Influence of E-Business on Supply Chain Management Term Paper

Excerpt from Term Paper :

e-Business on Supply Chain Management

With an increased competition in the marketplace, one can observe an increase in product offerings in the market. This should lead to shorter product life cycles. It has therefore become essential for retail firms to better manage their supply chain process so that they can better control the supply and demand aspects of their product portfolio.

It is, however, interesting to note that with the advancement of information technology, the trends in determining demand and supply forecasts are changing. Experts have now successfully identified the best practices developed and maintained by some of the leading retailing firms. They have utilized this particular information to develop more effective solutions for supply chain management. In order to bring future improvements to the supply chain management of an organization, it is essential to develop an information system of the highest quality, operated and maintained by well-qualified and trained professionals. Developing a supply chain, which is responsive enough to the changing business environment, will benefit from the new developments in the market and will be able to effectively manage the inventory according to the demand and supply trends of the market.


CHAPTER 1-Introduction

1.1 Purpose of Study


1.2 Importance of Study

1.3 Rationale of Study

1.4 Overview of the study

CHAPTER 2- Literature Review

2.1 What is e-Business?

2.2 What is a supply chain management?

2.3 The Major Types of e-Business

2.3.1 Business-to-Consumer (B2C)

2.3.2 Business-to-Business (B2B)

2.3.3 Consumer-to- Consumer (C2C)

2.3.4 Peer-to-Peer and Mobile or m-commerce

2.4 What are the effects of e-Business on the supply chain management?

CHAPTER 3- Methodology

3.1 Stage I: The Chain Reaction of e-SCM System

3.1.1 Case study

3.2 Stage II: The difficulties of Building an e-SCM System

3.3 Stage III: The Broken Supply Chain by Web Technologies



1.1 Purpose of the Study

The Internet era has revolutionized not only the way we conduct business but also the methods adopted with the management of the supply chain, such as the way businesses communicate with each other and how each member in the supply chain is impacted. The purpose of the study is to analyze how e-Business has influenced the supply chain management with reference to its past trends, present operations and future techniques.

1.2 Importance of the Study

The rise of the Internet, and attendant information technologies and their application to business, has engendered a great deal of hype. Commentators have, among other things, heralded the arrival of a new economy and foretold the total transformation of the way people conduct business through online shopping. It has also completely altered in the methods used in the demand and supply chain process.

A e-Business has focused on new information products and networks. e-Business has emphasized the cost saving significance of the Internet and the attendant technologies when doing business, this effects the costs of transactions, internal management, and marketing of products. Reactions to the opportunities and challenges of the Internet have embraced every detail of the business environment.

1.3 Rationale of Study

This paper discusses about the changes that e-Business has brought into the supply chain management's field concisely. This will cover the whole gamete of management and operation methods. This paper will not only focus on the recognition of the technological breakthroughs, but also the changes that have taken place with the industry after the introduction of e-Business concepts into supply chain management.

1.4 Overview of the study

From an economics' point-of-view, we can explain that e-Business is a significant new way of conducting business. It raises cost issues regarding existing transactions. It also impacts traditional internal and external supply chain management issues.

Industries have begun to modernize by embracing new management themes in order to accommodate the necessity for face-to-face interaction, resulting in fast shipping time and reduced warehousing costs. This paper will also discuss the current trend of supply chain management styles as well as what benefits the industry can gain by conducting supply chain management electronically. This paper will also discuss what can be done in the future in order to increase competitiveness in the market.

In the current competitive markets, the increased level of globalization and expansion of industries operations to a global scale has facilitated the ability for consumers to easily gain price comparisons. This has become increasingly important to companies. Manufacturers must fully integrate their overall operations so that they can develop a competitive edge in terms of timely delivery, efficient customer service, and improved performance.

The new technologies adopted have made the task of supply chain management more effective and easier. It is interesting to take a look at how Information Technologies systems functionally helps enterprises in planning and managing all these supply chain and inventory management activities. These supply chain management issues are significant to all kinds of firms, especially for retailers and manufacturers; supply chain management could even be the most important part of the business. If they manage their supply chain systems better than their competitors, they can gain bigger market power. Therefore, in order to face competition and challenges, industries must build an efficient electronic system to meet both internal and external wants and needs.


Literature Review

2.1 What is Supply Chain Management?

Supply Chain management is the process of managing the movement of goods from suppliers to buyers.

Supply Chain Management (SCM), also known as supply chain integration or supply chain optimization, is the process of optimizing a company's internal practices in interacting with suppliers and customers in order to bring products to market more efficiently. SCM functions encompass demand forecasting, sourcing and procurement, inventory and warehouse management, distribution logistics, and other disciplines. The SCM procedure repeatedly succeeds where Enterprise Resource Planning (ERP) fails. In order to correctly forecast inventory levels, the supply chain management system needs ERP's database cooperation (Laudon & Laudon, 2002).

A powerful SCM includes the systematization and optimization of operational and strategic information and methods within and between enterprises. SCM is connected with optimizing business processes and business value in every nook of the outspread enterprise, from the supplier's supplier to the customer's customer. SCM can utilize e-business concepts and Web technologies to bring the organization upstream and downstream. It is the strategic approach that combines all steps in the business cycle, from the beginning of the product design and the acquisition of raw materials for production to shipping, distribution, and warehousing, until a finished product is sold to the customer (Laudon & Laudon, 2002).

2.2 What is e-Business?

Laudon and Traver have defined e-Business as "the digital enablement of transactions and processes within a firm, involving information systems under the control of the firm, which doesn't include the company's revenue" (2001, p.7). For example, a company's inventory management system and warehousing do not affect its revenue directly, such as its sales strategies and models. It comes under the domain of e-Business. However e-commerce does affect revenue. By these points-of-view, it seems that a firm's e-Business system can also support e-Commerce for external value exchange.

Although e-Business has been defined as an electronic information management system for a company's internal needs, some people still think the scope of e-Business transactions should cover e-Commerce. e-Business is used to manage a firm's internal information. However, in order to be effective e-Business also needs to be supported by huge amounts of external information. In this instance, a manufacture's inventory management needs to know from its suppliers the time-line for putting the materials on the production line. On the other hand, the production time-line relates to the products' shipment date. Then those solutions extend to the customers and customers' customers and complete the business. By this theory, e-Commerce could be seen as the rear end of e-Business. Given this point-of-view, it does not only make e-Commerce's field smaller, it makes e-Commerce a part of e-Business.

People are still arguing about the definition of e-Business and e-Commerce, but from each of their incidence, it seems that e-Business is bigger than e-Commerce. This paper would support the view that e-Commerce is part of wider e-Business applications.

2.3 The Major types of e-Business

There are several types of business methods in today's e-business scopes, such as "Business-to Consumer (B2C), Business-to-Business (B2B), Consumer-to- Consumer (C2C), Peer-to-Peer and Mobile, or m-Commerce" (Laudon & Traver, 2001, p.13).

2.3.1 Business-to Consumer (B2C)

The B2C model can be easily seen from many web sites because it sells the products, information and service to consumers and gains the revenue. The B2C model involves a business selling directly to consumers via a web site. This direct selling is the main reason that companies create these web sites. Also from these web sites' revenue models, online businesses can be sorted into five different categories such as "advertising revenue model, transaction fee revenue model, subscription revenue model, sales revenue model and affiliate revenue model" (Laudon & Traver, 2001, p.61).

Advertising is the most familiar way for a web site to make profits. It means a web company provides the service for other companies or web companies…

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