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
- 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.
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.