all above processes.
E-SCM permits /allows improvement in procurement and fulfillment particularly in terms of stock availability and on time delivery. Visibility throughout entire SCM must be transparent to achieve full customer satisfaction. Because of E-SCM, customer has complete real time consignment status information over the web.(order tracking system).while suppliers and delivery companies can save time previously devoted to answering queries on order status. This is an essential difference between the old economy logistics and new economy logistics. In e-scm.at the warehouse and distribution level facilities must provide inventory control at individual shipment level as well as item level. Distribution and warehouse centers must have the flexibility to meet diverse requirement of customers .Thus, inventory visibility and information transparency in E-SCM are the keys to success.
It also improves the delivery of goods and services at reduce cost through development of method for SCM including advances in data management and by increasing sophisticated planning and execution system. Information technology overcomes the administration problems associated with large number of individuals orders on just in time basis. Real value emerges with the combination of e-logistics system with other information based technology. Processes such as ERP, MIS (MANAGEMENT INFORMATION SYSTEM) AND CIS (CUSTOMER INFORMATION SYSTEM) ARE integrated with company’s MIS .Through its e-logistics software and this data facilitates the analysis of buying selling pattern to serve customers in a better way at lowest cost. So the objective of right product at the right place at the right time and lowest possible cost is accommodated to great extent.
E-SCM ENABLED SYSTEM
How internet, extranet and intranet is applied in e-supply chain.
Intranet-it refers to network within the organization.
Extranet-it refers to network between the organization and the outsiders.
Internet- it refers to network open to general public.
The term e-Procurement is used for referring the procurement processes using internet technology. E-Procurement Helps to reduce the transactional costs, achieving faster & automated transactions, helps the buyer to focus more on Strategic part of procurement. Here extranet is used.
E-Procurement or electronic procurement is an automated, Internet-based way for a company to purchase the goods and services it needs to conduct business. Such procurement goods and services may include product components, standard raw materials, special customized supplies, or MRO supplies, which are supplies a company needs for maintenance or repair purposes, or general operation The buying process usually starts with selecting your supplier for particular products. With E-Procurement, you could work from consolidated online catalogues, featuring products from multiple, preferred suppliers.
You are able to search for the best supplier globally, to access the same catalogue from every business location, or to consult complex contract documentation electronically. Internal approval steps, for instance for purchase order requests, can be automated and linked to the selected products.Subsequent buying transactions, such as purchase order processing and submission to the Supplier can then be completed over the Web. The further follow-up and tracking of the orders, including the fulfillment, delivery, receipt and Payment, can all happen through Web applications, providing you with improved and real-time Control of your order status, at any time. These applications usually require one or more servers, either within your company network, or outside of it, for instance for access from your suppliers.
Enterprise resource planning
After procurement via extranet, production planning is done through enterprise resource planning. Enterprise resource planning (ERP) systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application. The purpose of ERP is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. ERP systems can run on a variety of computer hardware and network configurations, typically employing a database as a repository for information.
ELECTRONIC SUPPLY OF CHAIN MANAGEMENT:Benefits : 1. It is web base and not web enable. 2. It has interface capability with any third party software. 3. It is platform independent which means, it can be used with any operating system. 4. 24*7 facility available. 5. It’s support real time info exchange, that is to the right person at right time. 6. It in-corporate broadcasting and active messaging to proactively notified to an individual of specific condition that require attention customize service.E-Supply Chain Components: 1. Advance scheduling and manufacturing planning program :This automatic programme provides detail coordination of all manufacturing and supply efforts based on an individual customer order. Scheduling based on real time analysis of changing constant or condition throughout the process. 2. Demand forecasting programme :It supposes a range of statistical tools and business forecasting technique. It constantly takes into all changing market Scenario and economic factors while making decision.
3. Transportation Logistics program :It facilitates research allocation and execution of the process to ensure that materials and finished goods are delivered at the right time and to the right person. 4. Distribution planning program :This is integrated with demand forecasting, manufacturing schedule and transportation logistics to reach the customers. 5. Order commitment :This is to link to all other modules so that accurate delivery of goods and services can be guaranteed.Design/methodology/approach – This paper draws from the international management, supply-chain management, and organizational behaviour literature to construct a framework and formulate propositions linking important organizational factors to supply-chain effectiveness in developing countries. Findings – The paper reviews the literature, develops a useful framework, formulates propositions, and provides important managerial insights for supply-chain management in developing countries. Research limitations/implications – Supply-chain effectiveness is a broad construct in this paper.
Future research might want to isolate and examine the potential effects of organizational variables on more narrow supply-chain outcomes. Practical implications – The modeled framework can help managers of Multinational Corporations (MNCs) better understand and manage important organizational variables in ways that render their supply chains in developing countries more effective. Originality/value – Currently, the literature does not provide managers of MNCs and researchers a framework for investigating and effectively managing key organizational factors affecting supply-chain networks in lieu of conditions prevalent in developing countries. This paper attempts to fill this gap. Propositions developed in this paper can serve as a foundation for future empirical research needed to support the development of theory in this area.Some other Factors that affect supply chain management are: 1. Consumer expectation and competition 2. Information technology 3. Infrastructure issues 4. Product proliferation 5. Globalization 6. Government regulation 7. The environment 8. Exchange rates
Ways to improve inventory management through Electronic supply chain management: Introduction:- Information technology can be an effective way to make your company more productive and profitable — especially if you’re competing with low-wage countries like China and India. Whether it’s integrating your processes, enhancing your marketing abilities with a customer database, better managing receivables or improving supply chain management, the right technology can dramatically improve how you run your business. Although it sometimes requires a significant investment, the long-term advantages usually far outweigh the initial costs. Some typical applications
The best way to improve your business performance is to examine internal processes that are managed separately and find a way of bringing them together into a single management system. Internal processes that can often be blended in this way include payroll, accounting, customer relationships, inventory control, production control and communications with employees and clients. When you make your decision about your software application, you need to consider your expected growth, the viability of the vendor, the stability and functionality of the product and the availability of third-party add-on solutions. Other key considerations include the total cost of ownership and the potential return on such an investment.
Electronic Supply chain management:-
The supply chain refers to all of the steps involved in getting a product or service to your customer. Apart from making sure that your own company is operating efficiently, you also have to ensure that your entire supply chain, including outside suppliers, is also performing optimally. Supply chain software helps you automate your processes and track information about orders and deliveries. This helps you forecast supply and demand more accurately and ensure that your inventory can cover client orders. Other benefits include reducing errors by automating transactions, speeding up deliveries to customers and tracking their orders, reducing warehouse space requirements through improved inventory control and decreasing administrative costs by introducing automated systems.
Need for electronic supply chain management in inventory management: Supply chain partners are also frequently engaged in technology co-development and new product development activities. In this context, integration of supplier reliability, maintainability, and supportability capabilities into the new product development process becomes a key enabler and should occur in the earliest phases of the product development program.
Key suppliers should be members of the cross-functional product development team in order to best leverage their organizations capabilities to reduce costs and cycle times. In most cases these key suppliers can contribute effective ideas and capabilities for reducing materials costs, design fabrication costs, logistics costs, and manufacturing cycle times.
Factors included in inventory management and how electronic supply chain management helps:
Collaborative Product Life Cycle Management
Objective is to share relevant information with appropriate partners and enlist their expertise in design activities at the earliest possible time in Product Life Cycle Management (PLM). Emphasis is to acquire and apply the skills, knowledge, and experience of your extended enterprise to develop the products that best serve customer needs at low cost in a short cycle time. Demand Planning
Objective is to provide the entire extended supply chain network with the demand planning information needed for optimum planning and schedule execution. Emphasis is on accurate and real time, collaborative demand planning to support production and supply chain execution. Supply Source Planning
Objective is to optimize projected customer demand with supply source planning through Collaborative Planning, Forecasting and Replenishment (CPFR) and subsequent schedule execution by supplier partners. Emphasis is on compatibility of collaborative business process and precise and timely communications to minimize non-performance risk.
Objective is to make reliable, short-cycle, capable-to-promise schedules and achieve100% schedule performance. Emphasis is on schedule reliability and responsiveness to planned demand and unforeseen changes in demand. Event Management
Objective is to proactively monitor and trigger signals about undesirable events requiring action somewhere in the supply chain. In addition, logic may exist that will identify opportunities to minimize costs and increase customer service. Emphasis is on preventing internal and external problems that are likely to interrupt material flow by sending alert messages to the first level and escalating the alert signal up the organization until the alert is shut down. Throughout the supply chain, there are some absolutely critical and predictive event questions your system should accurately and quickly answer: * When will specific orders really ship?
* Which orders will be late?
* Why will these orders be late?
* What are the specific problems that are delaying the schedule?
* What are the future schedule problems and when will they occur?
* What is the best schedule that can be executed now?
If management can accurately answer predictive questions, decision quality will greatly improve. Preventive actions can offset what were once unforeseen events. The supply chain will be managed more effectively and improve your chances of gaining a competitive advantage.
The concept of high-performance supply chains as a competitive weapon is coming and in fact has already arrived in some industries, such as the automotive industry and the personal computer industry. Without doubt, successful organizations of the future will be operating in an environment of well-integrated supply networks communicating over web-based information systems on a real-time basis. Such organizations will enjoy significant operating cost advantages, reduced cycle times, and improved production flexibility. Many of these supply chain networks can be expected to be global in nature.
The biggest obstacles to achieving optimized supply chain management solutions will likely be overcoming traditional mindsets concerning buyer/supplier relationships and cost-effectively establishing the required information systems networks between different organizations in the chain. Those companies and organizations that succeed in achieving this level of supply chain integration will be richly rewarded. Those that do not will get the crumbs.