International Journal of Mechanical Engineering and Technology (IJMET)

Volume 8, Issue 1, January 2017, pp. 235240, Article ID: IJMET_08_01_025

Available online at http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=8&IType=1
ISSN Print: 0976-6340 and ISSN Online: 0976-6359
IAEME Publication

EVOLUTION OF SUPPLY CHAIN MANAGEMENT

WITH EMERGING TECHNOLOGIES
Jeetesh Singh
B.Tech Mechanical, VIT University, Vellore, India

Dr. J. Raghuram
Associate Professor, VIT University, Vellore, India

ABSTRACT
This paper focuses on the emerging trends in the supply chain management with the emerging
I.T. services over the last few years. Supply chain management has emerged over the years for
creating an integrated relationship between the suppliers, manufacturer, distributor and customers.
Development in the supply chain management sector has created a competitive environment
between the industries. So in order to compete in this environment industry need to have complete
knowledge in the emerging technologies in the supply chain management. We are going to discuss
the broader aspects of supply chain management and how the I.T. services have paved a way of
opportunity by enhancing the customer services and giving a competitive edge.
Key words: Supply chain management, vendor management, technology, 3D printing and
information technology.
Cite this Article: Jeetesh Singh and Dr. J. Raghuram. Evolution of Supply Chain Management
with Emerging Technologies. International Journal of Mechanical Engineering and Technology,
8(1), 2017, pp. 235240.
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=8&IType=1

1. INTRODUCTION
Supply chain management is the management of the interconnected and dependent businesses that provide
endurance and ultimate provision to the products and services required by the customers. It is a key aspect
in the efficient working of the movement of goods in the distribution channel from suppliers to the end
customers. Supply chain management is one of the major issues in the rapid growth of multinational
corporations and global expansion. Supply chain management in a well functioning society creates jobs,
decreases pollution, energy usage and increases the standard of living. SCM involves bi-directional flow of
inventory management, information and cash flow.
Supply chain management is defined as the integration of key business processes from end user going
through original suppliers that provides services, products, and information and hence adds value for
customers and other stakeholders (Lambert et al., 1998).
SCM refers to the practices and processes aiming for effective and efficient flow of information, data
and products between a company and its immediate suppliers and customers. (e.g. Frohlich and
Westbrook, 2001).

http://www.iaeme.com/IJMET/index.asp 235 editor@iaeme.com

 Jeetesh Singh and Dr. J. Raghuram

With the emergence of the technology over the past years has led to continuous up gradation of supply
chain management with new trends. Now the companies are investing greater resources in their supply
chain and supply chain managers in order to have brightest minds working for them. As these managers are
the ones that are continuously investigating any shortcoming or discrepancy in the supply chain, which is
important nowadays in the highly competitive environment, where the performance of the supply chain
could give competitive edge over others. So the companies need to continuously introduce new inventions
in their supply chain and update their employees skills.

2. OBJECTIVES
Reducing the lead-time from the source to the consumer by treating the supply chain as a whole and not
fragmented.
Sharing of information so that it is available and visible at subsequent levels of the chain and also creating a
single point of contact for data.
To compare the traditional supply chain with todays modern supply chain.

3. LITERATURE REVIEW
Following papers have showed that how sharing of data have been helpful in suppliers order quantity
decisions and inventory management.
Gavirneni et al. (1999), Lee et al. (2000) and Aviv and Federgruen (1998) used shared information for
improving the order quantity of suppliers decisions with a known demand process which is autoregressive
in a serial system. Liljenberg (1996) studies showed that shared information can be used to improve the
allocation of suppliers inventory among the retailers. Liljenberg (1996) also finds that supply chain costs
could be lowered by 3.9% to 0% by better allocation.
Also there are other research works related to our work. Lee et al. (1997) found that sharing
information could reduce the demand variance of suppliers, which benefits the supply chain.

4. TRADITIONAL POLICIES
The question that remains is for the policy of suppliers to allocate the priority to deliver the goods or
service when the inventory is insufficient to cover all the orders in a specific timeframe. Let us assume that
the supplier considers a priority to make the delivery allocations. Over a specific period of time the
supplier assigns a priority for each batch.
Case 1:
The supplier considers various factors while deciding the priority of each order, in case 1, we consider
priority on the basis of:
Balance of payments of the customer.
Past relationships with the customer.
Duration of relationship with the customer.
Mode of payment.

Case 2:
In this scenario the supplier follows the first come first serve basis, in which the supplier serves the
customer who places the first order.

Case 3:
In some cases the suppliers honor the orders made by the customers on the basis of:

http://www.iaeme.com/IJMET/index.asp 236 editor@iaeme.com

 Evolution of Supply Chain Management with Emerging Technologies

Size of order: here the supplier determines the size of the order and either supplies the small orders first of
the big orders first based on the company policy.
Cost of order: in this scenario the supplier decides to honor the orders of high value first.

4.1. Warehousing
Warehouse management is a traditional stock maintaining process where some of the major operations
include receipt of goods, allocation of storing locations, keeping a track of storage locations, restocking at
picking locations, order picking, assembling and stock rotation. The concept of warehousing has come a
long ways from just being just a storage unit of inventory to the way businesses save money.
Earlier when a product was dropped off at a warehouse it used to be manually entered into the records
and taken to its holding location by man or by use of manual machinery and when retrieving the goods its
manually recorded.
This caused a lot of time delay and once the stock increased, stock rotation became difficult.
In modern days with the help of technology like conveyer belts, automated guided systems and
automated storage and retrieval systems warehousing has become an easier task and has reduced the time
lag that was there earlier and makes stock rotation easier.

4.2. Transportation Management

Transportation and delivery is a tricky topic when it comes to manufacturing industries. Transportation
provides more visibility to shipments and orders.
The reason it is tricky is because companies are in a dilemma whether to have an in-house
transportation division or to outsource it.
Earlier the cost of transportation management was very expensive and tiresome due to the following
reasons:
Maintaining the vehicles
Maintaining spares
Preventing theft from the vehicles
Mid-travel breakdown
Drivers detouring
Disadvantages of outsourcing:
Expensive
Fixed routes
No flexibility
Over the years various technologies have come up supporting the on-house transportation system.
Modern day truck are fixed with RFID transponders so that the truck can be monitored at all times,
companies now have tie ups with fuel station companies in order to provide maintenance and service to
trucks throughout the region.
The same goes with large multinational corporations for air transport and shipping.
Now companies are able to track and locate each package as it is electronically coded uniquely and this
has made transport and delivery easier and cheaper.

http://www.iaeme.com/IJMET/index.asp 237 editor@iaeme.com

 Jeetesh Singh and Dr. J. Raghuram

5. MODERN TECHNOLOGY TOOLS FOR SUPPLY CHAIN MANAGEMENT

5.1. Electronic Data Interchange (EDI)
Electronic data interchange has been widely used by firms in supply chains for exchanging information
and transaction processing. Firms exchange important information necessary to make their businesses run
efficiently.
EDI has proved effective in providing efficient and accurate information about their product sales. This
mode of information transfer has made supply chain management much simpler and faster in various fields
like online payments, tracking shipments from both ends and electronic point of sale (EPOS). Also it is
utilized in providing bills of material, accounts data, balance of payments and trading.
Major benefits of EDI include increase in productivity, reduced paper work, accurate tracing of
materials, better customer tracing and cost effective. Also EDI helps in reducing the false calls or
deviations in the supply and demand information which results in accuracy of actual supply and demand
information.

5.2. Bar code Scanning

The series of numbers or codes which represent the product details and can be read easily with the help of
machines called bar code scanner are referred as bar codes. These codes comprises of lines of various
widths arranged in either horizontal or vertical manner, horizontal order called ladder orientation and
vertical order called picket fence orientation. These help in speeding up the operational process i.e. a
product with bar code is easily associated with the bar-code stock in the warehouse and the stock can be
easily organized and identified and hence the stock record gets updated upon any further dispatching or
receiving of products.
It is mostly used by the super markets and hyper markets. As during the process of billing the bar code
is scanned from the product which reduces the complexity of billing and time also the inventory of the
product gets updated at the point of sales and this data could be easily read by their IT department of their
headquarters and maintain the availability of product in the inventory.

5.3. Radio Frequency Identification (RFID)

RFID is meant to provide information regarding when was the product produced, and when the items were
produced and expiry of the products. Also they offer broader series of advantages as they store more data
than bar codes, provide real time data and could be scanned from a distance. A RFID reader uses radio
frequency signals from the RFID tag to read information.
RFID is used to reduce the operating costs by tracking inventories within the supply chain to the level
of the products thus helpful in better forecasts and planning. Also the quantity of the products in the
inventory can be controlled by the supplier thus reducing the product losses and increasing revenues. Also
the data transmitted by the tag provide identification and location information and specifications of the
products like price, colour, date of purchase etc.
RFID technology has been widely used in a range of industries, including retail, manufacturing and
also in the public sector industries. Companies like Harley Davidson and Toyota use RFID for tracking
parts of their bikes and automobiles. Scottish Courage Brewing ltd, invested heavily in RFID technology
as it helped them in significantly reducing keg losses and efficient delivery process.
RFID technology is being used by Walmart for almost about a decade and cited many useful benefits,
resulting in more efficient inventory management. The company started using RFID to track pallets of their
merchandise travelling along the supply chain including those at warehouses. This resulted in cutting
excess inventory in walmarts supply chain and also bringing down out-of-stock occurrences by one-third.
Also many airports tag baggages to improve loading procedures and ease of tracking them.

http://www.iaeme.com/IJMET/index.asp 238 editor@iaeme.com

 Evolution of Supply Chain Management with Emerging Technologies

5.4. E-Commerce
Electronic commerce consists of wide range of tools and techniques used to conduct business in a
paperless manner. E-commerce includes shared database, magnetic/optical data capture, electronic
publishing, electronic data interchange, electronic fund transfer, electronic publishing and buying and
selling of products. It enables the movement of documents electronically between suppliers and consumers
through automation done by companies. System provides access to consumers all over the world thus
removing geographical limitations.

Some applications of e-commerce Include

Auctions: Many websites hold or run conventional auctions. In this a product is placed online for bidding
and highest bidder buys the product. Many government agencies follow e-auctioning so as to eliminate
corruption and other middle men leading to transparency of process. Also many websites help in selling of
products from one customer to another in which customer can place his/her advertisement for the product
and sell by auctioning.
In Manufacturing: E-commerce has helped companies to form an electronic exchange by providing trade
market information and run back office information such as inventory control. This led to speeding of the
process of flow of raw materials and finished goods between the members of the supply chain. Also many
companies fear that they could lose trade secrets by involving in mass electronic trade exchanges.
Finance: Many financial companies and banks are using electronic commerce to a large extent. Customers
can now check their balance of savings and credit accounts also they can transfer money to another account
and make payment of their bills through on-line banking or e-banking. Also nowadays stock market gives
the option of online stock trading.
Retail and wholesale: E retailing has led to online retails of goods and services from business to consumers
through electronic stores that have electronic catalogues. Websites like flipkart and snapdeal act as one stop
online stores that offer many different products and services.

5.5. 3D Printing
3D printing devices can make items that required huge assembly lines without much complexity. Advances
in softwares and scanners have helped in designing and creating parts that required factories to build. 3D
printed products use advanced materials that have high strength and longer lasting. This process eliminates
repetitive production tasks so the workers would need higher level of skills to make more sophisticated
goods. Supply chain can also be affected from 3D printing. Manufacturing lead times could be reduced
substantially to minutes. New designs could reach markets in shorter times. Customers demand could be
met more easily and quickly than ever before. Loss of material would be very minimal as the leftovers
could be used in the production of next batch of products. Logistics will adjust to just-in-time and print-on-
demand that will lead to less need of inventory.

6. CONCLUSION
By the various methods discussed above we succeed in reducing the lead-time from the source to the
consumer by treating the supply chain as a whole.
The above paper also highlights the method of sharing of information so that it is available and visible
at subsequent levels of the chain and also creating a single point of contact for data. We also compared the
traditional supply chain management with todays modern day supply chain management on the basis of
how the transfer of information has changed, costing and transportation of goods.

http://www.iaeme.com/IJMET/index.asp 239 editor@iaeme.com

 Jeetesh Singh and Dr. J. Raghuram

REFERENCES
[1] Anderson, David L., Britt. Frank E., and Favre. Donavon J (1997), The seven principles of Supply
Chain Management, Logistics Management, Supply Chain Management Review, April 1997
[2] Auramo, Jaana,; Jouni Kauremaa and Kari Tanskanen (2005). Benefits of IT in Supply Chain
Management: An explorative study of progressive companies, International Journal of Physical
Distribution and Logistics Management 2005; 35,2; Academic Research Library pg. 82
[3] Prashant R.Nair, Venkitaswamy Raju, Anbudayashankar S P. Overview of Information Technology
tools for Supply Chain Management
[4] Harland, C.M. (1996), "Supply chain management: relationships, chains, and networks", British Journal
of Management, Vol. 7 pp.S63-S80.
[5] Rushton A., Oxley J. and Croucher P. (2000), IT in the supply chain.The Handbook of Logistics and
Distribution Management. Great Britain: Bell & Bain Ltd, Glasgow.
[6] Sammon, David and Paul Hanley (2007), Case Study: Becoming a 100 per cent e-corporation: benefits
of pursuing an e-supply chain strategy, Supply Chain Management: Volume 12 Number 4 2007
297303
[7] Gunasekaran, E.W.T. Ngai (2003), Information systems in supply chain integration and
management. European Journal of Operational Research 159 (2004) 269295
[8] Simon Croom, Pietro Romano, Mihalis Giannakis (2000), Supply chain management: an analytical
framework for critical literature review. European Journal of Purchasing & Supply Management 6
(2000) 67}83
[9] Ala-Risku, T., Krkkinen, M. and Holmstrm, J. (2003), Evaluating the applicability of merge-in-
transit: A step by step process for supply chain managers, International Journal of Logistics
Management, Vol. 14, No. 2, pp. 67-81.
[10] Auramo, J., Kauremaa, J. and Tanskanen, K. (2005), Benefits of IT in supply chain
[11] management an explorative study of progressive companies, International Journal of Physical
Distribution & Logistics Management, Vol. 35, No. 2, pp. 82-100.
[12] S. A. Puviyarasu, A Review of Green Supply Chain Management. International Journal of Mechanical
Engineering and Technology, 7(5), 2016, pp. 388397.
[13] Disney, S., Naim, M.M. and Potter, A. (2004), Assessing the impact of e-business on supply chain
dynamics, International Journal of Production Economics, Vol. 89, No. 2, pp. 109-118.
[14] Kemppainen, K. and Vepslinen, A.P.J. (2003), Trends in industrial supply chains and networks,
International Journal of Physical Distribution & Logistics Management, Vol. 33, No. 8, pp. 701-719.
[15] McLaren, T.S., Head, M.M. and Yuan, Y. (2004), Supply chain management information systems
capabilities: an exploratory study of electronics manufacturers, Information Systems an e-Business
Management, Vol. 2, pp. 207-222.
[16] Ajay Verma and Dr. Anshul Gangele, Green Supply Chain Management Empirical Study for Closing
the Loop , International Journal of Production Technology an d Management (IJPTM) , 3(1), 2013, pp.
7894.
[17] Yu, Z., Yan, H. and Cheng, T.C.E (2001), Modelling the benefits of information sharing based
partnerships on a two-level supply chain, Journal of the Operational Research Society, Vol. 53, No. 4,
pp. 436-446.

http://www.iaeme.com/IJMET/index.asp 240 editor@iaeme.com