A supply-chain is a group of suppliers who together produce a product or service. The first link in a supply-chain is often a business supplying a raw product or information to the next business in the chain that may then processes it. Eventually, the chain ends with a business selling the finished product or service to a consumer.
Supply-chains consist mostly of business-to-business (often referred to as B2B) supply and demand. Typically, supply-chains grow over time, there is turn-over in the participating businesses and each business has its own history of utilising technology and legacy systems. As a result, many supply-chains find that amongst participating businesses there are a number of computer systems, stock and inventory software, financial and logistics packages. Sometimes these packages can "talk" to each other but very often they are incompatible.
The Internet has much to offer in reducing costs of participating in supply-chains and in increasing customer satisfaction. The Internet is an open system such that all websites can "talk" to all other websites. This means that no matter what computer equipment, financial software or stock and inventory system are used by businesses in the supply-chain, if they have a Web interface, or are fully Web compatible, then cost savings through efficiencies are possible.
However, it is not just about the technology. To enjoy the gains, accounting, stock and inventory control procedures, dispatch and fulfilment practices will usually need to be re-examined.
What to do
Adopting an e-business approach to supply-chain management is a significant step to take. It often involves a range of changes in fundamental aspects of the business: technology, management practices, logistics, accounting, production schedules and information processing and sharing.
In planning the extent to which an e-business approach is appropriate for your business, and the extent of that approach, it is suggested you:
- talk to other businesses in your supply-chain, to technology and software providers and to industry advisors to gain an understanding of the opportunities and challenges
- consider what new supply-chain strategies are appropriate to your business and supply-chain and compare them with your business objectives
- consider what technologies and processes would require change in your business and how these may impact on, or be influenced by, suppliers and customers in the supply-chain
- consider future trends in technology, markets and customer expectations to ensure your plan is not outdated before it begins.
The findings from these activities should be incorporated into your e-business plan.
Related topic: Managing the supply-chain and logistics
e-businessguide Case Study - Seymour Street Newsagency (58 kb)
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