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06/04/2016

E­COMMERCEFOREFFECTIVESUPPLYCHAINMANAGEMENT

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E­COMMERCEFOREFFECTIVESUPPLYCHAINMANAGEMENT

­ByM.S,S.Varadan

LeveragingIT Essentiallythethreedimensions,whichhavetobetakencareof,arecost,serviceandvelocity.Thecrucial factorsrelatetotheswiftandaccurateflowofinformationandcorrespondingactionstobetriggeredalong theSupplyChain.Withtheavailability or low costcommunicationmedia like the internet, itbecoming possibletoutilizethisforcuttingdowncostsandthatthesametimecarryingoutthebusinessactivitiesin aquickmannertomeetthecustomermeets.Thus,astrategicITinterventioncanbemadetoenhance competitiveadvantage.

The performance measures for an Effective Supply Chain are two­fold a) Non­Financial Performance Measuresandb)FinancialPerformanceMeasures.AmongtheNon­FinancialMeasuresarei)CycleTimeii) CustomerServiceLeveliii)InventoryLevels.AmongtheFinancialMeasures,themainonesarei)costof rawmaterialii)InventoryCostsandiii)Transportation.Inthehighlycompetitiveenvironmenttoday,cost reductionassumes a major importance. The questionthereforeis how touse Electronic Commerce for cuttingdowncosts?

GrowthofB2BE­commerce

ArecentNASSCOMsurveyrevealsthate­businesstransactionsareexpectedtoreachRs.3500croresby

2001and out of this as muchas Rs. 3200 crore would comprise B2B transactions. With the requisite regulatoryframeworkinplaceandhopefullytelecominfrastructureimproving,e­commerstransactionsare

expectedtowelltoRs.15000croreby2000.

ThebigadvantageofB2Be­commerceisitscontributiontoreductionincosts.Firstly,themosteconomical

supplier canbe locatedquickly andthe costof processingtransactions is reducedCompanieslikeIBM report savings of billions of dollars in material acquisitioncost. Automobile giants like Ford, CM and ChrysleraresettingupjointexchangetobuycomponentsfromsuppliersovertheInternet.Onthenew economyfrontcompanieslikeDell,Ciscoisalsodoinglikewise.

WhattheB2Bportalsattempttodoistoprovideasimilarplatformforthebusinessprocessesaswould

happennormally.Forexample,abuyercangotoaWebsiteandcansearchandlocatetherightproducts

andsuppliers.Ofcourse,forthesearchitselftobedoneinreasonabletime,powerfulsearchenginesare

necessaryandthisiswhattheportalsprovide.Also,requestforquotationsandcomparisonofcompetitive

quotescanIbedoneandultimatelyeventheorderscanbeplaced"on­line".Theactualpaymentforthe

goodsisstilltheconventionalpaymentsystemsbuteventhismaychangeinfuture.Fromthesuppliers

pointofview,useofportalhelpshimtoreachouttomorepotentialcustomers.

The major benefits of using horizontal 82B portals are i) withthe greater and speedier availability of vendor information, the time for locating and evaluating Suppliers is much reduced ii) Better pricing throughaccesstovastsupplierbaseandavailingofdiscountsiii)ReducingthecycletimeinSupplyChain Managementandiv)LowerInventorycontributingtoreducethecosts.Overall,itresultsinsubstantially loweringtheprocurementcosts.TheGoldmanSachsreportstatesthatdoingbusinesswithsupplierson­ line could reduce the cost of making a car as much as 14 percent. Industries like automobiles, manufacturingandretailamongothershavepotentialtobenefitimmenselythroughthisapproach.

NeedforQuality ThestressonqualityovertheentireSupplyChainiscriticaltosuccessespeciallyinthee­commercearena where the time for transaction is drastically reduced. Ensuring quality in every link of the chain is necessary,asthechainisonlyasstrongasitsweakestlink.Soqualityistobeembeddedineverylinkof thesupplychain.Whenthishappens,theinternet'sbenefitsasaneffectivemediumofcommercewillbe trulyrealized.AstheNationalPresidentofIIMM,V.K.Jainstates"CompetitivenessoftheSupplyChainis evidencedinthemarketplacethroughtheChainofferings.Whatisvisibletotheultimatecustomeristhe finalbrand;however,everyelementofthechaincontributestothesuccessofthebrandthatisidentified inthemarketwiththechain".

IntheB2Benvironment,smallandmediumenterprisesare­verymuchapartoftheotherwisecascading

effectofnon­compliancesinqualitycanbedisastrous.Hencequalityassurancemeasuresallthroughthe supplychainareavitalaspectandnottobemissed,amidstthemulti­tiervendorstructures.Oneneedsto effectivelycontrol the critical points, as quality assurance measures all throughthe supply chainis an aspectthatisvitalandnottobemissed,amidstthegrowinghypeaboute­commerce.

06/04/2016

E­COMMERCEFOREFFECTIVESUPPLYCHAINMANAGEMENT

EducationalProgrammes

IIMMhas30branchesand19chaptersalloverIndiaanditsmembershipcomprisesof8000individualsand

institutions. IMAA conducts very popular programmes for the working professional. These days more emphasisisbeinggiventoe­Commerce,SupplychainManagementanddoinginternationalbusinessinthe e­way.Hands­onexperienceintheITusageisprovided.IIMMalsoplanstointroducetheE­examination systeminthefirstphaseandgoforwebbasedlearningmethodologysubsequently,toimpartknowledgein aconvenientanduserfriendlymanner.Thesedevelopmentprogrammesforyoungandupcomingmaterials managementprofessionalswillhelpbuildlargeandcompetenthumanresourcesbase,whichwillultimately formthebed­rockforsuccessfule­commerce.

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