SUPPLY CHAIN SYSTEMS

(ELES424)
Chapter one
 PART I

Introducing e-SCM
 e-Supply Chain Management/ Digital
Supply Chains
 E-supply chain management refers to the integration of internet-based
technologies and digital tools to enhance the efficiency and effectiveness of
supply chain management processes.

 In networked e-supply chains, information flows are integrated by the Internet

technology. Supply chain members are directly connected with customer
demands and real-time operational information of all supply chain stages.

 e-SCM is the use of technology to enhance business-to-business processes

and improve speed, agility, real-time control, and customer satisfaction.
 Traditional Supply Chain E-Supply Chain
-Focuses on production. -Focuses on customers.
-Gap between supply and demand. -Forecasting demand, market share.

-Limited visibility. -Higher visibility.

-Lack of real time data. -Efficient flow of information
-Increased inventory -Customized inventory
-More expected delay -Less delays
-Less responsive to changing market -More responsive to changing market
condition. condition.
 Principles of e-SCM

 Supply chains in an Internet-enabled environment should be

managed by :

 concentrating on their core business competence and contact with other

partners for the other functions.
 sharing common goals of the supply chain and operating as an integrated
system.
 recognizing and relying on interdependence of resources.
 Adding Values to e-Supply Chains

 Manufacturing supply chain management should focus on maximizing values

added to products to be delivered to customers.

 Values are mainly added by primary supply chain functions, such as inbound
logistics, production, outbound logistics, sales and post sale services.

 Information systems, finance and human resource management are supporting

activities which are input and infrastructure of the primary activities.

 The information systems are key activities for adding value to e-supply chains.
 Components of e-SCM (1)

1. Planning & Forecasting

• Demand Forecasting: Tools to predict customer demand based on historical data, market
trends, and analytics.
• Supply Planning: Determines how to meet forecasted demand by aligning production,
inventory, and resource allocation.
• Capacity Planning: Ensures the supply chain can handle future demand through optimized use
of resources.

2. Procurement
• e-Procurement: Automating the purchasing process, including supplier selection, order
management, and contract management using electronic platforms.
• Supplier Collaboration: Tools that enable real-time communication and collaboration with
suppliers, improving the efficiency of procurement processes.
 Components of e-SCM (2)

3. Inventory Management
• Real-Time Inventory Tracking: Digital tools like RFID and IoT sensors to provide real-time
visibility into stock levels.
• Automated Replenishment: Systems that automatically trigger reordering when inventory levels
fall below predetermined thresholds.

4. Production Management
• Manufacturing Execution Systems (MES): Software that monitors, controls, and optimizes
production processes in real time.
• Production Scheduling: Digital tools to schedule and track production runs, ensuring timely
output and adherence to delivery deadlines.
 Components of e-SCM (3)

5. Logistics & Distribution

• Transportation Management Systems (TMS): Software that optimizes the planning,
execution, and management of product transportation.
• Warehouse Management Systems (WMS): Tools for managing inventory within warehouses,
including tracking, picking, and shipping.
• Order Fulfillment & Tracking: Systems that enable real-time tracking of customer orders from
the warehouse to delivery, often through integration with third-party logistics providers (3PL).

6. Customer Relationship Management (CRM)

• Customer Engagement Platforms: Tools for managing customer interactions, gathering
feedback, and providing personalized experiences.
• Order Management Systems: Software that manages the entire order lifecycle from order
placement to delivery, providing real-time status updates.
 Components of e-SCM (4)

7. Supplier Relationship Management (SRM)

• Supplier Portals: Digital platforms that facilitate communication, contract management, and
performance tracking with suppliers.
• Supplier Performance Analytics: Tools that analyze supplier performance data to enhance
procurement decisions and supplier collaborations.

8. Data Integration & Analytics

• Big Data Analytics: Leveraging large data sets to gain insights into supply chain performance,
customer preferences, and market conditions.
• AI & Machine Learning: Tools that predict trends, optimize logistics, and automate processes
based on data-driven insights.
• Business Intelligence (BI) Tools: Dashboards and reporting systems to monitor key
performance indicators (KPIs) and improve decision-making.
 Components of e-SCM (5)

9. Collaboration Platforms
• Cloud-Based Collaboration: Platforms that allow stakeholders (suppliers, customers, internal
teams) to collaborate in real time, sharing information, and improving transparency across the
supply chain.
• Blockchain Technology: Used for secure and transparent tracking of goods, contracts, and
transactions across the supply chain.

10. Cybersecurity & Compliance

• Data Security Protocols: Ensuring the protection of sensitive supply chain data from cyber
threats through encryption, firewalls, and secure access controls.
• Compliance Management: Tools to monitor and ensure adherence to regulations, industry
standards, and trade policies.
 PART II

Information and Communication

Technologies (ICT) in SCM
 Pre-1970s: Manual Processes And Early
Computerization
•Manual systems dominated supply chain management during this period, with
paper-based record-keeping, basic telephone communication, and manual
inventory management.

•Early computer systems began to appear in large organizations, but their usage
was limited to internal functions like payroll and basic accounting. These systems
were not interconnected across the supply chain.

•Mainframe computers started being used for tasks like production scheduling,
but integration across different departments or companies was almost non-existent.
1970s: The Rise of Material Requirements
Planning (MRP)

•Material Requirements Planning (MRP) was one of the earliest forms of

computerized systems used in SCM. MRP systems focused on inventory control
and production scheduling.

•The key functions of MRP included demand forecasting, inventory management,

and procurement planning.

•These systems, however, were standalone and limited to manufacturing; they did
not integrate with suppliers or other business partners.
 1980s: Emergence of MRP II And
Introduction of EDI

•Manufacturing Resource Planning (MRP II) was an expansion of MRP that

included broader functions like financials and operational planning. It integrated
more areas of the business, including marketing, finance, and engineering.

•Electronic Data Interchange (EDI) emerged as one of the first tools to facilitate
communication between companies. EDI allowed organizations to electronically
exchange business documents (e.g., purchase orders, invoices) in a standardized
format.

•Although these technologies improved internal operations and communication

between firms, they still lacked real-time data sharing and global integration.
 1990s: The Advent of ERP Systems And
Globalization 0f Supply Chains

•Enterprise Resource Planning (ERP) systems were introduced in the 1990s,

revolutionizing the way organizations managed information across various functions.
ERP systems, such as SAP and Oracle, provided integrated platforms that allowed real-
time data sharing across departments like procurement, manufacturing, distribution, and
finance.

•ERP systems enabled organizations to coordinate activities across multiple sites and
functions, allowing better visibility and control over the entire supply chain.

•Globalization accelerated during this period, driving the need for better supply chain
coordination and management of complex, international networks.
2000s: Emergence of the Internet and
Collaborative Supply Chain Management

•The Internet became a key enabler of SCM in the 2000s, fostering global
communication and collaboration. Businesses began to adopt web-based applications
for supply chain processes, allowing real-time tracking of goods, sharing of
information, and better coordination across geographically dispersed teams.

•Collaborative Planning, Forecasting, and Replenishment (CPFR) became popular,

promoting collaboration between supply chain partners (suppliers, manufacturers,
and retailers) to optimize inventory levels and improve forecasting accuracy.

•Supply Chain Management Systems (SCM Systems) emerged as dedicated tools for
managing specific SCM activities such as inventory management, demand
forecasting, logistics, and supplier relationship management (SRM).
 2010s: Cloud Computing, Big Data, and
Integration with IoT
•Cloud computing transformed SCM by enabling the storage, processing, and sharing of
data across global supply chains in real-time. Cloud-based SCM platforms, such as
those offered by companies like SAP and Oracle, provided scalability and flexibility,
allowing businesses to quickly adapt to changing demands.

•Big Data and analytics began playing a significant role in supply chain management,
enabling better decision-making through data-driven insights. Companies started using
predictive analytics to optimize inventory, forecast demand, and manage risks more
effectively.

•The integration of Internet of Things (IoT) devices, such as sensors and RFID tags,
provided real-time tracking and monitoring of products in the supply chain. This improved
visibility and enhanced the management of assets, especially in logistics and warehousing.
 2020s and Beyond: AI, Machine Learning,
and Blockchain
•Artificial Intelligence (AI) and Machine Learning (ML) are now becoming integral to
SCM, automating processes such as demand forecasting, procurement, and supply chain
optimization. AI-powered tools help companies optimize their supply chain operations by
predicting market changes, improving efficiency, and minimizing disruptions.

•Blockchain technology is being adopted to enhance transparency and traceability in

supply chains. Blockchain ensures that all transactions are recorded in a ledger, which can
be accessed by all stakeholders in the supply chain, making it easier to verify product
authenticity and reduce fraud.

•Automation and autonomous technologies (e.g., drones, autonomous vehicles) are

starting to change logistics and delivery processes, making supply chains more efficient
and responsive to real-time demands.
 THANK YOU

For any questions, please send an email to:

Nancy.draz@aast.edu