Revolutions in technology have inspired business companies to improve their own traditional ways of business operations. Ecommerce or online business companies are not an exception.
Nowadays, online business companies are considerably dependent
on effective supply chain management. The success of any business intricately
depends on its SCM streamline.
From the procurement of raw material, until the
product reaches the customer, SCM plays a vital role. Here we’ll describe every
aspect of supply chain management for online business companies. Let’s get
started.
What is Supply Chain Management?
The supply chain management is a system that emphasis
planning, optimizing, and management of all activities. These activities
involve sourcing, procurement, inventory control, customer services, distribution,
and all other logistics management activities. The other name of SCM is
operations management.
Types of Supply Chain Management Systems
The supply chain management systems are classified
into two categories depending on the functions it performs.
1. Supply Chain Planning System
The supply chain planning functions involves;
- Projecting demand for particular
products and preparing a plan for sourcing and manufacturing those products. - Forecast the amount of product to
be manufactured in the assumed period. - Decide where the finished goods
will be stored. - Find the transportation way of
delivering products. - Determine the inventory levels for
raw material, intermediate products, and finished goods. - Deciding the number of products the
company should make to meet customer demands.
2. Supply Chain Execution Systems
The supply chain execution function includes;
- Ensuring the correct delivery of
products from the manufacturers to distributors to vendors and lastly to the
customer. - Inform the status of orders to the
vendors. So, the vendors can provide an accurate delivery date to their
customers. - Track the shipments.
Supply Chain Management for Online Business Companies
These days’ eCommerce
businesses are entirely reliant on SCM. A customer buys things online to
get it in the minimum time. If the companies are not able to deliver it on
time, the customer will never prefer buying in the future. That’s where an
online business company needs a proper SCM.
Information and Communication Technology plays an
essential role in the integration of the supply chain. In the era of supply
chain integration, the internet can reformulate the back-end operations. The
operation includes;
- Designing and developing products
- Procurement
- Production
- Inventory
- Distribution
- Customer support
- Controlling of volumes, due dates,
and capacities - After-sales service support
- Even marketing
Not just that, SCM also focuses on the relationships
of different parties, business models, and promoting new supply networks. Overall,
SCM helps online business companies manufacture products on time and deliver
them to the customer on time.
Benefits of SCM in Online Business Companies
- It provides complete visibility
across the supply chain network. - It helps in establishing a
relationship between customer and manufacturer. - It provides the opportunity to
trade globally. - Minimize delays.
- Reduces the overall cost of the
products that come from different stages. - Customer satisfaction.
Conclusion
All in all, the SCM has become a strategic choice for
online business companies in this competitive field. With time and improvement
of technology, it’s a matter of time to expect further development in supply
chain management.