1. E-Commerce and Supply Chain Management (SCM)
Chapter 4

2. Supply Chains
A supply chain is the network of activities that deliver a product/service to the customer
Sourcing (purchasing) of raw materials, parts, goods for sale, or service inventories
Order entry
Operations planning
Transformation process (manufacturing or services)
Quality management
Logistics:
Transportation (traffic)
Distribution (delivering the product to the customer)

3. Supply Chain for Furniture

4. Supply Chain Management (SCM)
Supply Chain Management is the business function that coordinates the movement of materials and information through the supply chain
Objectives of supply chain management
Minimize the cost of materials and material movement
Minimize inventory investment
Ensure timely delivery of materials at every level of the supply chain and to customers
Ensure quality of materials used in manufacturing or services

5. SCM in a Dairy Products Supply Chain

6. Information Sharing in the Supply Chain
Demand: sales forecasts, booked orders, and/or actual sales
Custom orders
Production plans
Product availability
Shipping schedules: items, quantities, delivery dates
Shipments
Suppliers' data on raw material quality

7. Reducing Inventory Costs in the Supply Chain
Channel assembly: Distributors or retailers assemble computers to order, with the manufacturer's brand name
Drop shipping: Amazon has publishers ship books directly to Amazon customers
Vendor-managed inventory: supplier owns the parts inventory at the customer's plant until the customer uses those parts.

8. Reducing Inventory Costs in the Supply Chain
Retailers transmit point-of-sale data to manufacturers, who ship what is needed.
Just-in-Time manufacturing
ERP II systems

9. Operations Issues in Online Sales
Inventory management
Customer service: product in stock or available for delivery
Inventory costs
Timely and cost-effective delivery
In manufacturing, this often requires short manufacturing lead times
Managing customer returns
25% of Internet orders result in a customer return
Variety of approaches used: mail, contract package delivery service, brick-and-mortar store

10. Global Supply Chain Issues
Different product requirements in different markets
Language barriers
Cross-cultural communication issues
Fluctuations in the value of money
Need for currency hedging
Poor telecommunication
Poor transportation

11. Global Supply Chain Issues (2)
Problems with global suppliers
Poor quality – ISO 9000 certification provides some assurance about supplier quality
Use of child labor
Failure to pay the local minimum wage
Supplier may copy your product designs and sell unauthorized copies of your product (piracy)

12. Make or Buy Decisions Firms usually do not outsource
Activities where they have a superior technology
Activities that contribute to a core competency
Firms often outsource to obtain superior materials or services, higher quality, lower costs, or superior product designs
Firms often outsource to avoid a major capital investment.
Choose suppliers whose products, quality, delivery, capacity, and service meet the firm's needs