1. Electronic Commerce Semester 2 Term 2 Lecture 10

2. Managing “Pull” Supply Chains Few companies understand how to manage “pull” supply chains optimally The reason for this is quite simple: Effective SCM requires firms to: –Gather customer demand requirements quickly and accurately –Make the best choices about how they can meet those requirements at the lowest possible cost –Make informed decisions along the entire supply chain, from produring raw materials to manufacturing/assembling products –Distribute finished goods to the consumer and collect the requisite payment

3. Getting it Right Performing these four steps well and in synch with one another is easier said than done To achieve this, supply-chain managers have to accomplish three things: –Provide a unified action plan to all the players –Enable communication among the players –Co-ordinate the players and encourage them in the right direction

4. Elements of Supply-Chain Management At the highest level, SCM crystalises into three key processes: planning, executionm and performace measurement The common theme in all three is the need to optimise processes that extend beyond narrow functional areas, taking into account the needs of the customer This view is reinforced by trends in recent years, where they has been a shift from a purely functional view to a more process-oriented view To take a more process-oriented view, firms must shift from one-time transactions to shared online processes

5. Planning Systems Planning systems focus on having the right product at the right place and at the right time These systems facilitate order taking and information gathering from the customer and orchestrate the flow of information along the entire supply chain, from initial order to raw material procurement to final consumption This requires understanding demand and is fundamental to successfully managing all parts of the supply chain

6. Execution Systems Execution systems facilitate the physical movement of goods and services through a supply chain This focus traditionally includes some application- based systems such as customer order fulfilment, inventory control, and manufacturing and logistics Execution systems focus on operational efficiency, which entails finding new ways to streamline and automate day-to-day business operations to reduce costs and improve productivity The need for cross-functional integration has become a central theme of execution systems

7. Performance Measurement Systems Performance measurement process keeps track of the health of the supply chain This is necessary in order to make more informed decisions and respond to changing market conditions Here, accounting and financial management systems are the real focal point These applications use e-commerce tools such as data warehousing to allow for effective information auditing and analysis But this has proven difficult, as most operational business systems are not designed for easy access to information for decision support purposes

8. Integrating Functions in a Supply Chain SCM takes isolated business functions and allows them to function in tandem This is not limited to an individual company, but across all firms in a supply chain – from suppliers through to the customer

9. Key Functions of SCM Managing information about demand to enable better understanding of the markets and customer needs Managing the flow of physical goods from suppliers Managing the manufacturing process to ensure low production costs Managing the financial flows with suppliers and customers through financial intermediaries Co-ordination of processes and integration of data are common in all of the above SCM functions