E-SUPPLY CHAIN

MANAGEMENT
BY PROF F. CHOGA
WHAT IS E-SUPPLY CHAIN
MANAGEMENT?
• INTEGRATED MANAGEMENT APPOROACH FOR PLANNING AND
CONTROLLING THE FLOW OF MATERIALS FROM SUPPLIERS TO END
USERS USING INTERNET TECHNOLOGIES
• REFERS TO THE COMPLEX NETWORK OF RELATIONS THAT
ORGANISATIONS MAINTAIN WITH TRADING PARTNERS TO SOURCE,
MANUFACTURE AND DELIVER PRODUCTS
E-SUPPLY CHAIN BENEFITS
• WHAT ARE THE BENEFITS?
E-SUPPLY CHAIN BENEFITS
IMPORTANT BENEFITS OF E-SUPPLY CHAIN MANAGEMENT :

• REDUCED INVENTORY AND OVERHEAD COSTS

• SHIPPING OPTIMISATION

• BETTER QUALITY CONTROL

• BETTER COLLABORATION WITH SUPPLIERS

• IMPROVED RISK MITIGATION

• STRONGER CASH FLOW

• A MORE AGILE BUSINESS

• BETTER VISIBILITY AND DATA ANALYTICS

REDUCED INVENTORY AND OVERHEAD COSTS

• REDUCE THE NEED TO MAINTAIN INVENTORY, THEREFORE CUTTING OVERHEAD

COSTS ASSOCIATED WITH STORAGE AND SECURITY.
• IMPROVING CASH FLOW IS A COMMON STICKING POINT FOR MANY SUPPLY CHAINS.

• ESCM SOFTWARE BENEFITS INCLUDE STRONG ACCOUNTING FEATURES THAT CAN

HELP WORK OUT IN THESE PROCESSES.

• AUTOMATING MANUAL TASKS NOT ONLY HELPS SAVE MONEY ON THE FLOOR OF A
WAREHOUSE BUT ALSO IN THE ACCOUNTING OFFICE.
REDUCED INVENTORY (CONTINUED)
• REMOVING TEDIOUS MANUAL ENTRY OF IMPORTANT
ACCOUNTING INFORMATION CAN LEAD TO FEWER
ERRORS AND MORE ACCURATE BILLING PRACTICES.
• RATHER THAN HAVING TO STOCK LARGE VOLUMES OF
INCOMING SUPPLIES IN A WAREHOUSE, MANAGERS CAN
CRAFT PRECISE SUPPLY SCHEDULES AND CUT BACK ON
STORING AN EXCESS OF UNNEEDED INVENTORY.
• HAVING ENOUGH INVENTORY TO MEET DEMAND IS
CRITICAL, HAVING TOO MUCH INVENTORY DEVOURS
VALUABLE WAREHOUSE SPACE AND USES RESOURCES
TO HOLD.
SHIPPING OPTIMISATION

• LOGISTICS COSTS ARE SET TO RISE SIGNIFICANTLY, POTENTIALLY IMPACTING

SMALL BUSINESSES
• REDUCING THE NUMBER OF SEPARATE DISTRIBUTION CHANNELS AND MAKING
USE OF LOGISTICS SPECIALISTS COULD REDUCE YOUR DISTRIBUTION COSTS
RELATIVE TO YOUR COMPETITORS
• HELPING YOU TO MAINTAIN STRONGER CASH FLOW AND PROFITS.
• HAVING TOO MANY SUPPLIERS WITH INDEPENDENT SHIPPING AND DELIVERY
STREAMS HAS BEEN THE BIGGEST SOURCE OF INEFFICIENCY
• ADDRESSED BY RESPONDING BY LOOKING AT STORAGE AND SHIPPING
AGGREGATORS.
BETTER QUALITY CONTROL

• WHEN YOU AND YOUR SUPPLIERS ARE WORKING TO THE SAME STANDARDS,
QUALITY CONTROL PROBLEMS CAN BE DETECTED EARLIER.
• EMPHASISING THE BENEFITS OF TRUST IN SUPPLIER RELATIONSHIPSTHE
CONVERSATION IS ONLY ABLE TO HAPPEN BECAUSE YOU ARE ON THE SAME
PAGE.
BETTER COLLABORATION WITH SUPPLIERS

• ESCM SYSTEMS CONTAIN ALL OF THE TOOLS AND FEATURES NECESSARY TO

STRENGTHEN THE FLOWS OF INFORMATION, MATERIALS AND PRODUCTS ACROSS A
SUPPLY CHAIN.
• FROM COMMUNICATION ENABLING FEATURES LIKE CHAT CAPABILITIES AND REAL-
TIME SHIPPING NOTIFICATIONS TO ANALYTICAL TOOLS THAT GIVE MANAGERS
CRITICAL DATA, SCM SYSTEMS HAVE THEM ALL
• SUPPLY CHAINS ARE ALL ABOUT FLOW. PUT SIMPLY, SUPPLY CHAINS ARE ALWAYS
CHASING AFTER SHORTER TIMES BETWEEN MANUFACTURING A PRODUCT AND
GETTING IT OUT TO THE CUSTOMER THAT ORDERED IT.
• MANY SUPPLY CHAIN MANAGEMENT SYSTEMS CONTAIN FEATURES THAT ALLOW
USERS TO COMPARE SUPPLIER COSTS AND SUPPORT STRUCTURES.
• THESE OPERATIONAL BENEFITS ALLOW SUPPLY CHAIN MANAGERS TO MAKE
MEANINGFUL CHOICES ON WHICH SUPPLIERS TO FORM PARTNERSHIPS WITH.
IMPROVED RISK MITIGATION

• . E-SUPPLY CHAIN MANAGEMENT, OFFERS VISIBILITY OF THE SUPPLY CHAIN

FROM END-TO-END.

• FOR THIS REASON, AROUND 50% OF SUPPLY CHAIN LEADERS OWN ALL OF THE
SIX "LINKS" FREQUENTLY ASSOCIATED WITH SUPPLY CHAIN MANAGEMENT:
• PRODUCT DEVELOPMENT;
• DEMAND PLANNING;
• SUPPLY PLANNING;
• SOURCING AND PROCUREMENT;
• MANUFACTURING; AND
• LOGISTICS AND DISTRIBUTION
STRONGER CASH FLOW

• RUNNING AN EFFICIENT SUPPLY CHAIN THAT IS BASED ON GOOD SUPPLIER

RELATIONSHIPS, MAINTAINS STRICT QUALITY AND STOCK CONTROL,
• KEEPS A WATCHFUL EYE ON COSTS AND PRICES CAN GREATLY BENEFIT A
BUSINESS’S LIQUIDITY BY IMPROVING CASH FLOW
A MORE AGILE BUSINESS

• A GOOD SUPPLY CHAIN ENABLES US TO ADAPT TO OPPORTUNITIES,

• IF YOU HAVE GOT GOOD SUPPLIERS, THEY CAN HELP YOU UNLOCK NEW
OPPORTUNITIES.

• IT’S WORTH INVESTING MORE UP-FRONT TO ENSURE THAT THE SUPPLIERS

YOU HAVE IN PLACE ARE ABLE TO SCALE UP AS YOUR BUSINESS GROWS.
BETTER VISIBILITY AND DATA ANALYTICS

• BUSINESS MANAGERS CAN KEEP IN CONSTANT TOUCH WITH SUPPLIERS

USING MOBILE PHONE APPS, CONFERENCING PLATFORMS AND SHARED
DASHBOARDS.
• SOFTWARE TOOLS CAN ALSO HELP TO MANAGE STOCK LEVELS EFFICIENTLY,
TRACK DISTRIBUTION CHANNELS AND MONITOR BUSINES PERFORMANCE.
• HAVING REAL-TIME DATA METRICS AT YOUR FINGERTIPS WILL ENABLE YOU TO
PUT IN PLACE CONTINGENCY PLANS TO ENABLE YOUR BUSINESS TO RIDE OUT
STORMS AND TAKE ADVANTAGE OF OPPORTUNITIES AS THEY ARISE.
• MOST ESCM SOFTWARE SYSTEMS CONTAIN FEATURES THAT DRILL DOWN INTO THE
DAILY PROCESSES OF A SUPPLY CHAIN TO GIVE DECISION-MAKERS INFORMATION ON
UNDERPERFORMING AREAS AND WHAT TO EXPECT IN THE NEAR FUTURE IN REGARDS
TO DEMAND.
E-SUPPLY CHAIN MANAGEMENT WEAKNESS

• CYBER SECURITY
• NETWORK RELIABILITY
• UNCERTAIN RETURN ON INVESTMENT
CYBER SECURITY

• E-SUPPLY CHAIN MANAGEMENT RELIES ON THE TRANSMISSION OF A

VAST ARRAY OF DATA, FROM INVOICES TO INVENTORY LEVELS, OVER
NETWORKS.
• THIS OPENS UP EVERY BUSINESS IN THE SUPPLY CHAIN TO THE
THREAT OF A SECURITY BREACHES.
• BUSINESSES SHOULD NOT VIEW THE THREAT OF CYBER ATTACKS AS
THEORETICAL. DELOITTE’S (2013) GLOBAL SECURITY STUDY, WHICH
FOCUSES ON TECHNOLOGY, MEDIA AND TELECOMMUNICATIONS
COMPANIES, REPORTS THAT MORE THAN HALF OF THE COMPANIES
SURVEYED EXPERIENCED DATA BREACHES.
• THE SOPHISTICATION OF CYBER ATTACKS MAKES INFORMATION
SECURITY AN ONGOING WEAKNESS OF E-SUPPLY CHAIN
MANAGEMENT.
NETWORK RELIABILITY

• BUSINESSES THAT EMPLOY E-SUPPLY CHAIN MANAGEMENT

DEPEND ON PERSISTENT, RELIABLE TRANSMISSION OF
INFORMATION FROM ALL ELEMENTS OF THE SUPPLY CHAIN,
WHICH DEPENDS ON RELIABLE BROADBAND ACCESS.
• ALTHOUGH CLOUD DATA STORAGE AND ON-SITE, BACKUP POWER
SUPPLIES CAN OFFSET SOME PROBLEMS, ANY SUSTAINED POWER
OUTAGES OR NETWORK DOWNTIME CAN LEAD TO SERIOUS
DISRUPTIONS ACROSS THE ENTIRE SUPPLY CHAIN.
• INCREASING RELIANCE ON DIGITAL-ONLY STORAGE AND
AUTOMATION ALSO MEANS THAT, IN THE EVENT OF SUSTAINED
INTERRUPTION OF POWER OR NETWORK ACCESS, THE
INFORMATION REMAINS INACCESSIBLE BY ANY MEANS.
UNCERTAIN RETURN ON INVESTMENT

• CREATING AN E-SUPPLY CHAIN OFTEN REQUIRES A SIGNIFICANT

INVESTMENT IN TECHNOLOGICAL INFRASTRUCTURE.
• WHILE SOME BUSINESSES SEE SUBSTANTIAL GAINS FROM E-SUPPLY
CHAIN TECHNOLOGY, OTHERS MAKE THE INVESTMENT ONLY TO
SEE NEGLIGIBLE IMPROVEMENTS IN EFFICIENCY.
• BUSINESS OWNERS SHOULD EXAMINE THEIR EXISTING SUPPLY
CHAIN WITH CARE TO DETERMINE WHETHER E-SUPPLY CHAIN
MANAGEMENT CAN DELIVER SUFFICIENT IMPROVEMENTS IN
EFFICIENCY AND REVENUE TO JUSTIFY THE COSTS OF
IMPLEMENTATION.
• IN MANY CASES, A LOWER LEVEL OF E-SUPPLY CHAIN
INTEGRATION, SUCH AS SALES AND LOGISTICS, PROVIDES
SUFFICIENT IMPROVEMENT TO JUSTIFY THE INVESTMENT.
ACTIVITY
• IN ZIMBABWE ORGANISATIONS FACE A NUMBER OF E-SUPPLY
CHAIN CHALLENGES. DISCUSS THIS STATEMENT.