Internet Technologies and the Supply Chain Term Paper

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Internet Technologies and the Supply Chain

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The criticalities of the method of managing orders, manufacture and delivery of the products strangle every process of Supply Chain Management systems. The reality is that most of the systems are not up-to-date in dealing with all the variables along with that of the supply chain process. Many manufacturing concerns are traditionally structured to maximize productivity and lower costs disregarding the fact of its impact on inventory levels and distribution capabilities. The Supply Chain Management is still to realize the advantages that have been assured. It is noticed that the elementary building block of SCM that is effective information sharing has not been traditionally supported by the traditional technology. The Supply Chain Management solutions through the application of Internet is intended to assist customers and suppliers share mission critical information on a timely basis enabling real-time and effective decision making. The Internet Technologies makes easier the persistent and near-real time information sharing with application of a ready made infrastructure rather than forcing the information to follow the traditional inventory flow. The Web-based supply chain management facilitates the placement of customer orders on the suppliers even from home -'home shopping'. The suppliers are required to localize in the center of a Web of customers and all communicating requirements and information through the Internet. The Internet can entail for the replacement of lead-time and waste for information and with more effective timely information, it is possible to reduce and avoid such costs. The significant and measurable benefits are reduced uncertainty in demand and availability, reduced cycle time, reduced inventory, lower costs, increased throughput and better on-time performance, those are the actual determinants.

Internet technologies and the supply chain

Introduction

Term Paper on Internet Technologies and the Supply Chain Assignment

The network of the services and distribution choices that fulfils the job of acquisition of materials, and the process of turning those materials into intermediate and finished products and the delivery of the finished products so produced to customers are implied broadly as Supply Chain Management. The Manufacturing concerns as well as the service organizations are concerned with the Supply Chain Management irrespective of the fact that the complexity of the same may differ from industry to industry and from firm to firm. The Supply Chain in its simplest form indicates for a single product involves procurement of raw materials from vendors, transformation of such materials into a finished product in a single step and then delivery of such finished product to the distribution centers and finally customers. However, in real life the supply chains are very complex involving multiple end products with shared components, facilities and capabilities. (An Introduction to Supply Chain Management)

Conventionally, the operation of marketing, distribution, planning, manufacturing, and the purchasing department of an organization along the supply chain are somewhat independent. Such organizations have their own functions and goals and these are often conflicting. Many manufacturing concerns are traditionally structured to maximize productivity and lower costs disregarding the fact of its impact on inventory levels and distribution capabilities. The purchase contracts sometimes are negotiated with little information on the present trend. Such an independent view deprives the organization of an integrated plan which is felt essential that seeks to integrate the different functions together so as to achieve the clear objective of maximization of productivity. Supply Chain Management sought to be a strategy that entails the organization of such integration. Supply Chain Management is visualized as a mid-way between the fully vertically integrated firm where the entire material flow is owned by a single firm and those where each channel member functions quite independently. (An Introduction to Supply Chain Management)

The Supply Chain Management is still to realize the advantages that have been assured. In reality, the companies identified as early adopters of Supply Chain Management have been getting its advantages from its various strategies like Vendor Managed Inventory --VMI, Efficient Consumer Response -- ECR and Distribution Resource Planning -- DRP. It is noticed that the elementary building block of SCM that is effective information sharing has not been traditionally supported by the traditional technology. The application of Internet technologies in this sphere is presently seen to expand the principles of SCM by entailing cost effective communication backbone so as to facilitate sharing of the right information between the business partners more efficiently and more effectively than ever before. The Supply Chain Management solutions through the application of Internet is intended to assist customers and suppliers share mission critical information on a timely basis enabling real-time and effective decision making. (Internet-enabled supply chain management)

The major application in such direction is Electronic Data Interchange -- EDI, an enabler that caters to the varied Continuous Replenishment strategies. In all such cases the objective is to enhance partnership with suppliers and customers, share the information more successfully and to exploit the real WIN: WIN benefits like reduced inventory, higher level of service, reduced obsolescence etc. The Internet is regarded as a complex association of integrated servers around the world. Most of such servers are concentrated in U.S. And Europe linking all kinds of organizations, ranging from the field of educational, professional and entertainment. The stress in on corporate presence through hosting a Home Page with a view to catering to the ideology of 'electronic storefront' a mode of electronically attracting customers and business partners through the Internet with the use of a programming language HTML.

The SCM process in number of organizations is not able to achieve the desired business advantages because of the fact that they are still operating in the manner they have always operated since long. The traditional SCM involves a sequential process where in the retailer will sell the product and then place the order to refill the inventory; the supplier will receive the order then stock up the inventory to the retailer; the supplier will use the inventory and place an order on the manufacturer; the manufacturer in turn will consume the inventory and then place an order on the raw material supplier and the cycle go on. The process involved in the supply chain is somewhat seen to be logical and perhaps even predictive due to its sequential nature. (Internet-enabled supply chain management)

In such a manner the information flow has to follow the inventory flow at the worst where as its flow preceding inventory flow is regarded as the best. Companies normally safeguard their business forecasts and had no inclination or any good motive in sharing it with any business partner. However, it was seen as hazardous to share such information with the business partners. Presently this is still a normal business practice, irrespective of what the visionaries are recommending. It has thus seen that the traditional SCM only had the instruments to concentrate on Cycle Time Reduction in contrast to Cycle Time Elimination. The traditional supply chain management process can be better represented in terms of the above diagram.

The Internet technologies have enabled the organizations to extend their infrastructures beyond the physical boundaries. The consumer, retailer and a buyer at a Manufacturers location can access the Internet. Rather than sticking to a sequential relationship of placement of orders on a supplier, consumption of inventory and placement of another order on the preceding level of the supply chain, the World Wide Web turns the process of SCM into a Web of applying near- instantaneous communication facility of the Internet enabling passing of the information directly to the relevant level of the supply chain. The Internet Technologies makes easier the persistent and near-real time information sharing with application of a ready made infrastructure rather than forcing the information to follow the traditional inventory flow. (Internet-enabled supply chain management)

The determinants of Demand will be quantified and intimated to the retailer so as to create and handle in-store promotions. The near real time reach to the partners in the supply chain will have an influence on the way Point of Sale -- POS data is being applied by the retailer in terms of replenishment. New method of taking into account the customer and consumer preferences will influence the present vision of POS replenishment solutions as the Internet involves communication of the varied needs and habits to more companies more effectively than the traditional 'place order, consume inventory, place order, consume inventory' cycles. This can be better represented in terms of the above diagram at the pre-page. The Web-based supply chain management facilitates the placement of customer orders on the suppliers even from home -'home shopping'. The suppliers are required to localize in the center of a Web of customers and all communicating requirements and information through the Internet. The process can be depicted in terms of the above diagram.

In respect of the promotion information any level within the supply chain can communicate directly with any and all other levels of the supply chain. The product demand being watched and handled by the Internet will be communicated with each level of the supply chain instantaneously. The traditional process of order placement, inventory consumption and replenishment has been brought… [END OF PREVIEW] . . . READ MORE

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