Saturday, 15 December 2018

What are the Basics of eCommerce Supply Chain Management?

     The supply chain is the process of making and delivering the products to the customer. In the technical perspective, the supply chain can be understood as a system of organizations, people, activities, information and various resources involved moving a product or service from supplier to customer. The supply chain activities involve the transformation of natural resources, raw materials, and controllers into the finished product delivered to the end user.
      The supply chain is the heart of company operations. In order to make the best decision, managers need access to real-time data through the new technologies that have the potential to take over supply chain management entirely disrupting traditional ways of working. With a digital foundation in place, companies can capture, analyze and interpret high-quality real-time data. The data fuels the process automation, predictive analytics, AI and the technology will take over the supply chain management.
        Leading companies have used robotics, AI to digitize and automate labor-intensive, repetitive tasks and processes such as purchasing, invoicing, account payable and parts of customer service. Predictive analytics helps the companies to improve demand forecasting so that to reduce the volatility, increase asset utilization, and provide customer convenience at optimized cost. Sensor data helps the manufactures to better estimate when the machines break down so that they can minimize the downtime. Block-chains helps to transfer the title, record permissions, and activity logs so as to track the flow of goods and services between businesses across borders. Robots are improving productivity and margins in retail warehouses and fulfillment centers.

Linking & Applications are facilitating the Block Chain: The technologies by which the physical goods and materials are identified and linked with their digital representation on the blockchain( e.g barcodes, serial numbers, digital tags like RFID and NFC, genetic tags)  in uniquely identifying a physical good with its digital counterpart.
    By design, every transaction in a supply chain is fully auditable. Smartphone applications can aggregate and display information to customers in a real-time manner. Also, the strong integrity properties of the blockchain are genuinely trusted. A thoughtful user interface can empower better purchases and giving the user a true choice that they can exercise.
       Let's take an example and analyze for the supply chain perspective. In order to prepare a cup of tea, you need
the following ingredients like water, milk, sugar, tea leaves, and Ginger. The journey of the supply chain starts with purchasing the ingredients or raw materials and this process of purchasing are called Procurement. The next stage of supply chain management is called manufacturing and operations. In this part, you are moving all the ingredients to make a cup of tea. It includes boiling the water to constrain in the cup or container. This process of making a cup of tea can be described as a company. The 3rd stage of supply chain management is logistics and transportation. Suppose, you want to carry your homemade tea to your office with proper packaging is the transportation stage. Every product has the supply chain process cycle and the supply chain manager is responsible for successfully managing that cycle.

Supply Chain Professionals: When planning, purchasing, manufacturing, order fulfillment, and logistics are largely automated, the supply chain executive will need to shift their focus from managing people doing repetitive and transactional tasks to designing and managing information and material flows with a limited set of specialized workers. The supply chain analyst who can analyze the data, structure and validate data sets and forecast effectively will be high in demand. So a handful of specialists will be needed to design a technology-driven supply chain engine that seamlessly supports the ever-changing strategy, requirements and priorities of the businesses.

Global Supply Chain Management: The global supply chain is the one that is not contained within the country boundaries and it extends to all the possible foreign countries whether they are vendors or manufacturers or customers. The need for the global supply chain can be understood the following points,
  1. The concept of economics tells us that the main reason for the business to exist is to lower the costs while simultaneously increasing sales and profits. So when the business goes global, the likelihood of sales also goes up because business opens up the global market have consumers all around the world.
 2. The global supply chain allows businesses to reduce dependencies on the local and national economies because they have business in different nations that will help their economy to sustain even the economy of that nation falls down.
3. The global businesses considering all hours of the day with consumers from every point on the globe. The businesses can go for 24 hours a day, 7 days a week. 365 days a year with the number of internet users in the right way.
4. Good businesses are always directed in the motive of reaching as many customers as possible. The global supply chain allows the scope of expansion and reaches more customers as they enter into the market.

Elements of Supply Chain Mangement: Business experts narrowed down the elements of SCM into four categories. Those are Demand Management, Effective communication, Process Integration, and Collaboration.

  Demand Management: Demand management is a planning methodology used to forecast, plan for and manage the customer demand for product and services. Every aspect of the business should be focused on your customer. The success of demand management is all about pulling the supply and resources through the supply chain system in the same manner in which they are needed to meet the actual customer demand.
             The supply and demand of the product and services should always go hand in hand. In the competitive market, multiple companies have the capability of satisfying the customer. The supplier will create enough product to meet the demand of a certain price. So, when the supply exceeds the demand the price will go down, On the other hand, when the demand exceeds the supply, the price will go up. It is clear that consumers react to the price of the available supply.

Effective Communication: Effective communications are important in Businesses and Supply Chain. When the organization identifies the sources of demand, then the operational information will be disseminated to all the members, especially who are involved in the supply chain. Effective communication will help to remain their duties and responsibilities in the supply chain network so that they can deliver what is expected of them,

Process Integration:
SCM involves the integration of business processes in order to facilitate the continuous flow or movement of resources. In other words, SCM entitled collaboration and partnership between the players of business processes. It covers the relationship between the suppliers, buyers, product developers, and end users so that the information being shared or exchanged among them.
  It has the following processes,
  1. Customer Management: It involves customer relationship management and customer service management. The organization has to provide real-time information about its products and services such as availability, logistics and other information that customers may be interested in.
 2. Manufacturing Flow Management: The predictive value of the demand management process enables the organization to produce and supply products and services more reliably and in a more flexible manner. Depending on the demand, the organization can make a better decision related to the manufacturing processes such as scheduling, batches, lot sizes, and work intervals.
3. Procurement Management: It is more than a simple act of purchasing. There are a lot of details to pay attention to obtaining raw materials and products from suppliers outside the organization. It includes sourcing for suppliers, resource planning, assessing the need for supplies of the organization, order placement, transport, storage and warehousing of the purchased supplies. The important steps in procurement processes are to discover and select potential suppliers and develop & manage the supplier relationships.
4. Product Development:  SCM helps to shorten the product life cycles and decrease the time to market the products. Thus product development can easily be integrated with customer service and customer relationship management.
5. Inventory Management: Businesses has to maintain an inventory of their supplier or raw materials. Companies maintain the inventory or stock of the materials until it will be needed in the manufacturing process. The inventory management process covers to keep track finished goods that came out of the production process and awaiting delivery to the customers. Also, it will be conducted to keep the amount of wastage low, as well as the cost of storing inventory.
6. Supplier Relationship Management: It is related to the procurement process. The companies conduct procurement process smoothly and more efficiently that relies on the relationship of organization with suppliers or providers of the materials that are being procured.

Collaboration: It is the relationship between top management and its people, between members of the organization and partners in the supply chain. Maintaining a good relationship with suppliers will increase the likelihood of reducing the costs as well as they provide the quality of materials or product that they supply will be high. You might be seen the companies had partnered with certain suppliers for years or decades even. This is because of the excellent SCM, with a focus on collaboration and partnership.

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