The flow of material, information, money, and services from raw material suppliers through factories and warehouse

to end customer

Supplier

Factory

Warehouse

Distribution

End Customer

" Is the strategic management of activities involved in the acquisition and conversion of materials to finished products delivered to the customer" Material Flow
Information Flow

Supplier Management

Customer Management

Schedule / Resources

Conversion

Stock Deployment

Delivery

Leads to Business Process Integration

Supply chain is a process umbrella under which products are created and delivered to customers. It includes suppliers, manufacturers, distributors, retailers and customers. It also includes transporters and warehouses. In essence, it consists of all parties involved, directly or indirectly, in fulfilling a customers request.

Upstream 1st Tier Supplier 2nd Tier Supplier

Supplier Relationship Management, Procurement Management

Internal Manufacturing Packaging

Downstream Distribution Center Retailer Customer

Internal Value Chain, Manufacturing, Inventory Control

Distribution, Warehousing, Transportations

Supply Chain Replenishment Production and Distribution integration to facilitate make-to-order, and assemble to order Reduce inventory costing Eliminate stocking point e-Procurement Requisition, ordering, tracking, payment Improving the operation of supply chain Webbased functions online catalog, purchase order, and shipping notice

Inventory Management using Wireless Technology

Using PDA in inventory entries (receiving, count, issuance) Collaboration Planning Buyer and seller sharing demand & forecast plans e-Logistics Web-based technology to support distribution, inventory tracking, transportation

Electronic Data Interchange (EDI) Facilitate supply chain relationships Intranet Corporate internal network for collaboration

Extranet
Facilitate interorgnizational communication Corporate Portal

A gateway for internal and external collaboration, and communication

Workflow Systems and Tools Managing the flow of information in organization

Order taking Order fulfillment Electronic payment Inventory minimization Managing risk Collaborative commerce

Advanced Planning and Scheduling

Store e-Procurement E-Commerce Sales

Customer

Buy

ERP

Supplier

Make Support

Knowledge Management

Suppliers

Retailer

Business Decision Makers

EDI

Check DC Warehouse Inventory

BAM

Re-stock Orders Orchestration Messaging

DC Warehouse Inventory System

BRE
(Filter Tags)

DC Warehouse

RFID

BizTalk RFID

ERP System

Store Inventory System

Stores

Source: Introducing Microsofts Integration Solution: BizTalk Server 2009

Achieving business edge through process agility

Bank
Core
Consumer Online Shopping Site

Corporate
Payments Hub

System

Bank

Vendor
SWIFT Network

Source: Introducing Microsofts Integration Solution: BizTalk Server 2009

Achieving business edge through process agility

Supply chain management is the coordination of entities, activities, information and resources involved in moving a product or service from supplier to customer; where entities consist of manufacturers, service providers, distributors and retail outlets.

In other words, supply chain management means transforming companys supply chain into an optimally efficient, customersatisfying process, where the effectiveness of the whole supply-chain is more important than the effectiveness of each individual department.

When the co-ordination for managing the supply chain takes place by using Internet technologies it is known as e-supply chain management. Inter-enterprise integration is a major focus of e-supply chain management.

Supply chain management is identified by the following features: 1. Material flow. 2. Financial flow. 3. Information flow.

1. Material flow. It is in the direction from supplier to customer through the chain. It involves procurement of the materials, transformation of these materials into finished products and distribution of these finished products to the customers.

2. Financial flow. It involves payment options, credit card information, credit terms, payment schedule etc. It is in the direction from customer to supplier as payment for products or services originates from customer and end at supplier.

3. Information flow. In todays e- supply chain management flow of information is considered to be as significant as the flow of material and finance. It involves product information, demand forecasts, order status report, delivery report, customers communication, etc. Information is always two-way, particularly in e-business.

Enterprise integration means when different functions of an enterprise are integrated into one. But supply chain management is moving toward interenterprise integration.

Different components of a supply chain like supplier, manufacturer, retailer, etc. are separate enterprises. These enterprises create a collaborative system for interenterprise integration. In this system, each component of a supply chain has access to required information. As a result, inventory tends to zero and just-intime (JIT) management can be introduced. So, inter-enterprise integration brings down inventory cost, as well as production and distribution costs.

Responsive: This kind of supply chain responds quickly and accurately to customers needs. ATP(available to promise) is an important feature of this responsiveness. ATP systems provide realtime integrated checks throughout the entire supply chain.

Adaptive: This kind of supply chain can rapidly be reconfigured to adapt to changing consumer demand. Adaptive supply chain helps the companies to respond to changing business conditions and consumer requirement. Intelligent: It is a dynamic kind of supply chain and continuously fine-tuned to perform well.

Advanced scheduling and manufacturing planning: It provides detail co-ordination of all manufacturing and supply efforts based on individual customer orders. Scheduling is based on real-time analysis of changing constraints throughout the process, from equipment malfunctioning to supply interruptions. Scheduling also creates job schedules for managing the manufacturing process as well as logistics.

Demand forecasting: This module supports a range of statistical tools and business forecasting techniques. It takes into account changing market scenarios and economic factors while making decisions.

Transportation planning: This programme facilitates resource allocation and execution to ensure that materials and finished goods are delivered at the right time and at the right place, according to the planning schedule at a minimal cost. It considers such variable as transportation mode like railways, trucks, airlines, and availability of each mode.

Distribution planning: This is integrated with demand forecasting, manufacturing schedule and transportation planning to reach the customer. This module addresses customerspecified requirements.

Order commitment: It is a system that allows vendors to accurately quote delivery dates to customers by providing real-time detailed visibility into the entire fulfillment cycle. Order commitment is linked to all other modules so that accurate delivery of goods and services can be guaranteed.

Process of e-supply chain fusion involves the migration from existing non-integrated supply chain to more effective integrated supply chain and thereby creating a tightly woven supply chain.

Stage I - Information sharing: Wellestablished and effective communication channel is required at the 1st stage. For example, the consumers can interact effectively with the entire enterprise from a single store or Website.

Stage II Joint performance measurement: Key challenges include creating performance measurement and developing a clear understanding of the costs and benefits involved in supply chain integration. Collaborative planning processes are created in this stage.

Stage III Realignment of work: Through the process of collaboration decision-making is decentralized and work load is shared among the enterprises.

Stage IV Redesigning products and processes: Products are processes are redesigned so that work becomes easier and more efficient. A major challenge is to include the entire supply chain in the interenterprise process reengineering efforts.

1. Determining the right e-supply chain structure: Need for cost-efficiency does not permit to maintain a large inventory of finished products for the customers. Market demands may change and the price-structure may also undergo changes. For this reason, it is important to maintain the right kind of esupply chain structure to ensure right product at the right time.

2. Enabling effective differentiation capabilities: Organizations develop strategies for competitive differentiation, offering customers something unique that the competition does not have. Differentiation is in terms of products and services and also in terms of performance standard. Build-to order(BTO) business models are used for this purpose.

3. Facilitating effective order-fulfillment capabilities: Accurate order-fulfillment is challenging and offers a great opportunity for reducing costs and improving customer service simultaneously. An integrated supply chain is critical to order fulfillment. Effective supply chain management configures the chain to respond to order.

4. Determining the right infrastructure capabilities: Creation of a real-time supply chain management infrastructure is a major task for an organization. Planning, selection and implementation of SCM solutions is becoming more complex with the change of technology and with the increase of the number of business partners of a company.

Partner collaboration as strategic asset Information visibility

Speed, cost, quality, and customer service

Tightly integration