The consequence of which is the increased decline in the cycle time for the inventory replenishment cycle. In such manner the Internet turns to become the real time solution for perpetual demand and replenishment. While the customer orders for a new product through the Internet, another set of raw materials will be replenished throughout the supply chain. The lead time moves from the serial product flow to instantaneous information flow. SCM traditionally has been involved with the cycle time reduction in terms of lead time compression that would entail the results. (Internet-enabled supply chain management)
The Internet can entail for the replacement of lead-time and waste for information and with more effective timely information, it is possible to reduce and avoid such costs. To make the SCM more effective it is possible to provide for internal sharing of information through Intranet that supports internal process within the organization. The sales persons of the company in the field collects the data on customer requirements and suppliers information and using the dial up to the server/host application can feed data directly into the system not necessitating the client side involvement. Customers doing business with large number of distributors may collect field information like distributor orders, medium range promotions, or long-range business plans through the Internet. Internet is thus viewed as most successful mode of gathering information from large groups of people and companies spread over a wide area. With the application of the Internet it is possible to reduce the level of inventory throughout the whole supply chain and the cycle time from suppliers to end-customer. The American Software has formulated the Software Supply Chain Planning TM that includes various models like Demand Planning, Replenishment Planning, and Manufacturing Planning. (Internet-enabled supply chain management) pioneer project identified by the Radio Frequency Identification Technology --RFID and a global network-based information exchange system could assist enhance the effectiveness of delivering fresh produce through out the Supply Chain. The Project is launched by the University of Florida's Center for Food Distribution and retailing that sets an example for all the enterprises globally on the way to the link the capabilities of RFID with a national or global network, therefore, all participants in the supply chain have the latest available information. The project named Visibility Validated aims at the entire food chain spreading from growers and packers to shippers and transportation services along with warehouse operators, wholesalers and retailers. The RFID tags involve a microchip and a tiny antenna that transmits the price and other relevant data on the product to the computer. The technology permits the product to be watched at every stage of the supply chain, recording temperature, shock and other conditions during shipping. (Supply chain project links RFID with Internet)
The Supply Chain Management is effective integration of the information and material flows within the demand and supply process. However, most of the companies required resolve of a couple of major and interdependent concerns. Firstly, it has to deliver the products with the customer-acceptable quality. Secondly, there is the necessity of high quality, relevant and timely information according to the need. For most of the customers and manufacturers, the business processes and support systems will not entail the task of quickly entailing planning and execution information from the marketplace to production and onto vendors so that the goals of the customers are persistently met. The effective management of supply chain involves key factors like high speed, low cost, communication and collaboration. The internet-based Supply Chain Management considerably transforms the way in which business does business.
As a result, management is essential to vary how they view and serve the markets. The traditional methods are no more compatible particularly to those companies striving to enhance the market share. While the more and more companies are required to innovate new supply chain models management is forced to taken the right actions or risk being left being. As a result the supply chain is substantially altered in terms of process, and system. A small error in such respect goes to prove very costly in the near and longer terms. The Internet seems to provide some excellent scopes to improve the Supply Chain Management effectiveness in terms of reducing costs and enhanced speed; it cannot be regarded as the first step in on the right path to have highly competitive e-supply chain capabilities. Simply adopting different software at the problem is not the solution for the prime concerns of the Supply Chain Management.
Irrespective of the requirement of software it is essential that the process of information flow is to be defined clearly in order to activate material flow at the right time. The evidences prove that overzealous adoption of such technologies without a carefully planned strategy can prove very costly particularly when the target is missed or worse not defined in the first place. Besides it is essential to solve the internal information and material flow process problems before going external. (E-Supply Chain Management: Prerequisites to Success) The companies are required to concentrate on the success factors and performance dimensions that actually count for become successful in the particular market. The significant and measurable benefits that incorporate reduced uncertainty in demand and availability, reduced cycle time, reduced inventory, lower costs, increased throughput and better on-time performance are the actual determinants. However, companies are required to aim at growth through market-share improvement rather than simply concentrating on cost reduction. (E-Supply Chain Management: Managing the Extended Enterprise)
Donovan, Michael. R. E-Supply Chain Management: Managing the Extended Enterprise.
Retrieved at http://www.rmdonovan.com/pdf/e_SCM_PARTII.pdf. Accessed 20 September, 2005
Elamin, Ahmed. Supply chain project links RFID with Internet. 26 August, 2005. Retrieved from http://www.foodproductiondaily.com/news/news-ng.asp?n=62116-rfid-epcglobal-fresh-produceAccessed 20 September, 2005
E-Supply Chain Management: Prerequisites to Success. Retrieved at http://www.rmdonovan.com/pdf/e_SCM_PARTI.pdf. Accessed 20 September, 2005
Ganeshan, Ram; Harrison, Terry P. An Introduction to Supply Chain Management. Retrieved from http://www.invatol.com/IntroSuplChnMgt.html. Accessed 19 September, 2005