Members

 Ramsha
 Hira Rehman
 Sitara Tanveer
 Bilal Tahir
 Raheem Tariq
 Awais Sajid Butt
 Usman Naeem
Chapter 4
E-COMMERCE AND SUPPLY CHAIN MANAGEMENT
Supply Chain & Supply Chain Management

 A supply chain is a network between a company and its suppliers to

produce and distribute a specific product to the final buyer. This network
includes different activities, people, entities, information, and resources.

 Supply-chain management is the designing, planning, execution,

controlling and monitoring of the flow of goods and services, involves the
movement and storage of raw materials, work-in-process inventory, and
of finished goods from point of origin to point of consumption.
Major Issues Affecting SCM

 Information technology: it involve internet, web, intranet, extranet, bar

code information.
 E-commerce: sale and purchase on internet. it involve b2b , b2c.
Components of SC for a Manufacturer

External supplier Internal functions External distributor

Who provide raw material Operating functions Who transport finished goods to
end users
• Tier one • Processing
• Logistic management
• Tier two • Purchasing
• Traffic management
• Tier three • Planning
• Distribution management
• Quality
• Shipping
Expansion & Contraction of Supply
Chain

 Due to PESTLE analysis because supply chain operates in dynamic

environment
 Due to complexity of Product or Service itself
 It also depend on SWOT analysis
 Traditional Supply Chain Flow

 Traditional supply chain is a "system whose

constituent parts include material
suppliers, production facilities, distribution
services and customers linked together by
the feed forward flow of materials and
feedback flow of information“ and also
known as open loop or forward supply
chain.
Value Addition & Value Creation

 Value addition is about activities that  Created value is original and unique
enables the product or services to be to the one buyer it suites.
more desirable by the customers
 Manufacturer create value according
 It has nothing to do with prices and to the customer’s feedback
cost of production
 Like tailor made products
 Value addition is linked with whole
supply chain
 Bullwhip Effect

 The bullwhip effect can be explained as

an occurrence detected by the supply
chain where orders sent to the
manufacturer and supplier create larger
variance then the sales to the end
customer. These irregular orders in the
lower part of the supply chain develop to
be more distinct higher up in the supply
chain. This variance can interrupt the
smoothness of the supply chain process as
each link in the supply chain will over or
underestimate the product demand
resulting in exaggerated fluctuations.
Causes / Factors

 Disorganization
 Lack of Communication
 Technology
 Price Fluctuation
 Batch ordering
Contracting the Effect

 Share Accurate Information

 Forecast Product Demand
 Maintain Price
 Provide Right Information For Batch Production
 Example

 Customer want 8 goods from retailor and

retailor ordered to distributor for 20 goods
and distributor ordered to manufacturer
for 40 goods
Type of E-business

 B2B (business to business)

 Business-to-business is a situation where one business makes a commercial
transaction with another. This typically occurs when: A business is sourcing
materials for their production process for output.
 On the internet it is also known as e-biz
 Example- Providing raw material to the other company that will produce
output
Type of E-business

 B2C ( business to customer)

 The term business-to-consumer (B2C) refers to the process of selling
products and services directly between consumers who are the end-users
of its products or services.
 Most companies that sell directly to consumers can be referred to as B2C
companies.
 For example, someone buying a television set from an electronics retailer
would be a B2C transaction
Role of Purchasing

The role of purchasing in SCM is responsible for:

 Selecting suppliers
 Negotiating and administrating long-term contracts
 Monitoring supplier performance
 Placing order to supplier
 Developing a responsible supplier base
 Maintaining good supplier relations
Green Supply Chain Management

 Green supply chain management can be defined as integrating

environmental thinking into supply-chain management, including product
design, material sourcing and selection, manufacturing processes,
delivery of the final product as well as end-of-life management of the
product after its useful life.
 Example: The idea is to eliminate or minimize waste in the form of energy,
emission, chemical, hazardous solid waste etc. along the supply chain.
Sourcing
Out-sourcing
 Outsourcing the supply chain
management helps in minimizing
overall cost, focus on its core
competencies, meet customer
demands more effectively and avail
greater flexibility in maintaining and
operating its supply chain.
In-sourcing
 Encompasses any work assigned to an
individual, team , department or other
groups within the organization. It save
time and cost and also satisfied the
customer
Insourcing

Advantage Disadvantage
 Competitive advantage  Cost
 Trade secret  Capabilities
 Organizational culture  Focus
 Cost
 Direction & control
Outsourcing
Advantages
 Reduce operational cost
 Reduce recruitment cost
 Things get done fast
 Get piece of mind
Disadvantages
 Risk leaking of confidential data
 Reduce quality control
 Lose some control
Sourcing Issues

 Which products to produce in house and which are provided by other

supply chain member
 Vertical integration
A measure of how much of the supply chain is actually owned or operated
by the manufacturing company.
 Insource
Processes or activities that are completed in-house.
 Outsource
Processes or activities that are completed by suppliers.