These are computer programs to capture, represent, distribute and apply knowledge to solve specific problems in the logistics supply chain. An Integrated Supply Chain is a cross-functional approach. Hence, critical problems in different functional areas can be resolved using a software solution for a particular area or a comprehensive software to cover all the functional areas. Supply chain software solution may be tailor-made for a particular business process with particular objectives in mind. Standard packages are also available, but they are less likely to give you the solution you expected. Tailor-made supply chain software solution is expensive and needs a lot of care and maintenance.
The test of a good application software is the degree of integration it facilitates among the firm’s different functional areas, quickly and accurately. These softwares cover key activities in the following major functional areas of the business.
e-Business solution basically focuses on the integration of logistics, which encompasses the entire supply chain as shown in Figure 3.3. Hence, the success of supply chain depends on how effectively and efficiently the various logistics operations are performed in synergy using e-business solutions, which need to be customized for company-specific requirements.
BUSINESS EXCELLENCE THROUGH E-BUSINESS SOLUTIONS
How IT tools play a major role in improving business performance can be well understood by studying the end results that various business enterprises have got, after implementing the e-business solutions from the country’s leading e-business solution provider.
e-business solution helped India’s leading auto instrument manufacturer to redesign their supply chain and implement a comprehensive supply chain initiative. A single-window e-business solution to cover customer interactions; vendor base rationalization; vendor managed inventory; evaluation and selection of 3PL supplier; and information exchange with supply chain partners reaped the following benefits:
Reduction
- Material cost by 3 per cent
- Transaction cost by 50 per cent
- Vendor base by 30 per cent
Increase
- Inventory turnover from 6.3 to 12
Another case pertains to a bicycle manufacturer to whom the e-business solution provider offered a solution to redesign the supply chain for reduction in manufacturing, distribution, logistics and inventory costs to effect an overall reduction of 10 % in unit cost of the finished product. Again, a singlewindow solution was to cover strategic outsourcing, lean production, decentralized manufacturing and integration of customers and suppliers. The overall result was quite dramatic.
Drop
- WIP by 50 per cent
- Raw materials by 50 per cent
- Finished goods by 60 per cent
- Freight by 70 per cent
Gain
- Inventory turnover from 12 to 30
Hence, the key to success in business lies in a robust integrated supply chain, designed on the IT backbone, to bring about a perfect balance between demand and supply through a single visible plan for all business processes in the business that can be controlled on real time basis through e-business solution.
Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.
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