Lecture 3

Supply Chain Management &

E-Business
Supply Chain Management
• A supply chain is the network of all the individuals,
organizations, resources, activities and technology involved in
the creation and sale of a product, from the delivery of
source/raw materials from the supplier to the manufacturer,
through to its eventual delivery to the end user

• Supply Chain Management refers to the management of the

interconnected network of activities involved in the ultimate
delivery of goods and services to customers.
Information Flows in the SCM
• SC involves the flow of information, products and money between
the initial suppliers and final customers through different
organisations.
• It can be internal: involving intra-organisational functions (such as
sales and marketing, procurement, production planning,
warehouse and transport management),
• Or external: where the SC includes movements of material,
information and funds between companies and their suppliers,
customers and various business partners.
• In SCM therefore, the sharing of information is a critical success
factor
The Role of E-Business
• Managing flow of information in the supply chain is crucial because
the flow of materials and money is usually initiated by information
movements
• Poor management of information may lead to holding of excessive
levels of inventory to satisfy an unseen demand
• Hence integrating e-business with the supply chain, i.e. Supply Chain
Integration (SCI), facilitates accurate information sharing and offset
these effects, done at minimal cost aided by the internet
The Role of E-Business
• Companies integrate their SC through Electronic Data
Interchange (EDI) systems to link to their suppliers,
customers or partners through private value-added networks
• For example, airlines realised the need for efficient, quick,
inexpensive, and accurate handling of their inventory
information to communicate with travel agencies and other
customers and incorporated EDI in their ticketing &
reservation systems
The Role of E-Business
• The adoption of e-business can result in benefits such as:
• Facilitate collaboration and supply chain information sharing, such
as order forecasts and inventory planning;
• Automate requisition and purchase order creation and integrate
payment processes; and,
• Help organisations develop plans for the more effective
management of sourcing and logistics
Activities of the Supply Chain
• Major activities of the supply chain include:
• Marketing – creating brand/product awareness
• Procurement – acquisition of materials and services
• Logistics – services that ensure right and timely delivery
• Hence, in e-business sense, these activities are transformed
into:
• E-marketing
• E-procurement
• E-logistics
E-Marketing
• Marketing - “marketing is the activity, set of institutions and processes for
creating, communicating, delivering, and exchanging offers that have value
for customers, clients, partners, and society at large”.

• E-Marketing/Online Marketing/Digital Marketing/Internet Marketing/Web

Marketing: advertising and marketing the products or services of a business
over Internet

• Relies on websites or emails to reach users and facilitate the business

transactions. You can promote the products/services via websites, blogs,
email, social media, forums, mobile apps etc..
E-Marketing Methods/Ways
Search Engine Optimization
• It is the activity of optimizing web pages or complete website in order to
make them search engine friendly, thus getting higher position in the search
results. It contributes to overall rankings of the keywords through
influencing factors such as appropriate titles, meta descriptions, website
speed, links, etc.
Web Analytics
• Statistics on the activities of the website such as number of visits, number of
clicks, origins of visits etc. that help in identifying actionable insights on
monthly basis which can help to make favorable changes to the website
gradually.
E-Marketing Methods
Online Advertising
• It is placing crisp, simple, and tempting Ads on the websites to attract
the viewers’ attention and developing viewers’ interest in the product
or service.
Mobile Advertising
• It is creating awareness about the business and promoting it on smart
phones that people carry with them inseparably.
E-Marketing Methods
Social Media Marketing
• It includes creating profiles of your brand on social media platforms
such as Google Plus, LinkedIn, Pinterest, Twitter, Facebook, etc. It
assures that you remain connected to the existing or potential
customers, build awareness about the products and services, create
interest in and desire to buy your product, and interact with the
customers on their own terms and convenience.
E-Marketing Methods
Email Marketing
• You can interact with the customers to answer their queries
using automatic responders and enhance the customer experience
with your website.
• You can offer the options such as signing-in to subscribe to your
newsletter. You can make the emails catchy and crisp, so that they
don’t make recipients annoyed. Also, you can use selected best words
in the subject line to boost the open rate.
E-Marketing Methods
Blogs
• Blogs are web pages created by an individual or a group of individuals.
They are updated on a regular basis. You can write blogs for business
promotion.
Banners
• Small stripes of graphics containing links which take the visitor to
explore information about offers, product releases, etc. Banners can
appear on website, mobile Apps, blogs, or forums.
E-Procurement
• Using internet or intranet based information
systems software to coordinate the buying,
shipping, inventory management, supplier
selection, and approval process of business
acquisitions for the organization’s core activities
• There are 3 major activities in the purchasing
process – preliminary actions, buying actions &
concluding actions
 E-Procurement
Purchasing Process - Preliminary Actions
• Need/Specification Identification
• Supplier Selection
• Terms Negotiation
• Regulations (policies & practices)
Software Tools in Preliminary Actions helps to:
• Coordinate inventory management systems with purchasing systems.
• Coordinate new business ventures with purchasing systems.
• Create, manage and archive the list of needed items
• Maintain record of suppliers and their profiles, capabilities etc
• Maintain record of negotiated prices & terms
E-Procurement
Purchasing Process - Buying Process
• Purchase Order Delivery Process
• Purchase Order Receipt Process
• Order Accuracy
• Order Receipt
• Order Inspection
• Order Payment Process
E-Procurement
Software Tools in Buying Actions help to:
• Send purchase order directly to supplier
• Maintain real-time order status
• Record order delivery timing
• Records order accuracy
• Records order inspection data
• Submits payment request & manages payment approval process 
E-Procurement
Purchasing Process - Concluding Actions
• Order Record Storage & Organization
• Order Reviews
• Comparative Analysis

Software Tools in Concluding Actions helps to:

• Send electronic receipts to suppliers, archives, managers
• Maintain on-demand records for order reviews
• Facilitate comparative and costs analyses
E-Procurement
Benefits
• Streamlines procurement process
• Increases communication
• Eliminates non-value added personnel
• Reduces DEAD time
• Provides records & Produces reports
E-Logistics
Logistics
• “Logistics is that part of the supply chain process that
plans, implements, and controls the efficient, effective
flow and storage of goods, services, and related
information from the point-of-origin to the point-of-
consumption in order to meet customers’
requirements”
E-Logistics
• E-Logistics is a Dynamic set of communication,
computing and collaborative technologies that
transform key logistical processes to be customer
centric by sharing data , Knowledge and information
with Supply chain partners .
• Ultimate objective of E-Logistics is to deliver right
products in right quantities at right place and time to
the right Customer.
Processes involved in E-Logistics
1. Method of payment
2. Check product availability
3. Arrange shipments
4. Insurance
5. Replenishment
6. Contact with customers
7. Returns
Processes Involved in E-Logistics
1. Arrange Method of Payment
• Possible payment methods:
• At the time of order: e-payment e.g. PayPal, credit card
• At the time of delivery: Cash On Delivery (COD)
• For electronic payments, a system of verification of
payment is needed before shipping
Processes Involved in E-Logistics
2. Check Product Availability
• If possible, inform customer of availability before order is placed.
• If out of stock or the product will take time to manufacture, inform
customer of the delay.
3. Arrange Shipments
• Electronic shipping – quick and immediate
• Physical product – determine best shipping method for level of
service
• It is the biggest activity (labor, energy, money, etc.) for E-Logistics
Processes Involved in E-Logistics
4. Insurance
• This option needs to be available for customers since product can
be lost or damaged in the shipping process.
5. Replenishment
• This is an overview step. It should be examining all aspects of
physical inventory at a location and reordering as needed:
• Product – product sitting on shelves or material to manufacture product
• Non-product – shipping materials, parts for machines in process, items
that are part of the shipping process (scanners, carts, etc.)
Processes Involved in E-Logistics
6. Contact with Customer
• With an invisible process (back-door operations), the customer
needs to be informed as much as possible.
• Most common types of communication:
• Order confirmation
• Payment success
• Shipping confirmation
• Tracking information
• Any problems in the process
Processes Involved in E-Logistics
7. Returns
• The flow of product from customer back to the vendor is called
reverse logistics.
• Possible reasons for customers to return or exchange product:
• Damaged
• Doesn’t work
• Don’t like it
• Wrong product/type/color