The influence of E-Business on SCM Development
As time went by, we all know that technology is growing faster, better, and bigger than ever. Technology has influenced our everyday life, such as ordering food through mobile apps, fitness routines that have been created by fitness apps, and many more. So, it is no surprise that technology had to improve business processes. We all familiar with online businesses, like Casper, Netflix, Uber, etc. These new businesses are proof of our advancement in business technology. Those businesses are called e-business. Online Business or e-business is any kind of business or commercial transaction that includes sharing information across the internet. Commerce constitutes the exchange of products and services between businesses, groups, and individuals and can be seen as one of the essential activities of any business. E-Business have trending over the year with new company using the model. E-Business models have put many companies to great heights using new technology every year. Back then manufacturing business owns a store and must keep a lot of stocks in the warehouse, but now business owns a website to sell products and doesn’t have to worry about inventory management since now they are a lot of ways to keep inventory in check. In this article, I want to talk about the influence of e-business technology on SCM development.
What is SCM? Well, SCM is the management of the flow of goods and services and includes all processes that transform raw materials into final products. It involves the active streamlining of a business’s supply-side activities to maximize customer value and gain a competitive advantage in the marketplace. By managing the supply chain, companies can cut excess costs and deliver products to the consumer faster. This is done by keeping tighter control of internal inventories, internal production, distribution, sales, and the inventories of company vendors. SCM has its history, it was not so advanced as we know it today. The earlier SCM focuses on internal processes, more significant improvements are in the process. and distribution channels. Now supply chain has improved a lot with new technology such as Improved inventory management, streamlined logistics systems, and various information sharing technologies such as global position satellites (GPS), radio frequency identification devices (RFID), the Internet, and other wireless telecommunications platforms. E-business technology helps SCM to be more accurate and cheaper than before,
because of that lower inventory levels can be maintained across the supply chain while allowing suppliers and producers to fulfill demand.
To truly understand the influence of e-business technology on SCM, I will break SCM into 3 components and that is the business division, the transportation/distribution division, and the payments division. E-business has tightened and altered the connections across all three divisions, bringing more precise information to decision-makers in real life.
The business division of supply chain operations refers to which items or services a company should concentrate on producing and at what scale. These mean businesses need to know customers and how to meet their desires. E-Business helps SCM by producing information that entails customer and market research. The transportation division mainly talks about what is the best way to move products to customers. E-business technology assists SCM in making better decisions about required inventory levels and product movement. Payments division operations mainly about the best way to move money in exchange for delivered goods and services. It’s critical to know and understand the supply chain activities of all the companies involved for the payments system to run smoothly and accurately. ERP systems that can communicate and share information in real-time can provide competitive benefits in this instance.
All of those three divisions have been transformed by e-business. Firms can quickly collect and evaluate crucial information throughout the supply chain, including real-time demand monitoring, thanks to the effective application of modern information technology. E-business has proven that it can help organized information flows between businesses so companies can have better decisions across all divisions of the supply chain.