IMPORTANCE OF E SUPPLY CHAIN MANAGEMENT IN E COMMERCE

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A Monthly Double-Blind Peer Reviewed Refereed Open Access International e-Journal - Included in the International Serial Directories.

International Research Journal of Management and Commerce (IRJMC) ISSN: (2348-9766) 99 | P a g e

International Research Journal of Management and Commerce Vol. 3, Issue 3, March 2016 IF- 3.861 ISSN: (2348-9766)

© Associated Asia Research Foundation (AARF)

Website: www.aarf.asia Email : editor@aarf.asia , editoraarf@gmail.com

IMPORTANCE OF E-SUPPLY CHAIN MANAGEMENT IN E-COMMERCE

Dr. Bhawana Rewadikar Asst. Prof. Department of Commerce Dr. H.S. Gour University Sagar (M.P.)

ABSTRACT

In today's global environment, every organisation, whether it wishes to be a global

player or not, has woken up to the fact that competition is no longer a regional or even a

national issue. The open economy is frantically shifting focus from regional and local

markets to global markets. While globalization does indeed open the doors to massive world

wide markets, it also creates a enormous pressure on to the supply chain management.

This paper aims to study the ways in which EC technologies can enhance the logistics

chain and improve organizational position vie-a vis the market forces. Therefore, Porter's

Competitive Analysis model, which studies the five forces that affect the firms position. has

been reworked in the current situation to show how EC technologies can effectively change

the dynamics of the situation.

Key words : E-procurement, Porter's Model

Introduction

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International Research Journal of Management and Commerce (IRJMC) ISSN: (2348-9766) 100 | P a g e resources and process knowledge.Today, the Internet has emerged as a most cost-effective medium of driving supply chain integration and e-Commerce as the intermediary between the Internet and supply chain , transforming the processes within the supply chain from procurement to customer management and product. In this paper, we search how e-commerce is changing supply chains and examining the rapidly evolving research in this area. The framework of Lee and Whang (2002c), we divide the various forms of e-Business applications into three categories e- Commerce." e- Procurement, and e-Collaboration (Figure-1).

Integration of e-SCM components with e-commerce

E-Commerce helps a network of supply chain partners to identify and react quickly to changing customer and market demand captured over the Internet. ' e-Procurement allows business organisations to use the Internet for procuring direct or indirect materials and handling value-added services like logistics, distribution, transportation, warehousing, customs clearing, payment, quality validation, and documentation. e-Collaboration facilitates coordination and integration of various activities of transactions supply chain intermediaries, suppliers and customers over the Internet to take wise decisions.

Literature Review

E-Commerce has had a deep impact on the supply chains of many products. Clearly, the supply chains of information goods have seen the most change (for example, see Dewan, Freimer, Seidmann (2000)). Companies and manufacturers of physical products have utilised the Internet as a direct channel of distribution.

Work on consumer related e-Commerce focused on the changes in distribution channels and the market pressure on prices' Earlier studies (Brynjolfsson and Smith (2000))

COMPANY'S CUSTOMER'S

SUPPLIER'S

e-Procurement

e-Commerce

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International Research Journal of Management and Commerce (IRJMC) ISSN: (2348-9766) 101 | P a g e found that prices in the late 1990s for homogeneous products like books and CDs were 10-15% lower in e-channels.

Pyke, Johnson, and Desmond (2001) explained the difficulties of executing e-fulfillment and develop a framework for evaluating the challenges of e fulfillment, e-procurement and e-collaboration for any specific product. Lee and Whang (2001) describe key lessons successful companies have used and present a framework for making e-fulfillment effective. Chen (2001) examines the issues about pricing and shipping methods. Using different prices an e-tailer can persuade some customers to wait for their e-orders and thus obtain some advanced demand information.

Objective :

(a) E-commerce helpful in changing the customer focus from the traditional outlook. (b) Coordination between the various trading elements is essential.

(c) How various components of logistics works with coordination. (d) Can customer get benefit from online technologies.

E-scm software :

Indeed we find various e-SCM software packages which support dynamic procurement strategies. These software products (e.g. Boradvision, Manugistics, Tradec, and instill) take real time data (e.g. inventory level, sales data, and market price at electronic exchanges) and provide the operational status and limited optimization capabilities.

Tempelmeir 2002 considers an optimization tool to shelp in dynamic and multi supplier selection offering various quantity discount schemes over time. The software formulates and solves a mathematical and operational programs and gives a fast solution which is proposed and tested heuristically. Further the solution procedure is implemented as part of SAPs Advanced Planner and Optimizer (APO) software.

Porters competitive Analysis Model :

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International Research Journal of Management and Commerce (IRJMC) ISSN: (2348-9766) 102 | P a g e Since the intensity or the strength of each factor in the model differs from one industry to another therefore the ultimate profit potential also differs with respect to industry. There now is an additional factor - Electronic Commerce that is now capable of transforming the nature of any industry by virtue of its effect on each force.

Porter’s value chain model:

Michael Porter’s value chain:

Porter’s classic model value chain to understand evolution of a finished product and its ultimate value in the supply chain. It allows a aerial view of the various costs incurred at every step of its movement towards the creation of value of the product or service offered.

“Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting its product. Each of these activities can contribute to a firm’s relative costs position and create a basis for differentiation. The value chain desegregates a firm

Industry Competitors Rivalry among Existing firms

Potential Entrants

Threat of New entrants

Bargaining power of buyers

Buyers

Substitutes Threat of New

Substitute Products or Service

Suppliers

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International Research Journal of Management and Commerce (IRJMC) ISSN: (2348-9766)

[image:5.842.92.795.71.469.2]

103 | P a g e Figure 3 Proter's Competitive Analysis Model.

Industry Competitors Rivalry among Existing firms Threats of new Entrants Industry Competitors Rivalry among Existing firms Industry Competitors Rivalry among Existing firms

EC inked frequent filer programmes The industry jokeying for position among Rivals EFTS EC enabied Discount Brokering

BP of suppliers in countered by permitting delivery limited fund flows

BP of suppliers increases of EC/EDI permits them to become global suppliers

EDI-enabled POST have created new entry barriers in mass retelling

EDI/EC enabled electronic Directories have eroded entry barriers and spawned new paradigm to

virtual retailing EC has increased B.P. of customers by permitting them world wide access to variety of products

ED/EC enabled CIM or ERP systems enable firms to counter BP of customer s by reducing lead times, increasing customisation EC/EDI technologies

also permit competitors to replicate innovative products faster EC/EDI enabled have

spawried substitutes by having virtual advert agencies

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International Research Journal of Management and Commerce (IRJMC) ISSN: (2348-9766) 104 | P a g e The Value System

into its strategically relevant activities in order to understand the behaviour of costs and the existing and potential sourses of differentiation. A firm gains competitive advantage by performing these strategically important activities more cheaply or better than its competitors.

EC Modified Supply chain:

The outlook to Supply Chain Management needs to be modified to ensure that each of components is enhanced. To achieve this, the following issues need to be addressed.

 Business processes and procedures, rules and regulations in the separate functional areas need to be studied and researched to assess the level of value addition it provides to the business transaction. Where EC can completely remove unnecessary procedures they should be discarded.

 Transportation, a very important function in the overall supply chain, needs to be treated as a separate criteria and delivery schedules coordinated in an overall picture to minimise backhaul miles and maximize purchasing and delivery leverage, which can be effectively done using GPS (Global Positioning system) and EDI (Electronic data inter change).

 Just-in-time (JIT) systems allow the manufacturing of products as and when required. This reduces inventory to decrease capital outlay in warehousing and inventory maintenance. This of course necessities the application of JIT principles using EDI and Computer Aided Engineering (CAE) strictly by using techniques that allow more accurate forecasting.

Supplier value

Chains Firm Value _Chain Channel value Chain

Buyer Value Chains

Up stream value

Firm value

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International Research Journal of Management and Commerce (IRJMC) ISSN: (2348-9766) 105 | P a g e  Outsourcing of tasks that add overheads and engage skilled human resources

that would be better employed elsewhere makes greater sense. Therefore, specialized selected suppliers for such tasks are encourages. These suppliers can be integrated into the larger supply Chain using Intranets and EDI.

 Changing the customer focus from the traditional outlook that is based on the demographic profile or the class or occupation to one that is based on fulfillment requirements. For e.g. the kind of delivery schedules the customer requires (organizations that replenish or procure supplies at hours peculiar to their trade-such as early hours of the day), merchandising support and value added services. This is already being done with the use of Internet and POST data.

 Logistics assets must be maintained across the supply chain not just within the enterprise, therefore cooperation and coordination between the various trading partners is essential. Again a combination of technologies like EDI, UPC, Bar Coding and EFT allows this.

 Customer management by organizing one window for information and customer service so that both the suppliers and the buyers as well as the user/customer can benefit from outline and immediate information. The internet and the other Outline technologies help to do this.

Benefits of E-scm in e-commerce

Improved Communication among partners, information sharing, better synchronization, smooth production flows shorter cycle imes reduced resources, by passing barriers of time and space leading to an improved customer satisfaction are all among the benefits of adopting e-SCM

 Higher sales of products  Reduce order-to-delivery time

 Reduce costs of manufacturing products.  Manage inventory more effectively.

 Improve demand forecasting of its customers.  Reduce time to introduce new products.

 Improve after market and post sales operational activities.

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International Research Journal of Management and Commerce (IRJMC) ISSN: (2348-9766) 106 | P a g e  Increase the speed of processing e-transactions.

 Reduce the cost of handling e-transactions.  Reduce errors in entering e-transaction data.  Share nformation about defectives and remedies. Conclusion

From the analysis of the two models of Porter, the entire supply chain can be tinkered with, by the use of Electronic Commerce, to achieve competitive advantage.

It is therefore clear that with the use of Electronic Commerce the way business is conducted will change forever. It speed up the entire transaction chain, provide accuracy and scope for differentiation from the competitors. It also allow for those procedures that do not add value to the product to become obsolete and therefore discarded, making the supply chain more seamless, integrated and efficient. Many organizations are already using quite a few of these technologies either in a stand-alone basis or in parts of the supply chain. This paper attempts to put forward the contention that by using all of these various technologies in tandem in the entire supply chain the full benefits of Electronic Commerce may be realized.

Reference:

 Bhaskarna, S. Simulation analysis of a manufacturing supply chaing, Decision Science 29(3) ,. 1998 pp 663-657.

 Brynjolfsson E, Kahin B. Understanding the Digital Economy, MIT Press Mssachusetts, 2000.

 Copacino, William. C., Supply Chain Management- The Basics and Beyond, The St. Lucie Press/Apics, series on Resource Management, 1997.

 Logistics and supply chain management, strategies for Reducing Cost and Improving service, Martin Christopher, Financial Times Pitman Publishing.

 Porter, M.E., Competitive Advantage, The free press, 1987

 William. C., Supply chain management- The basics and beyond. Copacino, The St. Lucie Press/Apics Series on Resource Management.