The Role of the Internet in Supply Chain Management

By Davis Miller

Supply chain management can be defined as the planning as well as management of all activities that are involved in sourcing as well as procurement, conversion, plus including all logistics management activities. In addition, it is important to note that it also includes the coordination plus collaboration with channel partners that may be intermediaries, suppliers or customers, etc. In other words, supply chain management merges supply as well as demand management within and across businesses or companies. And, it has an integrating function with the main responsibility of linking primary business functions as well as processes within as well as across business firms into a strong and high-performing model.

Now the internet has revolutionized supply chain management. There are at least five roles the internet has played when it comes to this. Below are the different areas in which this has happened:

Inventory Management
Definitely one aspect of supply chains that is most costly is inventory management. And, the internet has made it possible for business firms to quickly set up EDI information programs with their clients. Before the emergence of the internet, EDI will usually take a longer time to be implemented in a supply chain.  Then, every channel member had to massively invest in software, equipment, as well as training before EDI systems could be made operational.

The internet has also made it possible for cost associated with purchasing to be reduced. In the United States, business firms have been able to make use of the internet to streamline the purchasing function. With it there is reduction in paper-flows as well as order-cycle times- the time it takes for purchased order to be delivered. Today, face-to-face negotiations, which might be considered the order of the day in the past, are not frequently used as bargaining, re-negotiations, term and price agreements, etc. can now be done via the internet.

Transport management is probably the most popular use of the internet in supply chains. This is so important for any business since the tracking of shipments to regional depots will provide the firm with data that shows how reliable or otherwise the performance of its carriers is, making it possible for transport managers to confirm whether their motor carriers are meeting the promised arrival time. And, it also enables them to inform carriers about shipment delays as this occurs rather than wait for days or even longer before informing them.

Order processing
This critical role of order processing is one that the internet has helped to dramatically reduce costs. And, reduction in paperwork is a major item of this cost saving when compared to conventional practices. Okay another major benefit that the internet has bestowed on this process is the increase in speed with which order processing is now done. Since there is now a reduction in the time it takes for orders to be placed and received by clients.

Vendor relationships
A critical factor when it comes to vendor relations for a business is being able to rate the performance of its vendors. This will be based on elements agreed by both parties (the company and its vendors). And, such performances include factors like deliveries to the company’s warehouses including depots; vendor raw material inventory among others. The internet has been used to monitor these areas.

Customer service
The internet has made it possible for customers to have 24-hour access to a business firm’s customer service department making it possible for companies to be notified of any problem or service issue. Now apart from providing another option for customers to contact a company concerning service issues this has helped improve communication flow between business firms and their customers.      

About the Author
Davis Miller is a regular contributor at many sites. He is very famous for his articles on business and technology. He is also doing guest posting at the site for warehousing Los Angeles.

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