E Supply Chain Management involves incorporating digital technology to manage diverse supply chain activities. Supply chain management involves managing numerous tasks from procurement of raw materials to distribution of the finished products. The use of advanced technology helps optimise every step of the process.
It guarantees increased efficiency, improves coordination between all parties involved, expedites the process, lowers total costs, and more. According to a recent poll, 31% of participants stated that they are now in the process of integrating digital supply chain analytics, while 60% of respondents stated they currently use the tool.
What is E supply Chain Management (E-SCM)?
E Supply Chain Management (E-SCM) is the use of digital technologies to optimise and manage the various activities involved in a supply chain. This includes everything from sourcing raw materials to delivering finished products to customers.
E-SCM utilizes electronic communication and data sharing between different supply chain partners, such as suppliers, manufacturers, distributors, and retailers. By leveraging digital technologies such as cloud computing, big data analytics, and the Internet of Things (IoT), E-SCM enables real-time visibility and collaboration across the supply chain, improving efficiency, reducing costs, and increasing customer satisfaction.
Technological advancements have elevated the need to effectively manage the supply chain. Businesses constantly experience the need for a fast, flexible, and continuous supply chain model to stay ahead of the competition.
Therefore, traditional business paradigms are rapidly being replaced by new business processes based on the latest technologies. e-supply chain management (e-SCM) results from advancements in technology in the field of supply chain.
e-SCM is an integrated business application that automates the supply chain activities of organizations. It is developed by combining an e-procurement system, an e-billing system, and other e-business tools.
Components of E Supply Chain Management
The role of SCM in eCommerce is huge. eCommerce stores can run successfully only if they have a robust supply chain management system. Online businesses that have incorporated E-SCM have witnessed tremendous growth. E-SCM runs on certain components. Here is a look at these elements and how they help manage the supply chain process:
Advanced Scheduling and Manufacturing Planning
E-SCM analyses the customer orders and generates a report based on the same. Businesses leverage this report to understand customer demand and plan their manufacturing process accordingly. This report helps in planning at the ground level. It facilitates efficient planning and advanced scheduling of manufacturing activities and logistics.
Demand Forecasting
E-SCM is equipped with advanced tools and forecasting techniques. These tools can be used to forecast raw material requirements. Depending on the demand forecasting, the manufacturers plan the purchase of raw materials and understand the labour requirement well in advance. An increase or decrease in the demand for goods can be assessed using this advanced tool and arrangements can be made to meet the same.
Transportation Planning
Wondering what is the E-supply chain’s role in transportation planning? To begin with, it assesses the mode of transportation suitable to move your products and maps it with their availability. This helps in choosing the most appropriate mode of transportation. With digital technology, you can ensure that the raw materials reach your desired location at the right time. It also ensures that the finished products reach the suppliers and distributors promptly.
Distribution Planning
Distribution of finished products is a crucial step in the supply chain management process. Finished products move through different channels including manufacturers, distributors and retailers before reaching the consumers.
A lot of planning needs to be done at the distribution level to ensure a smooth flow of products to the wholesalers and retailers. E-SCM in eCommerce helps in efficient distribution planning. The advanced system integrates distribution channels with demand forecasting, manufacturing and transportation planning for seamless distribution.
Order Commitment
e-SCM enables organizations to precisely estimate the delivery dates of suppliers through a comprehensive demand fulfilment cycle. The organizations can interconnect order commitment with the rest of the supply chain departments to ensure accurate delivery of goods and services.
Benefits of E Supply Chain Management
e-SCM integrates SCM practices with Web technology to optimize production and information flow among business processes. There are various benefits of implementing e-SCM in organizations, which are as follows:
- It reduces the costs of logistics, production, procurement, and distribution channels.
- It improves the control of processes and SCM in an organization.
- It increases the organization’s ability to assess cost-effective suppliers for raw materials.
- It enhances access to information, which allows quick response time.
- It controls inventory, as suppliers and distributors are connected through the Internet for the related information and can replenish it at the most appropriate levels.
- It improves back-office management as data is consistently available.
Key Functions of E Supply Chain Management
Check out the following points to know what is E-supply chain’s key function:
Inventory Management
E-supply chain management enables real-time exchange of information related to the inventory and thus helps in managing it efficiently. The order invoices, receipts and other important documents can be shared quickly among the trading partner, enabling better management.
Channel Management
E-SCM allows organisations to share information about any changes in operational activities with the distributors, suppliers and retailers. They do not have to seek such information through calls or emails. This enables them to make better decisions related to sales and distribution.
Payment Management
E-SCM is embedded with electronic payment systems. It helps in generating invoices quickly. It also decreases the chances of errors in the bills. With this system in place, more invoices can be processed in one go which lowers the transaction fees and processing cost.
Productivity
The use of digital supply chain management helps improve communication among various trading partners including manufacturers, retailers, distributors and salespeople. Improved communication at various levels enhances coordination and leads to greater productivity.
Access to Important Data
One key function of E-SCM is providing access to important data that helps drive the supply chain activities efficiently. Advanced digital tools help organisations collect as well as analyse crucial data. Demand forecasting is done based on this analysis and business owners can make informed decisions.
FAQ: E Supply Chain Management
Which technologies are used in E-SCM?
E-supply chain management (E-SCM) makes use of advanced digital technologies including big data analytics, the Internet of Things (IoT) and cloud computing.
Does E-SCM promote sustainability in Supply Chain Management?
E-SCM promotes sustainability in supply chain management. It does so by optimising routes, reducing excess inventory through better demand forecasting and minimising waste in various supply chain processes. Research reveals that 12% of logistics-related emissions will come down by 2025 with the help of digital transformation.
Is E-SCM suitable for all kinds of businesses?
E-SCM is suitable for all kinds of businesses across industries. However, businesses that have complex supply chains can benefit by incorporating digital technology to manage their supply chain activities.
Conclusion
Managing the supply chain in today’s digital age can be a complex task, but e supply chain management is here to simplify and streamline the process. By leveraging technology and automation, businesses can reap numerous benefits such as increased efficiency, improved visibility, reduced costs, and enhanced customer satisfaction.
The key functions and components of e supply chain management work together harmoniously to create a seamless flow of goods and information from suppliers to customers. Whether you’re a small business or a multinational corporation, embracing e supply chain management can be a game-changer for your operations.
So why wait? Start exploring the world of e supply chain management today with Qodenext and unlock the potential for growth and success in your business!
