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Supply Chain Management

Essay by   •  February 1, 2012  •  Research Paper  •  687 Words (3 Pages)  •  1,117 Views

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Supply Chain Management involves a firm's suppliers and customers, as well as the processes used to transfer a product or service from an order in inventory to delivery. An E-SCM must also integrate technology, especially the internet, in an effort to speed communication and information flow throughout the supply chain.

Supply chains have advanced in the last two decades with improved efficiency, agility and accuracy. The recent advancement of Internet technology has brought more powerful support to improving supply chain performance. In this context, e-supply chain management becomes a new term that distinguishes itself by net-centric and real-time features from traditional supply chain management.

E-Supply Chain Management System (E-SCMS), a global, web-based, end-to-end solution for seamlessly integrating and managing the entire range of a company's supply chain functions

Benefits of E-SCM

1. There are many benefits associated with E-SCM, most centering on the speed and ability to communicate, the decreased costs of communication and carrying inventory, and customer service.

2. Speed and ability to communicate can be seen throughout the supply chain. Firms keep track of their existing and needed inventory levels. E-SCM allows the supply chain partners to communicate those levels in real-time to increase their service levels.

3. A large benefit of E-SCM is the long-term relationships that are built along the supply chain. As firms open themselves, and their information, up to each other they are forced to align their own strategies and goals. By doing so, supply chains become committed to the end consumer. This long-term relationship also moves to stabilize processes, as firms can focus on their own individual core competencies, while outsourcing their remaining needs.

4. E-SCM decreases costs as well. By sharing information throughout the supply chain, a pull-based demand inventory system is created. Simply put, a customer places an order, which pulls the demand throughout the supply chain. Reduced inventory calls for lower warehousing and facility costs. The system also creates electronic triggers in the supply chain workflow, creating more reliable and efficient operations

5. E-SCM also improves customer relationships by assisting the ability to anticipate, track, and respond to customer demand and reactions. E-SCM eliminates stock outs, encourages customer driven demand, and efficiency and tracking of delivery. By being better able to serve customers, E-SCM has become an increasingly important way to retain sales

6. E-SCM is also an attempt by companies to increase the efficiency of their supplier relations. With an emphasis on automated communication, E-SCM limits the amount of paperwork, filing, and record keeping needed. The system also allows for firms to implement JIT or similar

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