Traditionally, the phrase Supply Chain Management meant assembly lines, warehouses, truckers and time sheets. Earlier, manufacturers had the luxury of taking years to develop, market and sell their products. Back then, there were few variations in packaging and in the products themselves.

In only a few years, the very fundamentals of manufacturing in virtually every industry has changed. Changes have taken place in the relationships between producers of primary products, manufacturers and retailers. Companies are looking at how to provide greater flexibility in moving parts globally. In a quest for greater efficiency and lower costs, there's been growing importance given to managing the supply chain effectively for the benefit of all parties.

The traditional vision of Supply Chain management (SCM) represents only one dimension of a business environment that is growing increasingly multidimensional. Modern day Supply Chain Management is the e-commerce of manufacturing.

And the good news is that Supply Chain optimization isn't a big-bang undertaking like the enterprise resource planning (ERP) installations of recent years.

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It’s the "Customer" decade

With the emergence of the Internet, customers seek out specific products they want at the prices they're willing to pay. Modern supply chains focus on the customer. Manufacturers need to precisely gauge what a customer might want, how to package it and where to ship it. There is no such thing as "one size fits all". When the customer wants a change, they need to be prepared to shift directions quickly. As a result, business and manufacturing processes need to be just as agile and scalable. Manufacturers who do not adopt proven methods to succeed today may be out of business tomorrow.

The Internet supply chain will be a means of communicating and doing business with suppliers and customers. Fractured, unpredictable supply chains have become less and less tolerable primarily because customers will not absorb the associated costs and long lead times. Its important to bear in mind that the your customer is just a mouse click away from your competitors.

Enabled supply chains assist companies to optimize business processes both within and outside the four walls of the enterprise and to more efficiently deliver the new products customers want, when they want them and where they want them.

What is SCM?

Supply chain management - delivering the right product to the right place, at the right time and at the right price - is one of the most powerful engines of business transformation. It is one of the leading cost saving and revenue enhancement strategies in use today.

At the end of the continuum of trends that started off from Business Process Reengineering, Total Quality Management and ERP that have all addressed only the inner workings of an Organization, SCM aims at integrating the company's internal systems to those of its suppliers, partners and customers.

Technologies such as the Internet, electronic data interchange, transportation and warehouse management software, including software that manages plant scheduling, demand forecasting, procurement, make SCM a versatile strategy to adopt.

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Why e- SCM?

Supply chain has been viewed as an inflexible series of events that somehow managed to get products out the door. It often involved questionable inventory forecasts, rigid manufacturing plans and hypothetical shipping schedules.

The Internet has changed all that. It has transformed this old-fashioned process into something closer to an exact science. An Internet-enabled supply chain helps companies

• avoid costly disasters
  
• reduce administrative overhead
  
• reduce unnecessary inventory (thereby increasing working capital)
  
• decrease the number of hands that touch goods on their way to the end customer
  
• eliminate obsolete business processes
  
• reap cost-cutting and revenue-producing benefits
  
• speed up production and responsiveness to consumers
  
• garner higher profit margins on finished goods

Effective integration of an Organizations supply chain can save millions, improve customer service and reduce inventories.

The key to getting optimum value out of automating your supply chain is to make sure you have your internal systems working well before you start extending them out over the Internet.

Here are a few tips to bear in mind while evaluating a e-SCM initiative:

• Get Perspective -One should envision the business as a whole including its current strategy and where it wants to go. Supply chain strategy is increasingly being integrated with overall corporate strategy.

• Don't Underestimate Learning Costs - The cost of training people to use new software should not be underestimated. Sending information around the world takes lesser time than it takes to get into someone's mind!

• Link to existing architecture - Supply chain applications must link to existing enterprise resource planning applications. ERP serves as the nerve center of the organization. Ideally, it should be a single point of visibility for inventory and order taking.

• And last but not the least, Think Global, Start Local !

Start Today

The slowdown in the economy has relieved most companies from counterproductive pressures on their internal operations. The massive pressure to “go 'e' ” has subsided giving organizations time, an asset in extremely short supply during the frenzy of the late 1990s, to plan their expenses on e-enablement. Companies can now conduct the critical self-evaluations of their readiness for electronic commerce that they were previously too busy to perform.

In short, the external slowdown offers unprecedented opportunities to develop internal strengths. When the economy turns around, your company will emerge as a more efficient operation. Give your supply chain a thorough tune-up by strengthening some basic elements of supply chain management.

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