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Unit 13: Supply Chain Management and JIT

incumbents, e-commerce will require broad changes in organizational approach and structure, Notes
as well as in skills, mindset, human resources, and measures of economic success. Many will
have to cannibalize existing businesses or channels and risk de-motivating the traditional
organization while building the new.
Success will involve piloting new approaches, mastering new technologies, challenging
conventional market definitions, surviving an initial period of low revenues, and perhaps
cannibalizing core businesses. But the potential rewards are great – a new platform and set of
tools for competing in a new and dynamic marketplace.
The business processes and decision support systems have a direct impact on the costs and
revenue of organizations. However, many companies that own information think it gives them
a crucial competitive advantage and therefore fear sharing it freely. This information might
include supply-and-demand forecasts, reports of inventory levels at points along the supply
chain, and market-tested predictions, the price of futures, etc. Such information would benefit
companies up and down the supply chain.
Exchanges will deliver all their benefits, when the idea of confiding financial data to an exchange
does not generate skepticism.

Example: Dell Computer and Wal-Mart, derive a competitive advantage from their
exclusive collaborations and from the proprietary sharing of information with their suppliers.
E-marketplaces have encountered problems in seeking to streamline tasks (such as production
planning, inventory control, and scheduling) that lie closer to the heart of supply chain
management. To devise solutions, it will be necessary to analyze what exchanges can and can't
do. They will never reduce the time it takes to deliver goods physically. But since the information
flow in supply chains is typically linear, fragmented, and inaccurate, they can make a vast
difference in this area.

Consortia, stand-alone marketplaces, and perhaps other, as yet undeveloped online structures
hold out the promise of facilitating every kind of collaboration between buyers and sellers.
Such marketplaces might even help buyers and sellers partially integrate their operations,
allowing them to improve their supply chains, and to work jointly on product designs, as is
already apparent from developments like world-wide sourcing.
The unifying feature of collaboration on this model is the sharing of real time information and
building sustainable partnerships.

Task Give examples of any two companies that have pioneered in e commerce and
mention the products which they deal in. Also give a brief about their high
selling products.

13.6 Requirements for Supply Chain Management

There are two major forces that drive the supply chain management. First, is that there is the
new communications technology available now that allows managers to actively manage a
supply chain. Second, customers are demanding lower prices and better products and services.
To meet their customers' demands, firms are optimizing the entire supply chain. Supply chain
management allows all the firms in a supply chain to look beyond their own objectives to the
objective of maximizing the final customer's satisfaction. The payoff for supply chain members
that can do this is increased profits for their shareholders.

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