E-Supply Chain

Management

M A D E B Y: - A B H I S H E K S I N G H
NIKHIL DUBEY
ASHUTOSH JHA
S O U M YA D U B E Y
 Introduction
Supply chain management (SCM) is a network of entities that encompasses every effort
involved in producing and delivering a final product, from the supplier’s supplier to the
customer’s customer. A key principle is that all strategies, decisions, and measurements are made
considering their effect on the entire supply chain, not just individual functions or organizations.

The Internet allows companies to interact with customers, and collect enormous volumes of
data and manipulate it in many different ways to bring out otherwise unforeseen areas of
knowledge.

The term ‘electronic supply chain management’ can be stated as “natural combining of supply
chain and e-commerce.”
 E-SCM general representation: Input,
output, mechanism, and control
1. The three constituents e-network, customer responses, and
technology could be seen as the “input” into eSCM working
together to achieve the ultimate aim (output) of the supply
chain that is, customer satisfaction.

2. Evans and Lindsay (2002) show direct correlation between

employees’ (people) satisfaction and customer satisfaction,
and argue that ‘people’ are the only organization asset that
“competitors cannot copy; and the only one that can
synergize, that is, produce output whose value is greater than
the sum of its parts.”

3. The mechanism that converts the input of the e-SCM

environment to its output (i.e., customer satisfaction)
includes three constituents: process, people, and information
sharing.
 The mechanism of e-SCM that is, leveraging processes, information, and
people cannot be achieved without the improvement of the processes and
enhancing the learning of employees through- out the entire supply chain.
This in turn requires process mapping and standardizing the supply chain
processes. These three elements process mapping, standardization, and
improvement and
learning form the control part of e-SCM that is capable of leveraging the
supply chain process, information, and people in order to convert the input
into e-SCM ultimate output: the customer satisfaction.
ESCM-I Procedure
 SCOR Reference Model

The supply chain operations reference (SCOR) model is an industry standard approach to
define, design, and improve supply chains (Stewart, 1997). The Supply Chain Council has
developed and endorsed the SCOR model as the cross-industry standard for supply chain
management.
 SCOR focuses on five basic management
processes in the supply chain as illustrated in
Figure . These processes are plan, source, make,
deliver, and return.

There are four levels of details in SCOR:-

• Level 1: Provides a broad definition of the

plan, source, make, delivery, and return
process types, and is the point at which a
company establishes its supply chain com-
petitive objectives.

• Level 2: Defines 26 core process categories

that are possible components of a supply
chain. A company can configure both its
actual and ideal supply chain by selecting
from these core processes.

Level 3: Provides a company with the information it needs to plan and set goals successfully for its supply
chain improvements through detailed practices, and
system software capabilities to enable best practices.

Level 4: Focuses on implementation, when companies put specific supply chain improvements into play. Since
changes at level 4 are unique to each company, the specific elements of the level are not defined within the
industry standard model.
 Optimal Transshipment Rule
For any given inventory positions S1, S2 ,...,Sn, let T(S1 , S2 ,...,Sn) denote the
minimum cost to deliver all units until the selling period ends. Although the
market demand is dynamic and uncertain, it follows a Poisson distribution with
rate λ= 1ni=∑λj. So the probability that the next unit demand comes from
market j is λ j /λ. Hence, we can build the following dynamic program.
Heuristic Transshipment Rules
 Supply chain management matrix

•It presents an illustration of several components of SCM.

•Rows in this matrix correspond to three different levels of management (design, planning,
and operations), while the columns list business processes concerned with supply,
production, and demand
 Benefits of SCM:
Eliminate delays and errors associated with traditional paper-based systems.
Improve customer satisfaction (fewer stockouts, paperwork savings).
Reduce supply chain costs
Improve record accuracy
Lower data entry costs (single point of entry)
Reduce inventory holdings (shorter lead times)
Increase inventory turns
Increase quality
 E-business application
architecture
The application architecture defines how well information is managed in supply
chain or network.
E-business architecture is about how to integrate an intricate set of applications
so they work together to manage, organize, route, and transform information.
It is needed to implement strategy to make supply chains and networks more
competitive.

• How different application clusters are integrated to form a e-business model of

the organisation?
E-business application architecture
 Challenges of SCM

Visibility: Since Supply chain management is robust which involves multiple suppliers and manufacturers
at each stage. It is difficult to have the visibility at each point where goods move from one point to
another.
Operating Costs: The operating costs and risks in the business are increasing and cost cutting is given top
priority by firms globally.
Technology and Lack of information transfer: The lack of information transfer between various stages of
supply chain hampers the business and can increase the lead and delivery times.
Manufacturing Cost: The lack of coordination among the manufacturing and production will increase
supply chain cost. Companies today anticipate more demand for their products and hence the distribution,
transportation and inventory holding costs will increase.
Inventory Cost: Inventory is considered to be the excess cost in terms of holding the inventory, stocking
the products in the warehouse, managing the damages and visibility of the products when needed
Service Models

 Customer behavior models, incorporating dynamic models of customer retention (like loyalty), stochastic
models of customer behavior (like satisfaction), and customer behavior models (like churn rate or a customer
lost through a single service encounter). •
 Service Quality impact models, incorporating aggregate models (like customer satisfaction effects) and
disaggregated models (like financial impacts of a service component). •
 Normative service models, housing organizationally focused marketing models (like incentive schemes and
trade-offs between satisfaction and productivity) and operations models (like queuing).
 The Value Chain
Business value = (Benefits of each delivered value chain activity minus its cost) + (Benefits of each
service interface between value chain activity minus its cost).
Customer value = (Benefits of each customer service interface interaction) + (Benefits of each
added value business offering) + (Benefit perceived for the cost involved)
Benefits of Modern value chain over Traditional:

Traditional supply chain focuses only on production and provision, whereas Modern
(digital) supply chain focuses on the needs of the customers in general, also aims to
improve the value of the product delivered to the customer, rather than just focusing on
the aspect of distribution.
The modern (digital) supply chain allows any business organization to experience the
value in creating a partnership, whereas the traditional supply chain allows listed
companies to follow a single pathway.
The organizations operating under the modern (digital) supply chain create value for the
final customer's product. In contrast, the traditional supply chain has no such strategies
to improve the finished product's value
The modern (digital) supply chain focuses more on building partnerships, alliances, and
collaborations. With improved relationships with the suppliers, companies can build
trust leading to long-term relationships.
Service Value Networks
Service value networks provide a new business model and paradigm for service
delivery systems. They reconcile two competing but simultaneous consumer
requirements: leveraging economies of scale (from a diverse block of data
storage) and the ability to deliver more customized solutions.

The service value network pathway is driven by:

1. Business are increasingly looking for 'easy-to-implement' and 'value-proven' vertical
or process-specific solutions, rather than generic 'capability-based' technical help.
2. The pursuit of core competencies and competitive advantage.
3. The need for holistic solutions—encouraging collaboration across service value chains
and trying to meet client requests.
4. A desire to achieve long-term (or more sustainable) competitive positioning
Service Value Networks Framework
The service value network framework provides a topology approach from which the business's operational,
service, and customer strategies are drawn together as interconnected data-sharing models that deliver
unique customer service interactions. This business system learns from its customer interactions (by storing
and analyzing customer data) and improves its service database offerings by developing new improved,
upstream supply-side customer-driven solutions and housing these information sources in preparation for
additional, or even more specific, customer interactions.

The framework meshes with different

components like:

External services

Internal services

Customer-targeted component

Service concept

Operations concept
 Virtual service value network framework
The company's website contains a variety of 'touch-points' for customers. There
are various performance and value-effector blocks at these client encounter
points. The virtual service value network framework displays them. This e-service
encounter setting contains various potential virtual customer service-related flaws
as well as several research points, which are:
• Amplification effects
• E-services
• The web interface
• Value chain modeling
• Customer Targeting
• Information communication
technologies
• Bottleneck effects
• Business strategies
Business-Customer Encounter
The business-customer encounter now defined as a key to delivering individually required
services to the individual customer may be further modeled by considering the
information blocks contributing to the actual encounter. Three main service dimensional
blocks exist within the virtual service value encounter.
These are the business-related
upstream strategic dimensions, the
performance encounter dimensions,
and the downstream customer
demanded value dimensions.
Each block comes under the
influence of the fourth block
the external environment.
Various managerial dimensions in relation to this service encounter are defined from
the virtual service network encounter model. These are:
The Strategy Dimensions: Investment Dimensions, Revenue Generation Dimensions, Customer
Targeting Dimensions, Senior Management Dimensions, Competitive Positioning Dimensions,
Service Offerings Dimensions, IT, Operations, and Communication Dimensions, Virtual Service
Encounter Dimensions, Web Site Service Dimensions, Customer Targeted Concept Dimensions and
few more.

The Customer: E-Business customers, External end-user customers, Physical service encounters.
The Environment: The business is surrounded by and influenced by its environmental
uncertainty. This uncertainty arises from a range of areas including demand uncertainty,
competitor irregularities, forecasting errors, bandwagon effects, technology innovation and
change, and the like. Internal business pressures arise from supply uncertainty, production
uncertainty, technical uncertainty, and new product/service uncertainty.
THAN
K
YOU!