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Module 1 : E- Supply Chain management
1. INTRODUCTION
With the rise of the Internet and IT, the old ways of doing things have given way to electronic management and operation, opening up a plethora of strategic and tactical options. “This study delves deep into the origins of eSCM and the possibilities afforded by today's information technologies, resulting in a comprehensive comprehension of the concept. By analysing actual business examples of companies that have adopted e-SCM, this paper makes the most of the benefits and advantages to these companies in establishing a sustainable competitive advantage”. Undeniably, the Internet and other technological advancements have changed how people live and work, creating new doorways and chances for businesses to thrive. Supply chain management (SCM) has been expanded into new realms thanks to the development of the Internet and other information technologies. Poirier and Bauer have called this transition a "tsunami transformation" because the Internet is a powerful medium for integrating and synchronising all information and processes connected to the supply chain (SC) and its management. Management of the SC encompasses the entire network of businesses and individuals involved in creating and distributing a good or service, from the initial manufacturer to the final consumer. The SC as a whole, not just isolated parts, should be considered when formulating strategies, making decisions, or evaluating performance. There are new marketing challenges that arise from the integration of SCM and e-commerce. Real-time, online communication along the entire SC is now possible thanks to the widespread availability of the Internet and other telecommunications technology. For Poirier and Bauer (2000), "electronic SCM" is the "natural combining of supply chain and e-commerce." Network integration is at the heart of electronic supply chain management (e-SCM), a concept developed to meet the challenges of a rapidly evolving e-business landscape. The term "e-SCM" refers to an electronic SC management system that is organised and based on technologically facilitated connections.
1.1 Insight into the e-SCM Concept
e-SCM is an extension of the traditional SCM concept that arose in response to developing information technologies and redesigning business procedures within organisations to facilitate cooperation among business partners through the Internet. Having digitally enabled and coordinated business connections with customers, suppliers, and internal employees, as defined by Laudon and Laudon, makes these organisations digital. By capitalising on the synergies that emerge from the interdependence of the various parties involved, value can be added by deploying adaptive information systems and technologies. More information about e-SCM can be found in the following section, which provides definitions of the term.
- Definitions of e-SCM: The term "e-SCM" (or "electronic supply chain management") has many explanations, but it's essential first to understand the former "traditional SCM" term. “The term SCM refers to
systematic, strategic coordination of traditional business functions and tactics across these functions within a specific organisation and across businesses within the SC, with the ultimate goal of enhancing the long-term performance of both the individual organisation and the SC as a whole. One alternative definition of an SCM network is a group of related businesses that work together to bring finished goods and services to customers”. Figure 1. The Basic Supply Chain Figure 6.1 depicts the circulation of various commodities. As goods move from the supplier to the end customer, information must also drive back and forth between the multiple participants in the supply chain. This two-way flow of information is essential and should be mutual, regardless of the number of participants in the SC. Today, SCM has been transformed into eSCM due to Internet technology's impact on the industry. In 2000, a new era, the e-SCM, began with this transition. Figure 6.2 displays Ross's proposed phased development of e-SCM. Figure 2. Evolution of e-SCM Multiple definitions of e-SCM are presented in the research (e-SCM). According to Lankford, e-SCM is the optimal union of Internet technology and traditional SCM. According to Ross, "e-SCM is a network of independent partners who not only distribute certain products and services in the SC but also stimulate demand and lead the synchronisation of capabilities and resources in the entire supply chain to provide levels of operational efficiency and market leadership." Therefore, e-objective SCM is to coordinate efforts within and between businesses to maximise value for their clients. Coordination and information sharing among all stakeholders at all process stages are essential to realising the full potential of an integrated supply chain and gaining a strategic advantage. Components that influenced the adoption of e-SCM “The primary drivers for the switch from SCM to e-SCM are responses to business requests brought on by the organisations' new requirements”. In these:
- Additional cost savings and process enhancements are required, and they can be achieved by extending the reach of organisations' modern management tools from their suppliers to their customers.
Figure 6.6: (a) Traditional SC structure. (b) Networked SC structure. A defining characteristic of SCM made possible by e-business is its emphasis on the importance of networks. The focus is communication, teamwork, coordination, and open data. Partners in a networked supply chain can instantly share data, expertise, and other assets. Networked relationships replace linear transmission with end-to-end connections in the SC, allowing for the direct transfer of information from one SC partner to another without any loss of quality or delay. Figure 6.6 depicts two supply chain structures, one that is networked and one that is more traditional but simplified. “As a result of this networked information transfer, we can relay customer demand data to any link in SC without compromising its confidentiality”. Shorter lead times and leaner production aren't the only ways increased data sharing has impacted supply chain operations. Trust and dependence on one another are the cornerstones of any successful partnership. Management of SC in an Internet-enabled setting should adhere to the network-oriented organisation principle, which stipulates that participants should: share supply chain goals and function as an integrated system; cooperate based on cooperative norms and resolve conflicts; recognise and rely on resource interdependence, and recognise and rely on the interdependence of resources. In this section, we'll go over the fundamentals of managing the electronic supply chain.
- Adding values to e-SC To satisfy customers, those in charge of the manufacturing supply chain must emphasise improving the products they ship out. Connecting the company's supply and demand sides, value-added activities take raw materials and ideas and turn them into something more tangible.
Figure 6.7: Value-adding activities of an e-SC. Traditional SC priorities have included inbound and outbound logistics, production, sales, and after-sales support. The supporting activities provide the resources and framework for the primary activities. Information technology, finance, and human resource management are all under this category. “As part of an e-business strategy, SC has been modernised with value- adding capabilities and new business models, such as the ability to adapt quickly to the specific, real-time needs of end customers, virtual integration of production with retail store management systems, etc. That's why IT plays such a crucial role in modern SC”. The value- added processes of an e-SC are shown in Figure 6.7. Regarding networked e-SC, ICT, especially Internet technology, is integral to integrating information flows. Each link in the supply chain has instantaneous access to customer needs and data on all other links in the chain's operations. Because of this, the physical flow of goods is optimised, and coordination throughout the SC is streamlined.
- E-SCM focused on core competence Focusing on one's strengths is essential in today's competitive e-supply chain environment. To remain adaptable in market uncertainty, businesses should focus on their core competencies to generate the most value for the company and its supply chain. The broad availability of Internet connectivity may ease the execution of this plan by allowing partners to communicate and transact business online. This strategy is helpful for either the virtual enterprise model, which we'll address in the next section or solid long-term partnerships in the supply chain. The ability to outsource non-essential business functions benefits from a dynamic business formation or a flexible corporate structure. With the help of the web, a virtual business can be organised on the fly depending on partners who can be involved for as little as a single project or as long as an entire lifetime. When deciding on a company's structure and whether to produce goods inhouse or purchase them, the classic transaction cost theory suggests factoring in the expenses of managing external relationships and internal processes. Companies that manufacture goods today must be nimble to meet the market's demands. As Internet technology has progressed, the costs of managing relationships between organisations have decreased. Accordingly, focusing on core competencies is the way to go if you want to build an adaptable infrastructure and employ mass customisation strategies.
HTML and XML) and graphical user interfaces (GUI). Improvements in supply chain performance, as well as new business models and SCM technologies, have resulted from ICT innovations. In this section, we'll review the foundational information technologies and methods for applying these approaches to support e-SCM.
- Application scenarios of the Internet technology to SCM “e-business and virtual firms are innovative, collaborative business techniques enabled by Internet technology. They have significantly impacted SCM because of their improved communication capacity, agility, and dynamic and real-time information exchange. Many studies have been done on web-based apps for these administrative duties. With the help of Webbased apps, businesses that collaborate with a network of suppliers, vendors, and distributors may quickly and efficiently share data, engage in two-way interactions, and dynamically trigger collaborative business processes”. Groupware as integrated collaborative systems, a database management system (DBMS), a web server (WS), and related middleware are critical components of such applications. With Web-enabled legacy systems, businesses can better communicate with their SC partners and streamline operations by fusing the two sets of procedures. Internet-based tools can be broken down into four categories when discussing SCM. Various Internet application use cases centre on multiple facets of electronic supply chain management. ▪ Information publishing Publishing information is a core feature of many e-business software programmes. Information is disseminated in a single direction through the internet for supply chain management purposes, with no room for two-way communication or interaction. The primary goals of applications in this category are partner engagement (i.e., increasing transparency in operational processes) and customer acquisition (i.e., advertising the company's offerings). The information is available instantly to both customers and supply chain partners. The services provided by Circuit World Online are a comprehensive online resource for the electronics industry. Through this platform, producers of electronic goods can have their wares officially announced and registered. If you're in the market for electronic circuit products, this online service can help you track down your favourites from various reliable sources. These programmes facilitate direct marketing communications between manufacturers and their customers. ▪ Interaction support The majority of today's popular web-based programmes provide functionality beyond simple document publication. They usually serve as a platform for people to engage in group discussions and share their insights. In this case, the primary goal of the Web-based applications involved is to provide Web services to users in response to those users' requests while also facilitating communication between supply chain partners. Thus, information delivered to users over the Internet is alive, tailored to their needs, and can be interacted with. “This type of two-way communication was developed for sharing and receiving information, negotiating business proposals, making decisions, keeping tabs on operational processes, and so on”.
Tools such as electronic mail, groupware, video conferencing, online industrial communities, information exchange forums, remote process control and monitoring systems, and many others fall into this category. Using these programmes, consumers can request assistance from businesses online. The registered communities in the SC can help partners exchange information and expertise and provide them with the needed services. ▪ Online transaction In this case, online tools are used to carry out those above interactive monetary exchanges. The applications share data and merge it with financial flows and orders to the physical supply networks. The supply chain transactions implemented as a result of these interactive online processes will be the result of this. The e-commerce platform utilised by Dell Computer Corporation is an excellent example of such a programme. Dell's website features tools for taking custom orders and arranging production runs. The online platform allows buyers to enter their requirements and finalise their purchases. Orders are sent to the most suitable plants in their respective regions for production, and the system then ships out the final products to the customers.
- Information systems for e-SCM The job entails managing the flow of materials from their originators to those who will use the finished product. Supply chain information systems regulate the data streams. “Intranets, extranets, Web services, Web portals, agentbased business automation technologies, wireless networks, and so on are all examples of Internet and information technology that may be integrated with information systems supporting supply chain operations in an e-supply chain”. ▪ Development history of SC information systems Figure 8: Development history of SC planning information systems.
4 Supply Chain Synchronization : Timing is Everything !!!
- Securing access to the most value-added suppliers, on a global basis, by establishing superior Internet-enabled supply chains that offer business to-business technology and trading partner relationships.
- Engineering fexible, agile organizations and supply networks that can leverage an array of Internet technologies, ranging from collaborative product commerce to multi- channel e-information visibility to capitalize on changes to customer demand and shifts in supply-side dynamics. Figure 8: e-Supply chain channels.
5 AVENUES OF e-SCS
E-supply chain avenues encompass various digital technologies used to manage the flow of goods and information throughout a supply chain, including online procurement, real- time inventory tracking, automated order processing, collaborative platforms, and advanced analytics, allowing for greater efficiency and visibility across the entire supply chain process; key areas include: e-procurement, warehouse management systems (WMS), transportation management systems (TMS), demand forecasting tools, supplier portals, customer relationship management (CRM), and IoT integration; major players in this space include e-commerce giants like Amazon and digital platforms like SAP and Oracle. Key avenues within e-supply chain:
E-procurement: Online platforms for sourcing and purchasing goods and services from suppliers, enabling streamlined vendor management and competitive pricing. Warehouse Management Systems (WMS): Software that automates inventory tracking, picking, packing, and shipping processes within warehouses, optimizing storage and fulfillment. Transportation Management Systems (TMS): Software to manage transportation logistics, including route planning, carrier selection, and shipment tracking, ensuring efficient delivery. Demand Forecasting Tools: Utilizing data analytics to predict future product demand, helping businesses optimize inventory levels and prevent stockouts. Supplier Portals: Online platforms where suppliers can access information regarding purchase orders, inventory levels, and delivery schedules, promoting collaboration. Customer Relationship Management (CRM): Systems that manage customer interactions and orders, allowing for real-time visibility into customer demand and order status. Internet of Things (IoT): Integrating sensors and devices across the supply chain to capture real-time data on product location, condition, and environmental factors. Benefits of e-supply chain: Increased efficiency: Streamlining processes and reducing manual tasks, leading to faster order fulfillment and reduced costs. Improved visibility: Real-time data access across the supply chain, enabling better decision-making and proactive issue resolution. Enhanced collaboration: Facilitating seamless communication and information sharing between suppliers, manufacturers, distributors, and customers.
6 E-Commerce Principles
Getting buyers to visit, buy and keep buying is the essence of marketing for websites selling things online. When people share your content with their friends, your campaigns gain far more reach at no additional cost. Selling online requires a specialised marketing mix – but the same principles can be applied to almost any website. This topic reveals the key factors in marketing for e-commerce stores – and the relationships between them. The most important elements are nearer the top.
User Experience If people can’t place an order then your online business will fail. If people hate using your website then they won’t come back and they certainly won’t recommend it to their friends. To make the user experience smoother, you can create a QR code free to provide quick access to your website or specific product pages, making it more convenient for customers to engage with your business. Content Without good content users will be unable to make the decision to buy. Content sells your business and your products. The best forms of online content are copy, images and video. (Images are more engaging than copy and video is the most engaging form of content). Search Search campaigns include SEO, PPC and re-marketing. Without good, unique and informative content, customers are unlikely to find your website using search engines. (SEO) is the most targeted and powerful way to drive online sales. PPC is another powerful search channel that requires keyword-rich copy in order to be cost-effective. Social media campaigns rely heavily on good content too. That content is most effective when it exists on your website to support your campaigns to drive people to the website. PR and publicity should create content elsewhere and if your strategy is properly integrated then that will support your SEO and social media campaigns. Social media platforms like Pinterest and Instagram can also be particularly effective for sellers focused on earning on Etsy, helping to showcase products and connect with niche audiences.
7 Understanding the Internet Business Environment
Can Smart Supply Chain Management be the secret to lasting success? Let's break it down! Supply Chain Management (SCM) is the system or process of how the goods are procured, managed and overseeing the flow from the initial stage to the end result of the same. It includes the entire network of designing, planning, executing and control of the flow from start to finish. Main IT components involved in supply chain management are: Planning: Creating the strategies for managing the resources that go towards meeting customer demand for goods (products or services). Sourcing: Selecting the right suppliers that help in the procurement of the goods and services needed to create the final product. Manufacturing: Integrating the entire process of transformation of the raw goods into the final or the finished goods.
Logistics: Managing the storage and transportation of the raw and finished goods so that the customer delivery is met on time. Returns Management: Managing the returns or the reverse flow of providing goods and services. Consider an online retailer specializing in fragrant candles. The initial step involves planning the sourcing and production process, which includes procuring essential materials like wax, wicks, and glass containers from suppliers. Once these are obtained, the finished candls are produced and orders are processed. The logistics aspect focuses on coordinating with carrier partners to deliver these orders from the warehouse directly to customers’ doorsteps. Additionally, there must be a system for handling returns, ensuring that any return requests are managed efficiently. This example has all aspects of the supply chain management mentioned above. Supply Chain Management (SCM) is crucial in modern business, driving efficiency, profitability, and customer satisfaction by streamlining procurement, inventory, and logistics. Effective SCM optimizes resources, reduces costs, and enhances customer experiences through timely delivery and product availability. It also builds resilience by enabling companies to anticipate and mitigate risks, adjust to market trends, and respond quickly to demand changes. Sustainability is increasingly integrated into SCM, minimizing environmental impact and enhancing corporate responsibility. Advanced technologies like IoT and AI improve visibility, forecasting, and decision-making, giving businesses the agility to remain competitive and responsive in a dynamic market landscape.
8 E-Supply Chain Business Trends
Supply chains are being exposed to increased uncertainty, variability and risk. High- performing supply chain organizations are leveraging data to reengineer their decisions and make them more continuous and contextual to the overall supply chain goals. Making this shift requires access to more data, with increased frequency. SCP technology leaders need to consider more than just their own internal datasets (first-party data). They should also consider which additional second- and third-party data signals can provide a more realistic view of actual, historic and marginal supply chain performance, driving improved decision quality. (See Note 1 for a definition of first-, second- and third-party data.) To that extent, effective leveraging of second- and third-party data will depend on the availability of high-quality, real-time, first-party data, including the internal system data required to drive foundational sales and operations planning (S&OP) technology enablement (see Validate Your Data Estate to Ensure Supply Chain Planning Transformation Success). However, as organizations strive to achieve digital supply chain planning, including clear technological support for collaboration with both suppliers and customers, greater representation of external market and environmental factors become critical. The objective is better decision making, leveraging context to align decisions across solutions and time horizons, thereby increasing overall supply chain performance from planning. Decision alignment is also one of the top objectives of supply chain leaders, according to the abovementioned Gartner survey.
By leveraging external data, SCP leaders can enable extended planning capabilities, including:
- Supply network visibility
- Risk identification
- Improved demand planning via demand sensing
- Enhanced supply optimization leveraging AI/ML These activities all help to build toward the larger goal of establishing a digital twin of the supply chain. This research helps SCP leaders learn how to discover, prioritize and manage external data sources for enhanced planning performance. Analytics in the supply chain are becoming increasingly important for improving decision quality and accuracy in planning. Figure 2 below shows the relative level of adoption of analytics across supply chain planning.
