E-supply chain management, also known as digital supply chain management, refers to the integration of technology into every stage of the supply chain process.
The supply chain management process involves various tasks, i.e., from procuring raw materials to delivery of goods to the customer. However, manual operations can lead to errors in warehouses. It can even delay order fulfilment and cause poor collaboration between suppliers and manufacturers. The importance of e-supply chain management is evident. It incorporates digital technology for managing various supply chain activities. The supply chain can reduce costs and avoid problems of overstocking and out-of-stock issues. They even enhance customer satisfaction and popularize brand reputation in the market.
What Is E Supply Chain Management?
E-supply chain management refers to the use of digital technology, such as data analytics, blockchain, AI, and software systems, to manage various supply chain processes of a business. For example, a warehouse management system (WMS) can optimize multiple processes inside the warehouse. It manages the space efficiently and assigns work to the staff. The transport management system (TMS) optimizes the routes and reduces a business’s fuel costs.
E-SCM utilises software systems and collaborates with retailers and wholesalers. Thus, there is proper communication between all the parties.
Key Components of E-Supply Chain Management
The key components of E SCM are as follows.
1. Advanced scheduling And Manufacturing Planning
ESCM will analyse customer behaviour and their orders and generate a report. Businesses can utilise such reports to plan their manufacturing processes accordingly.
2. Demand Forecasting
ESCM leverages demand forecasting tools. These tools forecast product demand in the market in the near future. Businesses can thus utilise such data and understand the labour requirements. Manufacturers can order raw materials accordingly.
3. Transport Planning
ESCM predicts the most efficient delivery route for goods transportation, thereby reducing the fuel costs of businesses. The use of GPS and other advanced software even allows for real-time visibility of the products.
4. Distribution Planning
Distribution of finished goods is one of the most critical aspects of supply chain management. These finished goods move through various channels before reaching customers. The channels include manufacturers, distributors and retailers. ESCM integrates all the distribution channels to have seamless distribution.
Benefits Of E-SCM
The benefits of E-supply chain management are as follows.
1. Real-Time Visibility
Overstocking can increase a business’s warehousing costs, while understocking can lead to customer dissatisfaction. ESCM can monitor the condition of inventories in real time inside the warehouse logistics. This allows businesses to avoid problems of overstocking and understocking.
2. Error Reduction
Manually managing stock and inventories or picking and packing products in the warehouse can lead to errors. ESCM automates supply chain management processes, from order processing to fulfillment, accurately. Therefore, it is less prone to errors—the accuracy level increases in supply chain management processes.
3. Enhances Collaboration
ESCM connects suppliers, manufacturers, and retailers on a single platform. This allows everyone to stay updated on inventories and other vital business information, reducing misunderstandings. It even improves lead times, enabling businesses to make more informed decisions.
4. Increase Customer Satisfaction
Automation and real-time inventory tracking enable faster order fulfilment. This reduces delivery times and improves customer satisfaction.
5. Cost Reduction
ESCM reduces costs by automating and streamlining various supply chain management operations. For example, data analytics optimize inventory levels and reduce the holding cost of a business. The transport management system optimises the route and reduces the company’s fuel costs. Improved coordination among supply chain partners can even reduce delays, wastage, and unnecessary storage costs.
Challenges in E Supply Chain Management
The challenges of E-supply chain management are as follows.
1. High Investment
Leveraging E-supply chain management requires a high initial investment. It may not be possible for all small and medium enterprises.
2. Data Security And Cyber Threats
E-supply chain management heavily depends on digital technologies. It may lead to hacking or cyberattack.
Again, connecting multiple systems increases the risk of data breaches if security protocols are not strong.
Functions Of E-Supply Chain Management
The functions of E-supply chain management are as follows.
1. Inventory Management
E-supply chain management allows the sharing of real-time and updated information about inventories with all the trading partners. This enables us to manage inventories more effectively.
2. Channel Management
ESCM allows the sharing of updated information about operational activities with all the trading partners. Thus, trading partners do not have to communicate via phone calls or emails. This can lead to more informed decision-making.
3. Payment Management
E-supply chain management leverages an electronic payment system. It generates invoices automatically and reduces errors in the bills.
4. Productivity
The use of a digital supply chain improves the coordination among all trading partners. Improved coordination can lead to better productivity in a business.
Final Words
Managing all supply chain processes manually is quite challenging. Adoption of E-supply chain management can be a game changer for any business, as it streamlines various logistics processes and reduces business costs. It also helps logistics companies stay competitive by making their operations more efficient, transparent, and customer-focused. The main goal of E-SCM is to collaborate with all trading partners and ensure a seamless flow of goods and information from suppliers to end customers.
AAJ Supply Chain Management
