What is Supply Chain?
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To comprehend the term "Supply Chain Management" we must first understand as to what is a supply chain. A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.
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What is Supply Chain Management?
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Supply chain management (SCM) is the oversight of materials, information and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies.
SCM is typically viewed to lie between fully vertically integrated firms, where the entire material flow is owned by a single firm and those where each channel member operates independently. Therefore coordination between the various players in the chain is a key to its effective management. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed).
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Major Flows in SCM
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Supply chain management flows can be divided into three main flows:
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The product flow |
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The information flow |
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The finances flow |
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| The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements. |
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What is e-SCM?
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As brick and mortar enterprises go about web enabling their processes, there is one area where most of the early action should take place - the Supply Chain. A web enabled Supply Chain management (e-SCM) solution is the digital nervous center of the entire business and an effective e-SCM solution can save companies millions of dollars in costs.
E-SCM is the optimal combination of technology and business processes that optimizes delivery of goods, services and information from the supplier to the consumer in an organized and efficient way. It gives companies involved in developing, manufacturing, distributing and retailing of products access to all of the critical information they need to plan their operations in an efficient way - whatever and wherever they need it. A complete supply chain management solution also includes customers, service providers and partners. So, we can conclude that e-SCM is a large, dynamic network of complex but well-defined relationships with multiple channels in the business which provides accurate information to everyone in the network.
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The Need for e-SCM
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E-SCM provides brick and mortar companies the flexibility and the agility to be in constant control of their business. It improves efficiencies and reduces costs substantially while giving companies the adaptability to modify their business processes without having to undertake major technological initiatives.
The Internet has changed all that. It has transformed the old-fashioned primordial process into something closer to an exact science. Creating an integrated e-supply chain solution will be a major key or barrier to entry and provides critical competitive edge over competitors as it:
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Speed up production and responsiveness to consumers |
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Improves order fulfillment |
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Improves customer service and satisfaction |
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Improves order management |
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Improves decision making |
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Improves forecasting and demand planning |
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Improves warehouse/distribution activities |
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Reduces paperwork |
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Reduce administrative overhead |
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Avoid costly disasters |
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Reduces Inventory build-up |
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Decrease the number of hands that touch goods on their way to the end customer |
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Eliminate obsolete business processes |
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Reap cost-cutting and revenue-producing benefits |
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Garner higher profit margins on finished goods |
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Shortens Sales cycle |
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Strengthens partnerships |
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Effective integration of supply chain management in an organization can save millions, by improving customer service and reducing inventories. The key to getting optimum value out of automating your supply chain is to make sure you have your internal systems working well before you start extending them out over the Internet.
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| What do we offer in our Supply Chain Management? |
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Close vendor management and an efficient supply chain drive tremendous profitability. Intelebiz solution for supply chain management is unmatched in its toolset enable collaboration with suppliers. It controls the information, its flow, its availability, and the rules and activities that are triggered by defined events. It defines a complete workflow to manage purchase orders from requisition through receiving and post-receiving processing. It enables multiple vendor selection, quoting, automated drop ship, track and trace for supply chain visibility; contractual pricing for product purchases, and provides excellent support for services.
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Vendor Management |
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Supply chain management supports full vendor profiling, order status and history, notes, activities, product associations and item specific vendor item codes, descriptions, and costing. Its attribution system enables the definition and storage of any number of aspects of each vendor item in inventory for use in profiling and negotiation.
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Multiple Vendors Sourcing and Alternate Item Management |
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Our system supports the management of multiple suppliers for any item. Vendor specific item codes, descriptions, and costing all are tracked enabling smart purchasing, optimization of margins, and smooth logistics when managing complex item sourcing.
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Receiving |
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The functionality supports direct and remote receiving for onsite and third party logistics. Multiple purchase orders may be concurrently received against in the case of aggregated shipments. Inventory levels are automatically adjusted and the payment processing workflow is triggered.
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Services Procurement |
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Our exhaustive system provides full support for the procurement of services including service definitions, deliverables, timetables, and associated items.
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Purchase Orders Delivery |
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Supply chain System enables purchase orders to be sent to suppliers via mail, fax, email or electronically. Each vendor may have their own preference. The electronic process may be either batch or real-time with confirmation of receipt and shipment notifications delivered automatically.
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Partial Receiving and Back Order Tracking |
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Our functionality supports the receipt of partial orders and maintains real-time status on all backorders. When backorders arrive, it enables the fulfillment of outstanding orders.
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Drop Shipments |
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The functionality manages the process of drop shipments, multiple-site drop shipments, and private labeled third party fulfillment. The configuration engine enables rules definition for shipping costs.
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Automatic Replenishment of Inventory |
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Purchase order auto-generation may be driven by minimum re-order points, sales history, and special orders. Real-time inventory availability across multiple locations may be measured against demand generated through multi-channel sales. An inventory commitment system (on-hold) assures that items are not oversold or under-bought, and an on-order system enables you to keep stock levels in tight control.
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Categorical and Catalog Purchasing |
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Intelebiz functionality supports product category specific purchasing and catalog specific purchasing
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Companies implementing Supply Chain Management may realize benefits of SCM as:
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Reduced inventory |
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Reduced distribution costs |
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Reduced time to market |
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Reduced market risks through effective co-ordination and communication |
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Improved quality of product/service |
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Improved inventory management |
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Increased ability to implement just-in-time delivery |
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Increase in on-time deliveries |
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Increased factory responsiveness |
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Order cycle time reduced |
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Increased revenue |
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Increased visibility of processes |
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Increased customer service |
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Create competitive advantage |
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Here are a few tips to bear in mind while evaluating an e-SCM initiative:
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Get Perspective
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One should envision the business as a whole including its current strategy and where it wants to go. Supply chain strategy is increasingly being integrated with overall corporate strategy.
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Don't Underestimate Learning Costs
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The cost of training people to use new software should not be underestimated. Sending information around the world takes lesser time than it takes to get into someone's mind!
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Link to existing architecture
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Supply chain applications must link to existing enterprise resource planning applications. ERP serves as the nerve center of the organization. Ideally, it should be a single point of visibility for inventory and order taking.
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And last but not the least, Think Global, Start Local! |
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