SUPPLY CHAIN SYSTEMS

(ELES424)
Chapter two
 Information And Communication
Technologies (ICT) in e-SCM

 ICT plays a crucial role in e-SCM by enabling efficient, integrated, and

real-time processes across the supply chain.

 The integration of ICT into e-SCM not only enhances operational

efficiency but also supports strategic goals such as customer
satisfaction, cost leadership, and sustainability.
 The Impact of ICT in –SCM (1)

1. Improved Communication and Collaboration

• ICT facilitates seamless communication between supply chain partners, such as suppliers,
manufacturers, distributors, and customers.
• It allows for real-time information sharing, leading to better coordination, reduced delays, and
enhanced decision-making.
• Collaborative platforms like cloud-based systems enable multiple partners to work together
on shared data, improving responsiveness to market changes.

2. Enhanced Visibility and Transparency

• ICT tools like ERP, WMS, and TMS provide real-time visibility into inventory levels, order
status, and shipment tracking.
• It helps in detecting and mitigating potential issues quickly, thus reducing risks and
uncertainties in the supply chain.
 The Impact of ICT in –SCM (2)

3. Optimized Inventory Management

• ICT enables more accurate forecasting and demand planning using data analytics and
predictive modeling.
• It allows for automated inventory tracking, reducing the likelihood of stockouts or
overstocking.
• Inventory management software can automatically trigger reorder points, ensuring optimal
inventory levels and reducing carrying costs.

4. Cost Reduction
• By automating processes such as order processing, invoicing, and inventory management,
ICT reduces manual labor and administrative costs.
• ICT systems can optimize logistics and transportation routes, leading to lower fuel
consumption and shipping costs.
• Streamlined communication reduces costly errors and delays.
 The Impact of ICT in –SCM (3)

5. Agility and Flexibility

• ICT allows supply chains to be more adaptable to changing market conditions, such as
fluctuations in demand, supply disruptions, or new regulations.
• Businesses can quickly adjust their supply chain strategies, such as sourcing from different
suppliers or altering distribution channels.

6. Data Analytics and Decision-Making

• ICT supports the collection and analysis of large datasets (Big Data) from various stages of
the supply chain.
• Advanced analytics and AI tools can provide insights for better decision-making regarding
sourcing, production, and distribution strategies.
• Data-driven insights help companies optimize their processes, enhance customer satisfaction,
and gain a competitive advantage.
 The Impact of ICT in –SCM (4)

7. Improved Customer Service

• With ICT-enabled e-SCM, companies can offer better customer service through accurate
order tracking, fast deliveries, and efficient returns management.
• CRM systems integrated with the supply chain enable personalized service and feedback
management.
 ERP systems

ERP systems act as the backbone of e-SCM, enhancing coordination

and efficiency across the entire supply chain.
They enable organizations to manage complex operations with greater
accuracy, agility, and insight, resulting in improved decision-making
and competitive advantage.
 Benefits of ERP systems in e-SCM (1)

1. Integration of Business Processes

• ERP systems unify different functions such as procurement, production, sales, distribution, finance,
and human resources into a single integrated platform.
• This integration helps in streamlining processes, ensuring that data from one department is accessible
to others, thereby improving collaboration and communication across the supply chain.

2. Enhanced Data Visibility and Transparency

• ERP systems provide real-time visibility into inventory levels, order status, production schedules, and
financials across the entire supply chain.
• This transparency enables companies to track the flow of goods, services, and information, allowing
for quicker response to market demands or supply chain disruptions.
 Benefits of ERP systems in e-SCM (2)

3. Inventory Management and Optimization

• ERP systems help in managing inventory by providing accurate, real-time data on stock levels, sales
trends, and demand forecasts.
• Automated inventory management features can optimize reorder points and safety stock levels,
reducing excess inventory and minimizing stockouts.

4. Demand Planning and Forecasting

• ERP systems use historical data and current trends to forecast demand more accurately, which is
critical for production planning and procurement.
• Improved forecasting helps reduce the risk of overproduction or underproduction, aligning supply
chain activities with actual market demand.
 Benefits of ERP systems in e-SCM (3)

5. Procurement and Supplier Management

• ERP systems facilitate the procurement process by automating purchase orders, supplier
evaluations, and contract management.
• Integration with suppliers enables seamless communication, ensuring timely delivery of raw
materials and components and supports strategic sourcing decisions by providing insights into
supplier performance, cost analysis, and market trends.

6. Production Planning and Control

• ERP systems help in scheduling and coordinating production activities, ensuring that resources
(materials, labor, machinery) are allocated efficiently.
• Real-time monitoring of production processes helps detect any deviations from the plan,
enabling quick corrective actions to minimize downtime.
 Benefits of ERP systems in e-SCM (4)

7. Logistics and Distribution Management

• ERP systems support the management of warehousing, order fulfillment, and transportation
logistics.
• They help optimize shipping routes, track deliveries, and manage returns, ensuring that
products reach customers on time and reducing transportation costs.

8. Financial Management and Cost Control

• ERP systems integrate financial data with operational processes, providing a comprehensive
view of the company’s financial performance.
• They help in cost tracking, budgeting, and financial reporting, which are essential for
companies to control supply chain expenses and improve profitability.
 Benefits of ERP systems in e-SCM (5)

9. Improved Customer Service

• ERP systems provide insights into customer preferences, order history, and service requests.
• They enable more accurate order processing and timely delivery, leading to higher customer
satisfaction.

10. Support for Regulatory Compliance and Reporting

• ERP systems facilitate compliance with industry regulations and standards by providing
accurate, up-to-date records of transactions and processes.
• They help in generating the necessary reports for audits, quality control, and regulatory
submissions.
 CRM in e-SCM

 Customer Relationship Management (CRM) and e-SCM are interconnected and

mutually influential in shaping how businesses deliver value to customers and
manage their supply chain operations.

 The integration of CRM and e-SCM results in a customer-driven supply chain that
not only focuses on operational efficiency but also prioritizes customer satisfaction.

 When effectively combined, they enable businesses to create a responsive, flexible,

and cost-effective supply chain that adapts to customer demands while driving
growth and profitability.
 The Relationship between CRM and e-
SCM(1)
1. Customer-Centric Supply Chain Strategy
• The primary goal of CRM is to enhance customer satisfaction and loyalty by understanding and
addressing customer needs.
• CRM provides insights into customer preferences, purchasing patterns, and service requirements,
which can inform e-SCM strategies such as inventory management, demand forecasting, and
production planning.
• By aligning the supply chain with customer needs, businesses can optimize order fulfillment, reduce
lead times, and deliver a more personalized service.
2. Improving Demand Forecasting and Planning
• CRM systems capture valuable customer data such as order history, buying behavior, and feedback,
which can be used to improve demand forecasting and production planning.
• The integration of CRM data into e-SCM enables more precise demand planning, ensuring that the right
products are available at the right time and in the right quantities.
 The Relationship between CRM and e-
SCM(2)
3. Enhanced Order Fulfillment and Delivery
• CRM helps companies manage the entire order lifecycle, from order placement to fulfillment and after-
sales support. This requires close coordination with e-SCM processes such as inventory management,
warehousing, and transportation.
• By integrating CRM with e-SCM, companies can streamline order processing, track delivery status, and
manage returns more efficiently.
• This leads to higher customer satisfaction by providing accurate order status updates, faster deliveries,
and efficient handling of returns or exchanges.

4. Personalized Service and Customer Experience

• CRM systems enable businesses to tailor their services based on customer profiles, preferences, and
buying habits. e-SCM must be flexible enough to support custom orders, special delivery requests, or
unique product configurations.
• By delivering a personalized experience, companies can build stronger customer relationships and gain a
competitive edge in the market.
 The Relationship between CRM and e-
SCM(3)
5. Feedback Loop for Continuous Improvement
• Customer feedback collected through CRM systems provides valuable insights for improving
supply chain processes. Complaints about delivery delays, product quality, or service issues
can be addressed by making necessary adjustments in e-SCM.
• e-SCM uses this feedback to enhance inventory management, production quality, and logistics
strategies to better meet customer expectations.
6. Optimizing Inventory Management Based on Customer Data
• CRM data helps in identifying which products are popular, seasonal trends, and customer
buying cycles.
• e-SCM uses this data to adjust stocking strategies, ensuring that high-demand products are
always available while minimizing excess inventory for slow-moving items.
• The synchronization of CRM and e-SCM reduces the risk of stockouts, decreases carrying
costs, and improves cash flow management.
 The Relationship between CRM and e-
SCM(4)
7. Efficient Handling of After-Sales Services and Returns
• CRM is involved in managing after-sales services, such as warranties, repairs, and returns, which require
effective coordination with e-SCM.
• e-SCM supports after-sales activities by managing reverse logistics processes, including return
shipments, restocking, and disposal.
• Integrating CRM with e-SCM ensures that returns are processed smoothly, replacements are shipped
promptly, and customer service representatives have access to the necessary information to resolve
customer issues.

8. Enhancing Supply Chain Agility and Responsiveness

• Customer demand can fluctuate due to seasonal changes, marketing campaigns, or unexpected events.
CRM helps businesses detect these changes in customer behavior, while e-SCM adjusts supply chain
processes to respond quickly.
• The integration of CRM and e-SCM allows for flexible adjustments to production schedules, inventory
levels, and logistics plans, ensuring the supply chain can adapt to changing customer needs.
 The Relationship between CRM and e-
SCM(5)
9. Enabling Collaborative Planning and Forecasting
• CRM provides a platform for better collaboration between sales, marketing, and supply chain teams by
sharing customer insights and demand forecasts.
• e-SCM uses these insights for collaborative planning with suppliers, manufacturers, and logistics
partners, allowing the entire supply chain to be more aligned with customer needs.
• Joint planning and forecasting based on CRM data help reduce uncertainty in the supply chain and
improve overall efficiency.

10. Improving Cost Efficiency and Profitability

• By understanding customer needs and preferences through CRM, companies can optimize supply chain
processes to focus on value-added activities.
• e-SCM can reduce costs by minimizing waste, optimizing inventory levels, and improving logistics
efficiency, all of which contribute to higher profit margins.
Data analytics and Business Intelligence in
e-SCM

 Business Intelligence (BI) and Data Analytics play a crucial role in

enhancing e-SCM by providing valuable insights, enabling data-driven
decision-making, and optimizing various supply chain processes.

 Incorporating Business Intelligence (BI) and Data Analytics into e-SCM

empowers companies to make smarter, faster, and more strategic decisions.
 BI and data analytics significance in e-
SCM(1)
Point Benefit
-Enhanced Visibility and This transparency helps identify potential disruptions or inefficiencies and allows for quick
Transparency adjustments to maintain smooth operations.
-Data-Driven Decision- Enables more accurate and efficient decision-making based on insights from historical data,
Making market trends, and predictive analytics.
-Demand Forecasting and Improves accuracy in demand forecasting, leading to better alignment of inventory and
Planning production with expected sales, thereby reducing stockouts and excess inventory.

-Inventory Optimization Reduces carrying costs, minimizes stockouts, and optimizes inventory turnover by ensuring
the right products are available in the right quantities at the right time.

-Logistics and Enhances delivery speed, reduces fuel consumption, and lowers transportation costs by
Transportation identifying the most efficient routes and logistics strategies.
Optimization
 BI and data analytics significance in e-
SCM(2)
Point Benefit
-Risk Management and Addressing these risks helps maintain supply chain continuity and reduces the impact of
Disruption Mitigation disruptions on business operations.

-Cost Reduction and Enables companies to reduce operational costs and improve efficiency by eliminating waste,
Efficiency Improvement optimizing processes, and automating routine tasks.

-Customer Insights and Allows businesses to tailor their supply chain strategies to better meet customer needs, improve
Service Improvement service levels, and increase customer satisfaction.

-Supplier Performance Helps in selecting the best suppliers, negotiating better terms, and improving supplier
Analysis relationships by addressing performance issues promptly.
 BI and data analytics significance in e-
SCM(3)
Point Benefit
-Predictive and Prescriptive Enables proactive planning and optimization of supply chain operations, ensuring that
Analytics businesses are prepared for future scenarios.

-Supply Chain Performance Helps track progress towards business goals, measure the impact of changes, and drive
Monitoring continuous improvement.

-Fraud Detection and Enhances security and ensures that all supply chain activities comply with regulatory
Compliance standards.

-Collaborative Decision- Improves collaboration across departments, suppliers, and partners, leading to better-
Making coordinated supply chain strategies.
 Supply chain management software and
platforms

 SCM software and platforms are tools designed to help

businesses manage, optimize, and automate their supply chain
processes. These solutions cover various aspects of the supply
chain, including procurement, production, inventory
management, logistics, and customer service.
 Main supply chain software capabilities (1)

Demand Planning and • More accurate demand forecasts help align production and
Forecasting inventory levels with expected sales, reducing the risk of
stockouts and excess inventory.

Inventory Management • Improved inventory management reduces carrying costs,

minimizes waste, and ensures that products are available when
needed.

• Streamlines procurement processes, ensures compliance with

Procurement Management supplier agreements, and optimizes spending on materials and
services.
 Main supply chain software capabilities (2)

Logistics and
• Optimizes transportation costs, improves delivery times, and
Transportation enhances visibility into shipment status.
Management

Warehouse and • Increases warehouse efficiency, reduces picking errors, and

Distribution Management streamlines order fulfillment processes.

Sales and Operations • Aligns production and inventory levels with sales forecasts,
Planning (S&OP) optimizing resource use and minimizing discrepancies.
 Main supply chain software capabilities (3)

Production Planning and • Increases production efficiency, reduces downtime, and ensures
Scheduling that production aligns with customer needs.

• Improves order accuracy, speeds up processing times, and enhances

Order Management customer satisfaction by providing real-time order status updates.

Supply Chain Analytics and •Enables data-driven decision-making, helps identify inefficiencies,
Reporting and supports continuous improvement.
 Main supply chain software capabilities (4)

• Helps maintain business continuity by proactively addressing

Risk Management potential risks and ensuring compliance with regulatory
requirements.

Collaboration and • Improves supply chain coordination, ensures alignment of goals,

and reduces miscommunication.
Communication Tools

Reverse Logistics and •Enhances customer service, recovers value from returned products,
Returns Management and minimizes waste.
 Main supply chain software capabilities (5)

Product Lifecycle • Improves product quality, accelerates time-to-market, and

Management (PLM) integrates supply chain considerations into product design.

Compliance and Quality • Reduces the risk of non-compliance penalties, ensures product
Management safety, and maintains brand reputation.

Sustainability and
Environmental Impact •Helps companies meet sustainability goals, reduce environmental
impact, and comply with regulations related to environmental
Tracking sustainability.
 Main supply chain software capabilities (6)

Artificial Intelligence (AI)

• Increases accuracy in demand forecasting, automates decision-
and Machine Learning making, and improves overall supply chain efficiency.
Integration

Supplier Relationship • Helps maintain strong supplier relationships, ensures quality and
delivery performance, and reduces supply chain risks.
Management (SRM)
 Popular supply chain management software
and platforms

1. SAP Integrated Business Planning (SAP IBP)

2. Oracle Supply Chain Management Cloud
3. Microsoft Dynamics 365 Supply Chain Management
4. Infor Supply Chain Management
5. Blue Yonder (formerly JDA Software)
6. Epicor Supply Chain Management
7. Logility
8. Siemens Digital Industries Software (formerly Siemens PLM Software)
9. Fishbowl Inventory
 THANK YOU

For any questions, please send an email to:

[Link]@[Link]