E-Supply Chain Management (E-SCM) | Explanation | Issues | Advantages

What is E-Supply chain management (E-SCM)?

E-Supply chain management is practiced in manufacturing industries. E-SCM involves using internet to carry out value added activities so that the products produced by the manufacturer meets customers’ and result in good return on investment.

E-Supply Chain Management - Explanation, Activities, Players, Issues, Advantages

E-Supply Chain Management – Explanation, Activities, Players, Issues, Advantages

E-SCM is the effective utilization of internet and business processes that help in delivering goods, services and information from the supplier to the consumer in an organized and efficient way.

Players of E-Supply Chain Management

ESCM chain consists of the following players — manufacturer, logistics companies, distributors, suppliers, retailers and customers. E-Supply Chain Management concentrates on the coordination between the various players in the chain. Coordination is very essential for the success of the organization. E-SCM focuses on reducing the inventory cost.

Supply Chain Management flow

SCM flows can be divided into three main activities

  1. Product flow,
  2. Information flow and
  3. Financial flow.

1. Product Flow: The product flow includes the movement of goods from a supplier to a customer, and also any goods returned by customers.

2. Information flow: The information flow involves transmitting orders and updating the status of delivery.

3. Financial flow: The financial flow consists of credit terms, payment schedules, consignment and title ownership arrangements.

Issues dealt by Supply Chain Management

Supply chain management deals with three issues:

1. Coordinating all the order processing activities that originate at the customer level, such as the process of order generation, order acceptance, entry into order processing system, prioritization, production, and material forecast.

2. Material related activities such as scheduling, production, distribution, fulfillment and delivery and

3. Financial activities such as invoicing, billing, fund transfer and accounting.

SCM involves counter checks of materials, information and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. It involves coordinating and integrating these flows both within and among companies.

Extranet, intranet, Internet are used in e-supply chain. Extranet helps to connect the participating companies. It may be the supplier or the customer. A customer can check the order status. Likewise, a supplier can collect data about inventory to know about the replenishment of the inventory.

With the help of internet, a company can advertise about the product and accept online orders. With the help of intranet, an organization can maintain communication within the boundaries of the company. It is said that the ultimate goal of any effective SCM is to reduce inventory.

E-supply chain enables to link the supplier with the customer by exchanging information instantaneously. The organization has sufficient inventory when required. There will not be any shortage or surplus of inventory. Shortage of inventory brings down the reputation of the firm. Likewise, excess inventory blocks the funds of the firm unnecessarily.

Advantages of e-supply chain management

Companies implementing E-SCM can enjoy the following advantages:

1. It improves efficiency

2. It reduces inventory

3. It reduces cost

4. It helps to take competitive advantage over competitors.

5. It increases ability to implement just-in-time delivery, increases on-time deliveries, which enhances customer satisfaction.

6. It reduces cycle time, increases revenue, by providing improved customer service.

7. It improves order fulfillment, order management, decision making, forecasting, demand planning, and warehouse/distribution activities.

8. It reduces paperwork, administrative overheads, inventory build-up, and the number of hands that handle goods on their way to the end-user i.e., the customer.

Leave a Reply




Recent Posts


Related pages


disadvantages e commercemodal instance samplingwhat is the role of financial intermediaries in an economymbo meanswhat are the disadvantages of capitalismstyles of leadership autocraticmethods of apportionmentexceptions of privity of contractdiversification marketing definitionreceivables to sales ratiocost ascertainmentagreement in restraint of legal proceedingswhat is the meaning of exemption in hindinon probability random samplingpurchaser qualificationitinerantsaccounting overheadsrbi setupdisadvantages of a monopolycapitalized expenditurewho is the maker of a promissory notewhat is mixed economy in economicsdeductive and inductive methodleverage formulasdefine dumping economicslevel of urbanization definitionwhat is the difference between managerial accounting and financial accountingeconomic dumping definitioncash payback period formulaconglomerate mergersfeatures of capital budgeting pdftechnical diseconomies of scalesales personnel duties and responsibilitiescorporate veil in company lawadvantages of payback methodstages of socialisationdefinition of speculatorhow to calculate debtorscpc salarynon bank financial intermediarybailment and pledge meaningdisadvantages of decentralised structuredefinition mercantilemain functions of wtohow to maintain petty cash bookexcess capacity monopolychits fundsadvantages and disadvantages of acceptance samplingwhat is iou in accountingdisadvantages of target marketingqualification and disqualification of an auditordefine inpersonalmeaning of merits and demeritssebi importanceprinciple of caveat emptornsdl contact listfieomeaning of mechanisationmbo advantagesimplementing tqm in an organizationcapital budgeting wikidisadvantages and advantages of franchisingsmale facedefinition of shopping goodsmerge meaning in hindiadvantages of scmstages of personal selling processvouching definitionwhat are the disadvantages of franchisingdisadvantages of historical coststructure of rbibenefits of securitisationadvantages of listing a company on the stock exchangecluster sampling designdefine customer relationdefine paid in arrearswhen rbi establisheddisadvantages of foreign tradeautocratic leadership theory