SUPPLY CHAIN
Supply Chain
Linkages
As
mentioned, shared information and communication are critical
linkages in successful supply chain management.
The flow of materials and activity through a supply chain
should be matched by the flow of information.
Processes need to be closely linked so that information can
flow smoothly between them and they can be effectively coordinated.
All the structures and organizational units in the supply
chain need to be able to “see” the current status of customer
orders and the schedules established to meet those orders quickly
and simultaneously. If
information is transmitted quickly, accurately and clearly between
the different structures and processes then the entire chain is
effectively moving in
unison to meet customer needs swiftly.
If this is successfully achieved, the need for inventory to
compensate for time lags and errors within the supply chain is
eliminated; in effect, information can replace inventory. The Impact of the
Internet on the Supply Chain
The
Internet is beginning to have a major impact on supply chain design
and management and in fact appears to be on the verge of
revolutionizing the supply chain for many companies.
The major business use of the Internet is by companies
conducting supply chain transactions over the Internet with their
suppliers, distributors, and customers. More
than anything else the Internet add speed and accessibility to the
supply chain. Companies
are able to reduce or eliminate traditional time-consuming
activities associated with ordering and purchasing transactions by
using the Internet to link directly to suppliers, factories,
distributors, and customers. It
enables companies to reduce the time for product design, speed up
ordering and delivery of component parts and materials, track orders
and sales by the minute, and get instant feedback from customers and
suppliers. This
combination of reliable information and speed allows companies to
minimize inventory. The
Internet is changing the fundamental nature of doing business within
the supply chain. It
creates new forms of linkages, blurring the traditional roles of
manufacturers, distributors, and suppliers and frequently cutting
out intermediaries altogether.
It tears down geographic barriers, allowing companies to tap
markets and suppliers around the world they could not have reached
before. As a result the
Internet has shifted the advantage in the transaction process from
the seller to the buyer since it makes it easier form companies to
deal with many suppliers in order to get lower prices and better
service.
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