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Supply chain management (SCM)

Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm. t is said that the ultimate goal of any effective supply chain management system is to reduce inventory . Supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. t also includes the crucial components of coordination and collaboration with channel partners, which can be suppliers, intermediaries, third!party service providers, and customers. n essence, supply chain management integrates supply and demand management within and across companies Supply chain management flows can be divided into three main flows"

The product flow :#he product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow : #he information flow involves transmitting orders and updating the status of delivery The finances flow: #he financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements.

#here are two main types of SCM software" Planning applications : $lanning applications use advanced algorithms to determine the best way to fill an order. Execution applications. %xecution applications trac& the physical status of goods, the management of materials, and financial information involving all parties.

#he following are five basic components of SCM. '. Plan(#his is the strategic portion of SCM. Companies need a strategy for managing all the resources that go toward meeting customer demand for their product or service. ) big piece of SCM planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high *uality and value to customers. +. Source(,ext, companies must choose suppliers to deliver the goods and services they need to create their product. #herefore, supply chain managers must develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. )nd then, SCM managers can put together processes for

managing their goods and services inventory, including receiving and verifying shipments, transferring them to the manufacturing facilities and authorizing supplier payments. 3. Make(#his is the manufacturing step. Supply chain managers schedule the activities necessary for production, testing, pac&aging and preparation for delivery. #his is the most metric!intensive portion of the supply chain(one where companies are able to measure *uality levels, production output and wor&er productivity. 4. Deli er(#his is the part that many SCM insiders refer to as logistics, where companies coordinate the receipt of orders from customers, develop a networ& of warehouses, pic& carriers to get products to customers and set up an invoicing system to receive payments. !. "eturn(#his can be a problematic part of the supply chain for many companies. Supply chain planners have to create a responsive and flexible networ& for receiving defective and excess products bac& from their customers and supporting customers who have problems with delivered products #. $ost()ll these activities or components adds to the total cost heavily in some cases if , li&e in previous or early days were handled manually.

Enterprise Resource Planning (ERP )


%-$ (enterprise resource planning) is an industry term for the broad set of activities that helps a business manages the important parts of its business. t.s complete integrated business management software, which captures data in chronological order, and is used to lin& businesses processes automatically, and give real time information, to authorized user. t is a multi!user, multi!location, and multi!company, software solution. #he information made available through an %-$ system provides visibility for &ey performance indicators re*uired for meeting corporate ob/ectives. %-$ software applications can be used to manage product planning, parts purchasing, inventories, interacting with suppliers, providing customer service, and trac&ing orders. %-$ can also include application modules for the finance and human resources aspects of a business. #ypically, an %-$ system uses or is integrated with a relational database system. )n %nterprise -esource $lanning system is pac&aged business software system that allows a company to" 0 )utomate and integrate the ma/ority of its business processes. 0 Share common data and practices across the entire enterprise. 0$roduce and access information in a real!time environment.

%enefits of E"P
Decision support:$rovides cross!functional information on business performance to assist managers in ma&ing better decisions Enterprise agilit&"-esults in more flexible organizational structures, managerial responsibilities, and wor& roles "esource 'ntegration"1elps in integrating resources in an efficient and effective manner and mprove resource utilization (thers: 2etter analysis and planning capabilities. 3n time delivery -eduction of lead and cycle time 2etter customer satisfaction mproved supplier performance 1igh security 2ac&up of data.

Customer Relationship Management (CRM)


C-M stands for Customer -elationship Management. t is a process or methodology used to learn more about customers4 needs and behaviors in order to develop stronger relationships with them. #here are many technological components to C-M, but thin&ing about C-M in primarily technological terms is a mista&e. #he more useful way to thin& about C-M is as a process that will help bring together lots of pieces of information about customers, sales, mar&eting effectiveness, responsiveness and mar&et trends. C-M helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. C-M is a combination of policies, processes, and strategies implemented by an organization to unify its customer interactions and provide a means to trac& customer information. t involves the use of technology in attracting new and profitable customers, while forming tighter bonds with existing ones.C-M includes many aspects which relate directly to one another" 5ront office operations ( 6irect interaction with customers, e.g. face to face meetings, phone calls, e!mail, online services etc.

2ac& office operations ( 3perations that ultimately affect the activities of the front office (e.g., billing, maintenance, planning, mar&eting, advertising, finance, manufacturing, etc.) 2usiness relationships ( nteraction with other companies and partners, such as suppliers7vendors and retail outlets7distributors, industry networ&s (lobbying groups, trade associations). #his external networ& supports front and bac& office activities. )nalysis ( 8ey C-M data can be analyzed in order to plan target!mar&eting campaigns, conceive business strategies, and /udge the success of C-M activities (e.g., mar&et share, number and types of customers, revenue,profitability).

$roponents of C-M software claim that it not only allow customer relationships to be managed more efficiently, but also encourages a more customer!centric approach to conducting business

Electronic commerce
%lectronic commerce, commonly &nown as (electronic mar&eting) e!commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the nternet and other computer networ&s. t refers to a wide range of online business activities for products and services. t also pertains to 9any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.: #he amount of trade conducted electronically has grown extraordinarily with widespread nternet usage. #he use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, nternet mar&eting, online transaction processing, electronic data interchange (%6 ), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the ;orld ;ide ;eb at least at some point in the transaction4s lifecycle, although it can encompass a wider range of technologies such as e!mail as well. ) large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. 3nline retailers are sometimes &nown as e!tailers and online retail is sometimes &nown as e!tail. )lmost all big retailers have electronic commerce presence on the ;orld ;ide ;eb. %lectronic commerce that is conducted between businesses is referred to as business!to! business or 2+2. 2+2 can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre!*ualified participants (private electronic mar&et). %lectronic commerce that is conducted between businesses and consumers, on the other hand, is referred to as business!to!consumer or 2+C. #his is the type of electronic commerce conducted by companies such as )mazon.com.

%lectronic commerce is generally considered to be the sales aspect of e!business. t also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions. 6ifferent types of %!Commerce" business!to!business (2+2)< business!to!consumer (2+C)< business!to!government (2+=)< consumer!to!consumer (C+C) mobile commerce (m!commerce). Some common applications related to electronic commerce are the following"

%mail %nterprise content management nstant messaging ,ewsgroups 3nline shopping and order trac&ing 3nline ban&ing 3nline office suites 6omestic and international payment systems Shopping cart software #eleconferencing %lectronic tic&ets

)d antages: 2usiness ! +> 1rs x ?@A days )ccess the global mar&etplace Speed Mar&et space 3pportunity to reduce cost ndependent Computer platform %fficient application development environment

Customer self service

Ma*or pla&ers for successful E+$ommerce ) typical e!commerce transaction loop involves the following ma/or players and corresponding re*uisites"

#he Seller should have the following components" ) corporate ;eb site with e!commerce capabilities (e.g., a secure transaction server)< ) corporate intranet so that orders are processed in an efficient manner< and #!literate employees to manage the information flows and maintain the e! commerce system.

Transaction partners include: 2an&ing institutions that offer transaction clearing services (e.g., processing credit card payments and electronic fund transfers)< ,ational and international freight companies to enable the movement of physical goods within, around and out of the country. 5or business!to!consumer transactions, the system must offer a means for cost! efficient transport of small pac&ages (such that purchasing boo&s over the nternet, for example, is not prohibitively more expensive than buying from a local store)< and )uthentication authority that serves as a trusted third party to ensure the integrity and security of transactions. $onsumers ,in a -usiness+to+consumer transaction. who: 5orm a critical mass of the population with access to the nternet and disposable income enabling widespread use of credit cards< and $ossess a mindset for purchasing goods over the nternet rather than by physically inspecting items. /irms0%usinesses ,in a -usiness+to+-usiness transaction. 5irm that together form a critical mass of companies (especially within supply chains) with nternet access and the capability to place and ta&e orders over the nternet. 1o ernment2 to esta-lish: ) legal framewor& governing e!commerce transactions (including electronic documents, signatures, and the li&e)< and Begal institutions that would enforce the legal framewor& (i.e., laws and regulations) and protect consumers and businesses from fraud, among others. 'nternet2 the successful use of which depends on the following: ) robust and reliable nternet infrastructure< and ) pricing structure that doesn.t penalize consumers for spending time on and buying goods over the nternet (e.g., a flat monthly charge for both S$ access and

local phone calls).

E-business (electronic business),


%!business derived from such terms as Ce!mailC and Ce!commerce,C is the conduct of business on the nternet, not only buying and selling but also servicing customers and collaborating with business partners. #he use of electronic chat as a form of technical and customer support is an excellent example. )n e!business which uses chat to supplement its traditional phone support finds a system which saves incredible amounts of time while providing opportunities unavailable through traditional support. 2y using virtual computer systems, for example, technical support operators can remotely access a customer4s computer and assist them in correcting a problem. Ma/or corporations are rethin&ing their businesses in terms of the nternet and its new culture and capabilities. Companies are using the ;eb to buy parts and supplies from other companies, to collaborate on sales promotions, and to do /oint research. E+commerce 3s E+%usiness ;hile some use e!commerce and e!business interchangeably, they are distinct concepts. n e!commerce, information and communications technology is used in inter!business or inter!organizational transactions and in business!to!consumer transactions . n e!business, on the other hand, information and communications technology is used to enhance one.s business. t includes any process that a business organization (either a for! profit, governmental or non!profit entity) conducts over a computer!mediated networ&. ) more comprehensive definition of e!business is" 9#he transformation of an organization.s processes to deliver additional customer value through the application of technologies, philosophies and computing paradigm of the new economy.:

Knowledge Management
4nowledge management ,4M. comprises a range of practices used in an organization to identify, create, represent, distribute and enable adoption of insights and experiences. Such insights and experiences comprise &nowledge, either embodied in individuals or embedded in organizational processes or practice. 8M efforts typically focus on organizational ob/ectives such as improved performance, competitive advantage, innovation, the sharing of lessons learned, and continuous improvement of the organization. 8M efforts overlap with organizational learning, and may be distinguished from that by a greater focus on the management of &nowledge as a strategic asset and a focus on encouraging the sharing of &nowledge. 8M efforts can help individuals and groups to share valuable organizational insights, to reduce redundant wor&,to reduce training time for new employees, to retain intellectual capital as employees turnover in an organization, and to adapt to changing environments and mar&ets. Why should you apply Knowledge Management?

#o serve customers well and remain in business companies must" reduce their cycle times, operate with minimum fixed assets and overhead (people, inventory and facilities), shorten product development time, improve customer service, empower employees, innovate and deliver high *uality products, enhance flexibility and adaptation, capture information, create &nowledge, share and learn. ,one of this is possible without a continual focus on the creation, updating, availability, *uality and use of &nowledge by all employees and teams, at wor& .

usiness !ntelligence
%usiness 'ntelligence (%') refers to s&ills, processes, technologies, applications and practices used to support decision ma&ing. 2 technologies provide historical, current, and predictive views of business operations. Common functions of 2usiness ntelligence technologies are reporting, 3B)$, analytics, data mining, business performance management, benchmar&ing, text mining, and predictive analytics. 2usiness ntelligence often aims to support better business decision!ma&ing. #hus a 2 system can be called a decision support system(6SS). 3ften 2 applications use data gathered from a data warehouse or a data mart. 1owever, not all data warehouses are used for business intelligence nor do all business intelligence applications re*uire a data warehouse.

Data warehouse is a repository of an organization4s electronically stored data. 6ata


warehouses are designed to facilitate reporting and analysis. ) data warehouse houses a standardized, consistent, clean and integrated form of data sourced from various operational systems used in the organization, structured in a way to specifically address the reporting and analytic re*uirements. #his definition of the data warehouse focuses on data storage. 1owever, the means to retrieve and analyze data, to extract, transform and load data, and to manage the data dictionary are also considered essential components of a data warehousing system. Many references to data warehousing use this broader context. #hus, an expanded definition for data warehousing includes business intelligence tools, tools to extract, transform, and load data into the repository, and tools to manage and retrieve metadata. ) data mart is a subset of an organizational data store, usually oriented to a specific purpose or ma/or data sub/ect that may be distributed to support business needs. 6ata

marts are analytical data stores designed to focus on specific business functions for a specific community within an organization. 6ata marts are often derived from subsets of data in a data warehouse, though in the bottom-up data warehouse design methodology the data warehouse is created from the union of organizational data marts.