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E-Commerce and Supply Chain Management

This chapter discusses supply chain management and key related topics. It defines a supply chain and SCM, explores the bullwhip effect and how to counteract it, examines different types of e-commerce and factors affecting SCM, and covers sourcing, distribution, and performance measurement in supply chains. The chapter aims to explain the fundamental components and challenges of coordinating network activities to deliver products to customers.

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Honggeng Zhou
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© Attribution Non-Commercial (BY-NC)
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Download as PPT, PDF, TXT or read online on Scribd
28 views

E-Commerce and Supply Chain Management

This chapter discusses supply chain management and key related topics. It defines a supply chain and SCM, explores the bullwhip effect and how to counteract it, examines different types of e-commerce and factors affecting SCM, and covers sourcing, distribution, and performance measurement in supply chains. The chapter aims to explain the fundamental components and challenges of coordinating network activities to deliver products to customers.

Uploaded by

Honggeng Zhou
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Chapter 4 – E-Commerce and

Supply Chain Management

1
Learning Objectives
 The structure of supply chains
 The bullwhip effect
 E-commerce
 The factors affecting SCM
 Sourcing/purchasing
 Distribution
 Supply chain performance measures

2
Supply Chains & SCM
 A supply chain is the network of all the activities
involved in delivering a finished product/service to
the customer

 Supply Chain Management is the vital business


function that coordinates all of the network links
 Coordinates movement of goods and information

 External suppliers, internal functions, and external


distributors
3
A Basic Supply Chain

4
The Bullwhip Effect
 Bullwhip effect - the inaccurate or distorted demand
information created and amplified in the supply chain
 Causes are generated by:
 demand forecasting updating,

 order batching,

 price fluctuations,

 rationing and gaming

5
The Bullwhip Effect
 Counteracting the Effect:
 Change the way suppliers forecast product
demand by making this information available at
all levels of the supply chain
 Share real demand information (POS terminals)
 Eliminate order batching
 Stabilize pricing
 Eliminate gaming

6
Types of E-Commerce
 E-commerce is defined as the use of the
Internet and the Web to transact business

 Two types of e-commerce are


 Business-to-business (B2B) and
 Business-to-consumer (B2C)

7
SCM Factors
 Consumer Expectations and Competition
 Globalization

 Government Regulations

 Environment Implications

 Forecasting accuracy

 Exchange rates

 Infrastructure issues

8
Sourcing/purchasing
 Which products to produce in-house and which are provided
by other supply chain members

 Vertical integration – a measure of how much of the supply


chain is owned by the manufacturer

 Purchasing role has increased since material costs


represent 50-60% of cost of goods sold
 Ethics consideration
 Supplier relationships
 Determining how many suppliers to use
 Developing partnerships
9
Critical Factors in Successful
Partnership Relations

Have a long-term orientation Share a common vision


Are strategic in nature Share short/long term plans
Share information Driven by end-customer needs
Share risks and opportunities

 Benefits of Partnering
 Early supplier involvement (ESI) in the design process
 Using supplier expertise to develop and share cost
improvements and eliminate costly processes
 Shorten time to market
10
Supply Chain Distribution
 Warehouses

 Transportation consolidation

 Product mixing

 Crossdocking

11
Supply Chain Measurements
 Measuring supply chain performance
 Traditional measures include
 Return on investment
 Profitability
 Market share
 Revenue growth
 Additional measures
 Customer service levels
 Inventory turns
 Weeks of supply
 Inventory obsolescence
12
Chapter 4 Highlights
 Supply chains include all the processes needed to
make a finished product, from the extraction of raw
materials through the sale to the end user. SCM is
the integration and coordination of these efforts.

 The bullwhip effect distorts product demand


information passed between levels of the supply
chain. Variability results from updating demand
estimates at each level, order batching, price
fluctuations, and rationing
13
Chapter 4 Highlights (continued)

 B2B and B2C electronic commerce

 Factors affecting supply chain management

 Purchasing and sourcing

 Distribution

 Supply chain performance measures


14

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