e-Supply Chain

UNIT 6 E-SUPPLY CHAIN MANAGEMENT Management(e-SCM)

(E-SCM)
Contents
1. Objectives
2. Introduction
1. Insight into the e-SCM Concept
2. Planning and Execution of e-SCM
3. Adoption of e-SCM Practices
4. Organizations that have Adopted E-SCM Practices
5. Challenges while Adopting e-SCM
6. Benefits of Adopting e-SCM
3. Principles of e-SCM
4. Methodology and Tools for e-SCM
5. Approaches for e-SCM
6. e-SC Automation and Optimization with Agent-based Technology
7. Next-generation Technologies and e-supply Chain Management
8. Role, Advantages and Limitations of Software Packages
9. Summary
10. References

11. OBJECTIVES
After reading this unit, you must be able to:
∙ Identify the importance of e-SCM
∙ Describe the Insight into the e-SCM concept
∙ Discuss Factors contributing to the introduction of e-SCM
∙ Discuss Challenges while adopting e-SCM
∙ Advantages of adopting e-SCM
∙ Principles of e-SCM
∙ Know Methodology and tools for e-SCM
∙ Know Approaches for e-SCM
∙ Know e-SC automation and optimization with agent-based technology
∙ Know Next generation technologies and e-SCM

6.1 INTRODUCTION
With the rise of the Internet and IT, the old ways of doing things have given
way to electronic management and operation, opening up a plethora of
strategic and tactical options. “This study delves deep into the origins of e-
SCM and the possibilities afforded by today's information technologies,
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IT Enabled SCM resulting in a comprehensive comprehension of the concept. By analysing
actual business examples of companies that have adopted e-SCM, this paper
makes the most of the benefits and advantages to these companies in
establishing a sustainable competitive advantage”.

Undeniably, the Internet and other technological advancements have changed

how people live and work, creating new doorways and chances for businesses
to thrive. Supply chain management (SCM) has been expanded into new
realms thanks to the development of the Internet and other information
technologies. Poirier and Bauer have called this transition a "tsunami
transformation" because the Internet is a powerful medium for integrating and
synchronising all information and processes connected to the supply chain
(SC) and its management.
Management of the SC encompasses the entire network of businesses and
individuals involved in creating and distributing a good or service, from the
initial manufacturer to the final consumer. The SC as a whole, not just
isolated parts, should be considered when formulating strategies, making
decisions, or evaluating performance. There are new marketing challenges
that arise from the integration of SCM and e-commerce. Real-time, online
communication along the entire SC is now possible thanks to the widespread
availability of the Internet and other telecommunications technology. For
Poirier and Bauer (2000), "electronic SCM" is the "natural combining of
supply chain and e-commerce." Network integration is at the heart of
electronic supply chain management (e-SCM), a concept developed to meet
the challenges of a rapidly evolving e-business landscape. The term "e-SCM"
refers to an electronic SC management system that is organised and based on
technologically facilitated connections.

6.1.1 Insight into the e-SCM Concept

e. SCM is an extension of the traditional SCM concept that arose in
response to developing information technologies and redesigning business
procedures within organisations to facilitate cooperation among business
partners through the Internet. Having digitally enabled and coordinated
business connections with customers, suppliers, and internal employees, as
defined by Laudon and Laudon, makes these organisations digital. By
capitalising on the synergies that emerge from the interdependence of the
various parties involved, value can be added by deploying adaptive
information systems and technologies. More information about e-SCM can be
found in the following section, which provides definitions of the term.

∙ Definitions of e-SCM:
The term "e-SCM" (or "electronic supply chain management") has many
explanations, but it's essential first to understand the former "traditional
SCM" term. “The term SCM refers to systematic, strategic coordination of
traditional business functions and tactics across these functions within a
specific organisation and across businesses within the SC, with the ultimate
goal of enhancing the long-term performance of both the individual
organisation and the SC as a whole. One alternative definition of an SCM
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network is a group of related businesses that work together to bring finished e-Supply Chain
Management(e-SCM)
goods and services to customers”.

Figure 6.1. The Basic Supply Chain

Figure 6.1 depicts the circulation of various commodities. As goods move

from the supplier to the end customer, information must also drive back and
forth between the multiple participants in the supply chain. This two-way
flow of information is essential and should be mutual, regardless of the
number of participants in the SC. Today, SCM has been transformed into e-
SCM due to Internet technology's impact on the industry. In 2000, a new era,
the e-SCM, began with this transition. Figure 6.2 displays Ross's proposed
phased development of e-SCM.

Figure 6.2. Evolution of e-SCM

Multiple definitions of e-SCM are presented in the research (e-SCM).

According to Lankford, e-SCM is the optimal union of Internet technology
and traditional SCM. According to Ross, "e-SCM is a network of
independent partners who not only distribute certain products and services in
the SC but also stimulate demand and lead the synchronisation of capabilities
and resources in the entire supply chain to provide levels of operational
efficiency and market leadership."

Therefore, e-objective SCM is to coordinate efforts within and between

businesses to maximise value for their clients. Coordination and information
sharing among all stakeholders at all process stages are essential to realising
the full potential of an integrated supply chain and gaining a strategic
advantage.

Components that influenced the adoption of e-SCM

“The primary drivers for the switch from SCM to e-SCM are responses to
business requests brought on by the organisations' new requirements”. In
these:
∙ Additional cost savings and process enhancements are required, and they
can be achieved by extending the reach of organisations' modern
management tools from their suppliers to their customers.
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IT Enabled SCM ∙ Organisational processes are increasingly digitised as new technologies,
resources, and management strategies are implemented.
∙ To meet the ever-increasing expectations of a consumer market that is
both more discerning and more powerful than ever, businesses must be
nimble and efficient.
∙ OrganizOrganisationalzation entails reducing stock on hand while
maintaining unrivalled standards of quality and service in production and
distribution.
∙ Organisational trends are away from vertical integration and toward
functional specialisation.
∙ The trend toward contracting out non-essential business processes to
outside firms with expertise in those areas.
∙ Increases in e-commerce and the opening previously inaccessible
markets have led to a dramatic increase in international trade in recent
years.

6.1.2 Planning and execution of e-SCM.

“Poirier and Bauer (2000) identify three components in the planning and
execution of e-SCM”.

I. E-network: “Ultimately, businesses should be able to meet the needs of

their customers through a streamlined SC that benefits the end user”.

II. Responses: SC planning revolves around hearing and responding to

client feedback. The supply chain's worth rises dramatically when
businesses combine to boost their profits through coordinated answers
and innovative solutions.

III. Technology: With modern technology, especially online trade, each

element above can contribute to the supply chain's overall mission. It is
possible to think of the network, customer feedback, and technology
as the "input" to e-SCM, all of which contribute to the supply chain's
final objective (the "output") of satisfied customers.

Figure 6.3. e-SCM general representation: Input, output, mechanism, and control

6.1.3 Adoption of e-SCM Practices

Supply chain management is becoming increasingly important in today's
business environment to differentiate oneself from the competition. Internet-
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enabled integration has increased the benefits of SCM by facilitating real- e-Supply Chain
Management(e-SCM)
time information visibility and sharing. It has also provided a significant
opportunity for improving cooperation among SC partners, which can serve
as an important competitive differentiator for many businesses. To this end,
e-SCM has received considerable attention thanks to the pioneering efforts of
a few companies that recognised the value of adopting the strategy early on.

∙ E-SCM as a source of creating competitive advantage

Nowadays, it's evident that no competitive advantage can be considered
permanent, as every advantage eventually fades away. Businesses should
focus on continuous improvement rather than seeking a temporary
competitive edge to adapt better to shifting market conditions, technological
advances, customer preferences, and supplier capabilities.
"If a company wants to keep its edge in the market for the long term, it must
pay close attention to technological progress and adopt innovations into its
operations." Organisations must recognise that "computerisation does not
automatically generate an increase in productivity, but it is a fundamental
component of a broader spectrum of organisational changes that drive
productivity."

Speed, speed of information, and speed of delivery are crucial to the success
of any business in the modern era, and these benefits are made possible by the
Internet and other information technologies. We are shifting from a period in
which "the big ate the small" to "a world in which the fast eat the slow," as
World Economic Forum director and founder Klaus Schwab put it. In
addition, Hof details Bill Gates's belief that information management is
crucial for a successful strategy and competitive advantage and how
organisations that don't use such systems and technologies will fall behind
their competitors. It stands to reason that technological advancements are not
the only means by which a business can gain a competitive edge. Companies
need to have technology that is compatible with their operations if they want
to stay competitive.

6.1.4 Organizations that have Adopted E-SCM Practices

Some of the most successful companies in the world were early adopters of
electronic supply chain management. Their successes and failures in adopting
e-SCM can serve as examples for other businesses. Dell's success can be
attributed mainly to the company's management tenets and vision for a Zero-
time organisation based on the benefits of the Internet, an integrated, virtual
organisation, and online sales, all of which were put into place by the
company by the fall of 1996. Since then, Dell has undergone phenomenal
expansion, with sales increasing by 58% in 1997, profits rising by 82%, and
the company's stock splitting for the sixth time in 1998.

Key to Dell's success was the strategy's facilitation of the company's ability to
trade stock for data. Information is more mobile, disposable, storable, and
trackable than physical goods, so Dell kept records of customer orders, needs,
and forecasts. Therefore, Dell uses the virtual integration model shown in

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IT Enabled SCM Figure 6.4, in which the conventional roles and boundaries of the value chain
are disregarded.

Figure 6.4. Virtual integration model

“Today, Dell's success still places it among the best businesses in the world.
And among CIOs, Dell is still the preferred option for enterprise flash
deployments”.

Lanier Worldwide Inc.: One of the largest in the industry, it offers clients in
over 100 countries, allowing them to produce and disseminate professional-
quality documents more quickly, cheaply, and efficiently than ever. “They
can do this by emphasising the customer experience heavily and adhering to a
rigid workflow methodology. Lanier uses a WMS, TMS module, and DSS to
create a centralised database that can be accessed by employees and clients
alike. In addition, Lanier allows customers to view the status of their orders,
view all their order information, and view the real-time status of their orders
via the Internet, making them very happy. Study topics such as knowledge
sharing are addressed by the DSS, which collects and manages data from
Lanier's distribution centres in a unified database for purposes such as trend
analysis, performance tracking, and quality control reports”.

Wal-Mart is a worldwide firm that owns and operates multiple warehouse

clubs and outlet malls. The corporation is the largest in the world in retail
sales and employs more people in the private sector than any other company,
with over two million. It also performs better than all other bargain stores in
terms of operating profit, inventory turnover, and sales per square foot.

The company's transformation from a regional to a global powerhouse has

mainly been attributed to practical supply chain management improvements,
such as the successful integration of suppliers, manufacturing, warehousing,
and distribution to stores. Modern technology and network design enable
precise demand forecasting, inventory tracking and forecasting, the planning
of highly efficient transportation routes, the administration of client
relationships, and the logistical organisation of service response. Thanks to
this strategy, Wal-Mart has become a dominant force in a worldwide
cutthroat market thanks to several long-term competitive advantages,
including lower product costs, lower inventory carrying costs, increased in-
store variety and selection, and competitive customer pricing.

Cisco: A pioneer in the networking industry, Cisco has revolutionised online

interaction. One of Cisco's greatest strengths is its supply chain management
capabilities, given the company's extensive network of business associates.

6.1.5 Challenges while Adopting e-SCM

e-SCM streamlines demand and SC through seamless data and physical assets
integration. Partner integration is a difficult task in and of itself. While the
Internet and other IT infrastructure make this kind of integration possible,
gaining a sustainable competitive advantage requires more than just installing
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shiny new software. While there may be financial and productivity gains e-Supply Chain
Management(e-SCM)
from implementing Internet-based technologies, doing so raises cultural and
technical issues. Collaborating is based on trust, dedication, and cooperative
standards, but it also necessitates that companies overcome their innate
reluctance to share confidential information with other partners.
Consequently, businesses can't reap the benefits of integration until they get
past cultural worries. When it comes to technical issues, however, things like
the Internet's inherent unreliability and the difficulty of integrating
applications among trading partners come to mind.

“Successful adoption and enhanced performance can be guided by analysing

SCM opportunities and developing a clear roadmap and strategy for the e-SC.
Despite the challenges, e-SCM has proven its worth for a variety of reasons,
including improving operations, outsourcing more effectively, increasing
profits, boosting customer satisfaction, producing high-quality results,
responding to competitive pressures, adapting to a more global market,
leveraging the power of e-commerce, and managing supply chains as they
become increasingly complex”.

6.1.6 Benefits of Adopting e-SCM

“IT and growing e-business applications, together with related new business
models, are playing an increasingly essential role in supply chain
management as organisations demonstrate lower costs and increased
responsiveness of their SC due to e-business investments”.

Figure 6.5, therefore, illustrates the customer centricity of the customer-

centric/e-SCM, which, in contrast to traditional SCM, places the customer's
needs ahead of the company's resources and expertise.

Figure 6.5. Customer-centric e-SCM

“As businesses increasingly rely on Internet technology to link their channels'

worth of data, transactions, and decisions, the entire channel system can
continuously generate radical new sources of competitive advantage through
cyber-collaboration”. This paves the way for collaborative product
development, electronic marketplaces for purchasing goods, and networked
strategies for managing operations and satisfying customers.

This kind of paradigm shift, which was made possible by Information and
Communication Technology, has had a significant impact on the way people
work. It has made it possible to do more with less and gives people the
chance to gain competitive advantages using e-SCM.

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IT Enabled SCM Activity 1
What are the challenges of implementing e- Supply Chain Management?
Write short notes.

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6.2 PRINCIPLES OF E-SCM

In a global economy with multiple markets and customers with varying
needs, supply chain management faces a significant challenge in finding ways
to effectively integrate and optimise supply chain operations using
cutting-edge information technology. E-business, or conducting business over
the Internet, is a relatively new way to investigate potential value-added
avenues in distribution channels. Regarding supply chain management, the e-
business method utilises Web-based applications for planning and carrying
out front- and back-end processes. “Supply chain management that takes
advantage of e-business practices is an effective strategy for gaining a
competitive edge through increased value-added, process visibility, agility,
speed, efficiency, and customer satisfaction”.
E-SC refers to the processes in a company's operations that use e-business
strategies. E-SCM aims to facilitate and optimise value-added activities in
supply chains through e-business technologies.

Figure 6.6: (a) Traditional SC structure. (b) Networked SC structure.

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A defining characteristic of SCM made possible by e-business is its emphasis e-Supply Chain
Management(e-SCM)
on the importance of networks. The focus is communication, teamwork,
coordination, and open data. Partners in a networked supply chain can
instantly share data, expertise, and other assets. Networked relationships
replace linear transmission with end-to-end connections in the SC, allowing
for the direct transfer of information from one SC partner to another without
any loss of quality or delay. Figure 6.6 depicts two supply chain structures,
one that is networked and one that is more traditional but simplified.

“As a result of this networked information transfer, we can relay customer

demand data to any link in SC without compromising its confidentiality”.
Shorter lead times and leaner production aren't the only ways increased data
sharing has impacted supply chain operations. Trust and dependence on one
another are the cornerstones of any successful partnership.
Management of SC in an Internet-enabled setting should adhere to the
network-oriented organisation principle, which stipulates that participants
should: share supply chain goals and function as an integrated system;
cooperate based on cooperative norms and resolve conflicts; recognise and
rely on resource interdependence, and recognise and rely on the
interdependence of resources. In this section, we'll go over the fundamentals
of managing the electronic supply chain.

∙ Adding values to e-SC

To satisfy customers, those in charge of the manufacturing supply chain must
emphasise improving the products they ship out. Connecting the company's
supply and demand sides, value-added activities take raw materials and ideas
and turn them into something more tangible.

Figure 6.7: Value-adding activities of an e-SC.

Traditional SC priorities have included inbound and outbound logistics,

production, sales, and after-sales support. The supporting activities provide
the resources and framework for the primary activities. Information
technology, finance, and human resource management are all under this
category. “As part of an e-business strategy, SC has been modernised with
value-adding capabilities and new business models, such as the ability to
adapt quickly to the specific, real-time needs of end customers, virtual
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IT Enabled SCM integration of production with retail store management systems, etc. That's
why IT plays such a crucial role in modern SC”. The value-added processes
of an e-SC are shown in Figure 6.7.

Regarding networked e-SC, ICT, especially Internet technology, is integral to

integrating information flows. Each link in the supply chain has
instantaneous access to customer needs and data on all other links in the
chain's operations. Because of this, the physical flow of goods is optimised,
and coordination throughout the SC is streamlined.

∙ E-SCM focused on core competence

Focusing on one's strengths is essential in today's competitive e-supply chain
environment. To remain adaptable in market uncertainty, businesses should
focus on their core competencies to generate the most value for the company
and its supply chain.

The broad availability of Internet connectivity may ease the execution of this
plan by allowing partners to communicate and transact business online. This
strategy is helpful for either the virtual enterprise model, which we'll address
in the next section or solid long-term partnerships in the supply chain. The
ability to outsource non-essential business functions benefits from a dynamic
business formation or a flexible corporate structure. With the help of the web,
a virtual business can be organised on the fly depending on partners who can
be involved for as little as a single project or as long as an entire lifetime.
When deciding on a company's structure and whether to produce goods in-
house or purchase them, the classic transaction cost theory suggests factoring
in the expenses of managing external relationships and internal processes.
Companies that manufacture goods today must be nimble to meet the
market's demands. As Internet technology has progressed, the costs of
managing relationships between organisations have decreased. Accordingly,
focusing on core competencies is the way to go if you want to build an
adaptable infrastructure and employ mass customisation strategies.

∙ e-SC integration
Supply chain integration guarantees that all aspects of the company work
together efficiently. SC efficiency, savings, and adaptability will all improve
due to these changes. The eventual goal of virtual enterprise planning is
supply chain integration and coordination, which requires communication
between the various links in the SC. The integration of SC information
systems is more crucial than the integration of the SC itself.

“When put into reality, the e-supply chain's virtual nature makes it both
practical and effective as a business model. E-SC integration is incorporating
preexisting supply chain and operational systems into a networked corporate
environment that uses the Internet and other information and communication
services”. Different parts of the e-Supply chain are integrated at different
stages.

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∙ e-SC co-operation e-Supply Chain
Management(e-SCM)
Cooperation is a crucial term in SCM. An adequate supply chain relies
heavily on this. The importance of cooperation and opportunism to the
success of supply chain partnerships has been studied in various contexts.
Interdependence between organisations, a cooperative mentality, a normative
contracting format, and open communication about behaviour are just some
factors known to affect the success of partnerships significantly.

∙ Managing e-SC as virtual enterprises

When taking an e-business approach, Web-based information systems can be
used to facilitate at least some supply chain operations. It follows that some
elements of supply chains are not natural, either because they do not exist in
the physical world or because of widespread agreement. With the help of the
Internet, they could operate as a virtual enterprise (VE) to better manage and
coordinate their networked supply chain transactions. A more adaptable,
responsive, and efficient electronic supply chain is possible thanks to the
"virtual" quality. “To more effectively respond to business opportunities, a
group of companies may form a temporary alliance known as a virtual
enterprise in which they share skills or core competencies and resources and
whose cooperation is facilitated by electronic networks”.

Activity 2
Write Notes on Traditional Supply chain Structure, Network supply Chain
Structure, and Value Adding Activity of an e- Supply Chain Management.

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6.3 APPROACHES AND TOOLS FOR E-SCM

The Internet has significantly impacted the coordination and communication
between participants in the supply chain. Transactional delays and physical
distance between dispersed supply chain partners are reduced, if not
eliminated, by Internet technology. Partners in the supply chain can now
share information instantaneously regardless of geographic location or
company size to advances in communication technology.

The World Wide Web (WWW) is a system built on the Internet that allows
computers and their users to communicate and share information through the
use of markup languages (such as HTML and XML) and graphical user
interfaces (GUI). Improvements in supply chain performance, as well as new
business models and SCM technologies, have resulted from ICT innovations.
In this section, we'll review the foundational information technologies and
methods for applying these approaches to support e-SCM.
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IT Enabled SCM ∙ Application scenarios of the Internet technology to SCM
“e-business and virtual firms are innovative, collaborative business
techniques enabled by Internet technology. They have significantly impacted
SCM because of their improved communication capacity, agility, and
dynamic and real-time information exchange. Many studies have been done
on web-based apps for these administrative duties. With the help of Web-
based apps, businesses that collaborate with a network of suppliers, vendors,
and distributors may quickly and efficiently share data, engage in two-way
interactions, and dynamically trigger collaborative business processes”.
Groupware as integrated collaborative systems, a database management
system (DBMS), a web server (WS), and related middleware are critical
components of such applications. With Web-enabled legacy systems,
businesses can better communicate with their SC partners and streamline
operations by fusing the two sets of procedures.

Internet-based tools can be broken down into four categories when discussing
SCM. Various Internet application use cases centre on multiple facets of
electronic supply chain management.

▪ Information publishing
Publishing information is a core feature of many e-business software
programmes. Information is disseminated in a single direction through the
internet for supply chain management purposes, with no room for two-way
communication or interaction. The primary goals of applications in this
category are partner engagement (i.e., increasing transparency in operational
processes) and customer acquisition (i.e., advertising the company's
offerings). The information is available instantly to both customers and
supply chain partners. The services provided by Circuit World Online are a
comprehensive online resource for the electronics industry. Through this
platform, producers of electronic goods can have their wares officially
announced and registered. If you're in the market for electronic circuit
products, this online service can help you track down your favourites from
various reliable sources. These programmes facilitate direct marketing
communications between manufacturers and their customers.

▪ Interaction support
The majority of today's popular web-based programmes provide functionality
beyond simple document publication. They usually serve as a platform for
people to engage in group discussions and share their insights. In this case,
the primary goal of the Web-based applications involved is to provide Web
services to users in response to those users' requests while also facilitating
communication between supply chain partners. Thus, information delivered
to users over the Internet is alive, tailored to their needs, and can be interacted
with. “This type of two-way communication was developed for sharing and
receiving information, negotiating business proposals, making decisions,
keeping tabs on operational processes, and so on”.

Tools such as electronic mail, groupware, video conferencing, online

industrial communities, information exchange forums, remote process control
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and monitoring systems, and many others fall into this category. Using these e-Supply Chain
Management(e-SCM)
programmes, consumers can request assistance from businesses online. The
registered communities in the SC can help partners exchange information and
expertise and provide them with the needed services.

▪ Online transaction
In this case, online tools are used to carry out those above interactive
monetary exchanges. The applications share data and merge it with financial
flows and orders to the physical supply networks. The supply chain
transactions implemented as a result of these interactive online processes will
be the result of this. The e-commerce platform utilised by Dell Computer
Corporation is an excellent example of such a programme. Dell's website
features tools for taking custom orders and arranging production runs. The
online platform allows buyers to enter their requirements and finalise their
purchases. Orders are sent to the most suitable plants in their respective
regions for production, and the system then ships out the final products to the
customers.

∙ Information systems for e-SCM

The job entails managing the flow of materials from their originators to those
who will use the finished product. Supply chain information systems regulate
the data streams. “Intranets, extranets, Web services, Web portals, agent-
based business automation technologies, wireless networks, and so on are all
examples of Internet and information technology that may be integrated with
information systems supporting supply chain operations in an e-supply
chain”.

▪ Development history of SC information systems

Figure 6.8: Development history of SC planning information systems.

Activity 3
Explain the various e-SCM tools now available; also, Describe the various
Bill of Material Databases used by your company. Does each division have a
slightly different Bill of Material Database? Why? Make a "tree" of the Bill
of Materials for one of your regular offerings.
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IT Enabled SCM …………………………………………………………………………………

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▪ Infrastructure of information systems for e-SCM

An e-SC is an interconnected database that provides additional services to the
participants in the supply chain.

Figure 6.9: (a) “Function-focused enterprise information system infrastructure”.

(b) “Process-driven, customer-focused enterprise information system
infrastructure”.
These information systems support a variety of internal and external business
processes. Systems can function as a standalone entity, a client-server
architecture, the World Wide Web, or a wirelessly connected part of inter-
company communications. Initial applications of computerised information
systems were in the areas of accounting, financial management, and office
automation. Later, computers were also used for numerical control and
computer-aided manufacturing (NC, CAM), among other items in the
business world. However, the earliest computerised systems tended to operate
independently, each handling a specific organisational task. For instance, a
128 company's transaction processing system might be used in several different
roles. The operations team uses a TPS to manage product needs, track e-Supply Chain
Management(e-SCM)
production, log job starts and finishes, and more. The issuance of purchase
orders, management of stock levels, handling of requisitions for materials,
and other similar tasks are all handled through a TPS in the purchasing
department.

Data on products are shared between the two divisions and used for various
tasks. Data redundancy is just one problem caused by this type of information
system architecture, which can also lead to inconsistencies in the same data
between departments due to human error. A company's operational efficiency
suffers because of the difficulty in transferring and interpreting data between
disparate systems. Everything about this haphazard setup serves a greater
goal. Subsequently, the framework was reworked into a customer-centric,
process-driven setting for synchronising internal business processes. When it
comes to transforming information, the time and money saved by using this
type of infrastructure can significantly impact the overall productivity of a
process. All relevant functional department changes are automatically
updated thanks to the information systems' shared, integrated, company-wide
data sources and transaction processing. The infrastructure's process-driven
design prioritises speed of response and effectiveness of coordination for
customers. A company's data and information systems are linked to form an
integrated enterprise system. The information system architectures of an
electronics manufacturer are shown in Figure 6.9.
The introduction of the point-of-sale (POS) system in the 1980s marked one
of the earliest successful information system integration. Using barcodes and
scanners, a POS system coordinates purchases made at retail registers. The
system integrates with marketing and sales software to facilitate the
management of customers and sales. These days, point-of-sale (POS) data is a
crucial informational resource that links the needs of consumers with those of
retailers, distribution centres, factories, and other upstream suppliers. As a
result, the infrastructure supporting these systems has shifted from being
primarily functional to being driven by enterprise-level processes that focus
on customers. Essential e-business strategies have included e-procurement
and e-marketing platforms, which facilitate data sharing and completing
transactions between buyers and sellers. By creating novel distribution and
advertising avenues, they automate the processes involved in the e-supply
chain. The foundation of such a digital supply chain is shown in Figure 6.10.
For e-supply chain management, online marketplaces and portals represent
helpful strategies for coordinating and centralising various business
processes. In the following paragraphs, we will talk at length about these
methods.

System integration and e-marketplaces are depicted in Figure 6.10 as two

methods for connecting an enterprise system with its clients and vendors.
Enterprise systems can be integrated with stable supply chain partners by
exchanging operational data and coordinating transaction planning and
execution. Spot trading is a form of buying and selling that can be conducted
in an online marketplace.

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IT Enabled SCM

Figure 6.10: “e-Supply chain information system infrastructure.”

∙ Enterprise resource planning system (ERP)

Table 6.2: Major ERP commercial tools

A company's ERP system acts as its nerve centre. It's a complete application
software suite with many different parts. An enterprise resource planning
system (ERP) is a database-driven platform that helps businesses in many
ways. It plays a crucial role in e-supply chains by linking businesses together
and facilitating the coordination of value-added processes within each
company. Table 6.1 reveals that SAP, Oracle, Baan, and PeopleSoft are the
leading enterprise resource planning (ERP) software, providers.

Functions of ERP systems

The primary roles of an enterprise resource planning system are the
management and analysis of the transactional activity in an organisation.
When first implemented, ERP systems tend to prioritise the needs of the
enterprise itself. The following are examples of the tasks performed by an
enterprise resource planning system.

▪ Operations management
A company can use an ERP system to manage and analyse its operations
across all its divisions and departments. Operations management in an
enterprise resource planning (ERP) system includes critical processes like
purchasing, stocking, production, quality control, shipping, and closing. An
EPR sales order management interface is shown in Figure 6.11.

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 e-Supply Chain
Management(e-SCM)

Figure 6.11: An example of an ERP sales order management interface

▪ Financial management
ERP software helps businesses track and manage the value they generate
through internal transactions and cooperative supply chain activities. In
addition to recording financial transactions, it creates analytical reports on
financial performance. Managerial accounting and manager self-services give
business leaders instant access to up-to-date data.

▪ Human resource management

▪ Performance analysis
∙ Strategic business management and operational performance analysis are
both aided by ERP software. An enterprise resource planning (ERP)
system, built on a network of interconnected databases, lets companies
keep tabs on and analyse data from every facet of their operations.
The analytic process aids upper-level management in spotting
internal and external threats and opportunities. The analysis
department is in charge of gathering and analysing crucial data, such as
financial performance, market share, reliability of forecasts, on-time
delivery, customer order fill rate, and more. As was previously
mentioned, ERP software typically includes elements of both MIS
and EIS.
∙ Extensions of ERP systems
∙ To improve the availability of company information and processes to
business partners and increase customer service efficiency and agility,
ERP systems are currently being expanded to incorporate external
business partnerships and e-business technologies with internal business
processes. ERP systems allow worldwide visibility of company
information in coopcollaborativeces by integrating supply chain
management, customer relationship management, supplier relationship
management, and product life cycle management. With the Internet,
supply chain participants may better coordinate their efforts by
sharing information and corresponding with one another. Figure 6.7
depicts such an extent. One development example is merging data 131
from various business systems, such as POS, CRM, and ERP.
IT Enabled SCM
6.4 APPROACHES FOR E-SUPPLY CHAIN
MANAGEMENT
Numerous possibilities for enhancing SCM and creating new e-SCM
business models have arisen due to the aforementioned e-supply chain
management technologies. “e-SCM has benefited from IT-enabled
approaches and Web-based technologies, especially in visibility/
transparency, connectivity/integration, and automation”. Therefore, these
benefits may result in enhanced speed, dexterity, coordination, and
optimisation. The following are methods that benefit companies and are made
possible by e-business technologies.

▪ E-Procurement:
Purchasing and inbound logistics are two aspects of the broader term
"procurement," which describes the process of acquiring goods from outside
sources. Electronic procurement, or e-Procurement, is an online purchasing
system that streamlines the purchasing process by allowing customers (and
potentially vendors if the platform is a public marketplace) to place and
manage orders electronically and access a broader range of administrative
tools. The term "e-Procurement" refers to using enterprise resource planning
(ERP) systems and Internet technologies to facilitate procurement. E-
Procurement is a business method using either the vendor's online ordering
system or an open market.
Company employees can use a vendor's e-marketing system to access the
company's marketing Websites and browse electronic catalogues for the
products they need. With this method, both time and money can be saved
during the buying process. Suppliers and retailers may be able to work
together to improve supply chain planning. Manufacturing and logistics can
be coordinated with purchasing efforts when the vendor's system offers clear
visibility into enterprise manufacturing planning and stock levels of ordered
items. Using this information, retailers can better plan production and
inventory.

Using a public e-procurement marketplace, the marketplace service can be

used to implement e-procurement. It is incumbent upon purchasers to seek
out a vendor, obtain pricing information, and place orders via electronic
means. This method can further decrease purchasing costs while improving
product quality by increasing the pool of potential suppliers. Spot trading
relationships between buyers and sellers make it harder to establish closed
coordination.

▪ e-Supply chain portal

▪ Coordinated e-SC planning and decision-making: Coordination
possibilities in e-SC stem from the open nature of operational data made
possible by the Internet and enterprise systems.

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 e-Supply Chain
6.5 E-SC AUTOMATION AND OPTIMISATION Management(e-SCM)

WITH AGENT-BASED TECHNOLOGY

“e-SC operations are typically carried out in a dynamic virtual integrated
environment, made possible by incorporating e-business strategies”. When
managing the complexity, virtuality, and dynamic nature of e-SC, automated
transaction processing is necessary. However, there are only a few low-level
transaction tasks that e-SCM technologies can fully automate at this time.
This is because human decision-making is required in many facets of the e-
supply chain, including but not limited to prioritising tasks, allocating scarce
resources, settling disputes, negotiating terms, optimising processes, etc.
“Coordination and negotiation tasks with online partners present a significant
challenge for e-SC managers in the networked, dynamic e-business
environment due to the complexity of transactions, the need for promptness,
the dynamic nature of partnerships, and the heterogeneity of the underlying
technical platform”. e-SCM tools need to get smarter if they're going to help
people with their management responsibilities. Intelligent agent-based
systems are a potential solution in this regard. The term "intelligent agent"
refers to a software component that is autonomous and capable of interacting
with other agents to accomplish shared objectives. Using agent-based systems
to automate business processes has been the subject of extensive academic
research. Supply chain management and e-commerce are other fields where
this has been found useful. The agent-based technology will be presented
alongside its potential benefits in electronic supply chain management.

▪ Functions of agent-based systems:

There are two types of capabilities that intelligent agents possess: internal and
external. Those are summed up here:

Internally oriented functions

Autonomy. Agents act independently based on system protocols and
objectives. To directly call upon them would be futile. The capability
promotes autonomous behaviour among agents (to some extent).

Self-learning. Agents can pick up knowledge from their surroundings.

Using this feature, agents can adjust to new conditions.

Proactivity and reactivity. Being proactive and reactive is essential—

timely and reactive action from agents responding to events in their
environment. To detect shifts in their surroundings, agents can use this
feature. Furthermore, agents can act autonomously to achieve system
objectives. This feature allows agents to work by a set of rules and
goals.

Externally oriented functions:

Coordination and Co-operation. To work together in harmony and
cooperation. Agents take cooperative action to achieve shared goals. All
sorts of software and human agents can work together to resolve task
conflicts.
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IT Enabled SCM Communication. It is through the exchange of messages that agents can
influence their surroundings.

∙ Applications of intelligent agent systems to e-SCM

SCM and e-commerce are just two areas where intelligent agent technology
has proven useful. The technology helps automate, coordinate, and optimise
processes along the e-supply chain. Communication agents, negotiation
agents, optimisation agents, and so on have specialised functions. The agents'
streamlined functionality allows them to complete their missions without
human intervention. However, the reality of a transaction involves multiple
parties and several steps. For this reason, creating multi-agent systems to
handle e-supply chain jobs is essential.

6.6 NEXT-GENERATION TECHNOLOGIES

AND E-SCM
These technologies will significantly enhance the integration capabilities of
Web-based systems. This means that e-supply chain integration can become
even less complicated and more productive with the help of grid computing
technologies. These days, online systems can automate many formerly
manual business processes. Figure 6.12 illustrates that there is still room for
technological improvement in integrating business networks and SC.

Figure 6.12: Conventional enterprise system architecture

Figure 6.13: Enterprise nervous system (ENS) architecture

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Management(e-SCM)

Figure 6.14: Technology for the Grid and ENS

Figures 6.13 and 6.14 depict how the global grid and ENS will allow for the
seamless global integration of businesses worldwide. Dynamic optimisation
of supply chain processes is becoming increasingly feasible thanks to
advances in computational technology. The supply chain members' business
processes will be analysed and optimised with the help of spare computing
resources. Most small and medium-sized businesses cannot afford this at this
time. Streamlining network access, allowing for seamless connectivity,
boosting efficiency, enhancing agility, and decreasing costs are some ways
that technological progress hopes to improve e-supply chain management.

Web-based intelligence is the other trend in the evolution of technology. It is

anticipated that the next generation of e-supply chain management will
feature enhanced decision support features for businesses. Existing online
services, the vast majority of which are primarily concerned with transaction
processing, will have their capabilities expanded due to this development. E-
supply chains will function more effectively thanks to the intelligence made
possible by the Internet.

6.7 ROLE, ADVANTAGES AND LIMITATIONS

OF SOFTWARE PACKAGES TO THE SCM:
The context of software development is intrinsically linked to the
development of computer systems over the past nearly half-century. The price
decrease, the size reduction, and the increase in hardware performance have
contributed to the story more complex computer-based systems.
Microelectronic devices can now process 200 million instructions per second,
a massive leap from the tens of thousands that vacuum tube processors could
handle. Users and IT professionals frequently bring up specific programmes
when discussing the intended function of a system. The term "software"
describes a wide range of computer-related concepts, including the
developers of the underlying code for operating systems, coding languages,
and application-specific routines and procedures. Any instructions for
running a computer system designed to perform computation and processing
are considered software. The term is typically used to refer to factory-made
kits rather than DIY guides. In the commercial sector, programmers are
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IT Enabled SCM usually developed by software manufacturers or consultancies. They keep an
eye on everything the computer does to ensure its resources and power are
used wisely. A computer programme is a set of coded instructions for the
computer to carry out a series of operations to accomplish a predetermined
goal. The code is written in a programming language, a specialised language
or a set of commands that lets you describe tasks like computation and
processing in a way that a computer understands. It is common practice to use
a fourth-generation programming language in addition to a procedural
language. This language allows for a significant reduction in the number of
instructions needed for data retrieval programmes compared to procedure-
oriented languages. Fourth-generation languages are widely used by people
who are not programmers because they are much simpler than older
programming languages (such as managers). As we move closer and closer to
the year 2000 and beyond, we can no longer rely on historical precedents to
foretell what will happen. “Because of the strong market forces created by
electronic commerce and rising competition, companies can no longer plod
along traditional paths or work to maintain the status quo. Companies are
learning the hard way that when faced with novel problems, the tried and true
methods of the past are no longer adequate”.

We now face different challenges and opportunities because of the altered

nature of the business. There is a rapid evolution toward a new model of
computer operation. Many names have been coined to describe this style of
computing, including network-centric, Intranet, and distributed object
computing. Its purpose is to offer businesses more flexibility, scalable,
reliability, and user-fire than those provided by conventional client/server
architectures. “Despite its potential, SC application software implementation
is accompanied by ambiguity and misunderstanding that characterise all
technology and enterprise practice forms”.

6.8 SUMMARY
“Given the importance of e-SCM and its effect on increased competitiveness
through continuous integration within a network of organisations, many
researchers have studied this topic, and many businesses have implemented
this strategy and demonstrated the benefits of the Internet-SCM merger to
their day-to-day operations”. The study's primary focus was on how e-SCM
practices can help businesses gain a competitive edge. After explaining what
e-SCM is and how it works, we discussed where some companies stand in
adopting and implementing the practice. There are many benefits to
implementing e-SCM, including better communication among partners,
information sharing and synchronisation, reduced costs, streamlined
production flows, shorter cycle times, fewer resources needed, and the
elimination of time and space barriers to increasing customer satisfaction.
Use of real-world illustrations and secondary sources The purpose of this
paper was to use evidence to argue that e-SCM practices are beneficial, that
they help businesses work more efficiently, and that this efficiency gives
them an edge in the marketplace. “Because of the importance of innovation
and technology in today's business climate, the benefits of integrating the
Internet into SCM outweigh the risks and costs. The paper's goal is supported
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 by examining the advantages gained by companies that have implemented e- e-Supply Chain
Management(e-SCM)
SCM”. This gives these businesses an edge over rivals who have not yet
integrated with their partners and allows them to reap the rewards of doing
so.

Companies must adapt quickly to these factors to prove the value of e-SCM
and meet the challenges of modern business. Businesses must e-SCM as soon
as possible to avoid falling behind in an era where traditional communication
and information transmission are neither efficient nor fast.

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