Supply chain management (SCM)

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. 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). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service. Supply chain management flows can be divided into three main flows:

The product flow The information flow The finances flow

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. There are two main types of SCM software: 1. Planning applications 2. Execution applications Planning applications use advanced algorithms to determine the best way to fill an order. Execution applications track the physical status of goods, the management of materials, and financial information involving all parties. Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise (this is called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company). This shared data may reside in diverse database systems, or data warehouses, at several different sites and companies.

By sharing this data "upstream" (with a company's suppliers) and "downstream" (with a company's clients), SCM applications have the potential to improve the time-to-market of products, reduce costs, and allow all parties in the supply chain to better manage current resources and plan for future needs. Increasing numbers of companies are turning to Web sites and Web-based applications as part of the SCM solution. A number of major Web sites offer e-procurement marketplaces where manufacturers can trade and even make auction bids with suppliers.

The Strategic advantage of E-Supply Chain Management. (E-SCM)

1. E-SCM covers all aspects of a business, from the stage of raw materials right on to the end user. Each and every aspect of the cycle is covered by the E-SCM be it sourcing, product design, production planning, order processing, inventory management, transportation, warehousing and customer service. The E-SCM manages the flow between the different cycles and spans across the different departments and companies involved and the applications used by these departments and companies should be able to talk to each other and understand each other for the E-SCM to work properly. 2. In a traditoinal company which does not employ E-Commerce 17%-50% of the price of its products is got from the cost of just moving the products from their manufacturing plant to shop shelves. This includes the margin of the retailer and of the distributors. Most of the cost is attributed to logistics and holding inventory. An efficient E-SCM can bring down the prices of products by as high as 40% and it does so by eliminating overstocking by reducing the average inventory levels to what is needed and by so doing lowering warehousing costs and transport costs since there won't be any unneccessary trips when every stage of the supply chain is in synch with each other. This will not only give the company a cost benefit but will also result in improved customer service levels, improved competitiveness and an overall gain in profitability for the organisation. 3. In an E-SCM application system communication between the different departments or different companies is in real time and data can be integrated with back office systems thus reducing paperwork. Using the Web to eliminate paper transactions can generate substantial savings of cost and time. It facilitates the removal of purchase orders, delivery confirmations, bills of material and invoices. The switch away from paper can also speed up response and improve communications with those in different time zones or who work outside normal office hours. Another significant potential benefit is a reduction in the errors associated with activities such as re-keying data and receiving orders by telephone calls and handwritten faxes. 4. To leverage the full benefits of e-logistics in an E-SCM and achieve full customer satisfaction visibility throughout the entire supply chain must be completely transparent. This is achieved through the movement of information in tandem with goods and services. Customers thus have complete real time consignment status information over the Web, while at the same time suppliers and delivery

companies can save on the salary previously devoted to employees answering queries on order status. E-SCM's main strategic advantage lies in its ability to allow real time exchange of information to take place between the company's employees and their trading partners, namely customers, distributors & manufacturers, regarding product configuration, order status, pricing & inventory availability. Such functions improve order accuracy and provide 100% order fulfillment through accurate inventory information. This real-time data enables users to make informed ordering, purchasing and inventory decisions and thereby enhances the quality and scope of customer service.

Supply Chain Management

Enabling recognizes the challenges of wholesalers, including selling to the fiercely competitive retail industry; that is why we have Wholesale Trade experts who understand the sector and can help your business get ahead with financial, process, and customer management via a fully integrated Supply Chain Management Systems that provide your company with a competitive advantage. Enabling's, Supply Chain Management Systems allow you to meet your customer demands more effectively and efficiently. Our Supply Chain Management Systems give you the ability to quickly and effectively process orders to ensure customer needs are understood and addressed quickly. Our Supply Chain Management Systems will also provide your business with the flexibility to respond to ever changing customer demands and market trends. Benefits of an integrated Supply Chain Management Systems include: Lower Costs - By adding an effective SCM system to a business, the added global efficiency can lead to lower costs of raw materials. This system efficiently plans for materials to be brought to your company from the lowest cost provider possible and at just the right time to ensure there is no excess or deficiency in the material. A SCM system can improve your company's relationship with vendors so that there are opportunities to cut costs like through a volume discount. Improved Collaboration - A SCM system wired in to the latest software allows you to know the position your raw materials and your finished products are in by tracking both your suppliers and your distributors. These companies can also track where you are at in receiving or sending those materials. This knowledge can keep relationships between these businesses strong. This system often includes the development of reports on how the chain of goods progresses from supplier through distributor. These reports help your businesses to determine potential areas of improvement. Cycle Times - The cycle time can be defined as the time it takes your business to turn over a product from raw materials, give it to your distributor to sell and then make

enough money to purchase new raw products to start the cycle over. If at any point it takes too long to obtain these raw materials, production may have to stop which will slow down your organisation. A SCM system improves cycle times and ensures that raw materials are provided when your business needs them so that you never have to stop production. Response to Conflict - Unfortunately, a business cannot always run smoothly and there are a number of factors that can lead to problems in the production of a product. If an issue occurs with the suppliers of your company, you may have to change how you produce your product. If the distributor goes out of business, you will have to find another way to sell the product. A SCM system lets your company better cope with problems at either side of the production spectrum. You can quickly and easily figure out a response to the problem instead of being surprised by it at a later time.