E-Supply Chain Problems and Solutions

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Assignment – Digital Economy

Contents Page

1. Introduction3
2. Findings / Analysis4
2.1 Introduction to e-Supply Chain4
2.2 Problems of e-Supply Chain5
2.3 Solutions to e-Supply Chain problems using technology7
3. Conclusion9
4. References / Bibliography10

1. Introduction

The use of effective and efficient supply chain has its advantages. However, in order to deploy an effective and efficient supply chain, it is necessary to coordinate the flow of material, information and financial details among all the parties involved in the supply chain.

The coordination is not always perfect which create problems in the supply chain. Problems may come across the upstream level where sourcing or procurement from external suppliers is done. It may also be the case that the problem lies in the internal systems of the organisation where the packaging, assembly or manufacturing takes place. The problems may also arise in the downstream where the distribution takes place. The various problems that come across the supply chain are discussed in the next section.

Technology has help mankind to achieve what was thought to be impossible. The problems of supply chain can be solved using the technology developed. For example, in this internet era, the payment is done online with just a click. This process take just minutes which earlier would had taken days. Technology plays an important role solving the problems of supply chain which are discussed in the subsequent sections.

2. Findings / Analysis

2.1 Introduction to e-Supply Chain

As defined by Turban supply chain is the flow of materials, information, money and services from raw material suppliers through factories and warehouses to the end customers. E-supply chain refers to a supply chain that is managed electronically, usually with Web technologies.

The diagram below shows the model of material flow in a typical manufacturing firm. Model of Material Flow System of Typical Manufacturing Firm in Ethiopia (Abraham Debebe & Daniel Kitaw (2004), “Model Development of Supply Chain Management System- A Case Study on Meta Abo Brewery”, Ethiopian Society of Mechanical Engineers Journal). 2.2 Problems of e-Supply Chain

Supply chain is the most important part of any organisation. A good supply chain system can be the back bone of a competitive organisation, whilst if not managed properly it faces number of problems which are listed below.

a)Demand Forecasting and Order Fulfilment: A demand forecast is influenced by a number of factors, including consumer behaviour, economic conditions, competition, process, weather conditions, technological developments etc. Inaccurate demand forecasting creates situation where companies are unable to meet demand for certain products while having oversized and expensive inventories of other products. The classic example of 1999 case of toy orders which included companies like eToys, Amazon.com and ToysRUs. The massive advertising campaigns for Internet ordering which received an overwhelming response were not able to be fulfilled by the retailers who underestimated it. b)Slow and Error Prone Process: Large scale manufacturer’s line of supply chain for raw materials and manufactured products may involve many internal and external partners located in different places. Both material and information flow among several entities, especially when manually handled, can be slow and error prone. c)Logistics Infrastructure: Lack of efficient logistic infrastructure can prevent product and services to reach their destinations on time. d)Quality: Defective and low standard parts can create production delays, idling factories & workers and crimping inventories. e)External Logistics Services: Born-on-the-web companies have to depend on external logistics providers as they do not have their on logistic infrastructure. This can be expensive, requires more coordination and dependence on outsiders. f)Delivery...
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