Recently I was approached by my old college professor to put together some documentation to assist with her e-commerce class on dealing with supply chains. She relayed to me that her students we not fully understanding what a value chain or supply chain was and how it was applicable to their future job. The format was to be an interview between the professor and myself so she sent me the questions and asked that I stage and rehearse my answers. Below is the outline I used for her class as I feel many can benefit from the information within.
Q: What are the supply chains and why are they important to an organization?
A: According to a University of Central Arkansas: Small Business Advancement National Center (SBANC) article, ???????A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. Within each organization, such as manufacturer, the supply chain includes all functions involved in receiving and filling a customer request.??????? Basically, a supply chain is all parties and functions involved in fulfilling a customer????????s request. Without some sort of supply chain the customer request will not be fulfilled thus demonstrating its importance to a business.
Q: How do we build supply/value chains?
A: Supply chains simply refers to the way in which a company delivers their product or service to the market. Many systems exist to assist with the management and efficiency of a supply chain. The cost of these systems has significantly dropped due to globalization. This means that smaller firms now have the ability to participate in e-commerce systems with larger firms. This lowered cost subsequently translates into a lowered price and better value for consumers. Coupled with technologies like real-time updates, mobile application availability, and regional manufacturing means even greater value at less cost than in previous decades. In essence, in order to build a supply chain you must setup all the steps and procedures necessary for delivering that product to your customer not only at the best price but the best value as well.
Q: What are the roles of wholesalers and retailers in the supply chains?
A: Wholesalers and retailers work with manufacturers to deliver products to consumers in the market. The manufacturer has to worry about the production of a product and the overhead, in many situations, its too much to warrant the warehousing and selling these products themselves. This is the role of wholesalers and retailers, to deliver goods to consumers at convenient and accessible places. They also handle consumer feedback and offer information about products to the consumers. Further, they also handle customer complaints, they set the end price to consumers, they report information about consumer habits and preferences, and traditionally they warehouse products. The middle man so to speak.
Q: How do we maintain effective supply chains?
A: The most effective way to maintain an effective supply chain, in my opinion, is to focus on the consumer and their wants and needs. From those wants and needs a system for fulfillment should be built around them with value added along every step of the process. I believe this to be the best method because without the consumer (or purchaser when referring to B2B commerce) there is no sale. Maintaining the system of fulfillment does not mean stagnation, but in fact the opposite; constant innovation. Through the perpetual improvement of procedures you can almost certainly guarantee
Q: What are the consequences of ineffective supply chains?
A: Ineffective supply chains lead to customer dissatisfaction, costly overhead, more returns, and a decrease in revenue. Furthermore, these ineffectual supply chains may also lead to negative views of the manufacturer????????s brand. Companies like these will more than likely go out of business due to dwindling sales or more efficient competition.
Q: What are the best ways to guarantee e-fulfillment?
A: I believe the best ways to guarantee e-fulfillment stems from the type of procurement and inventory procedures your company utilizes. Many various methods exist for supply chain management but this is presupposed by the industry and market to which your company????????s products belong. If a product is sold to a customer online, then an expectation is presented to the purchaser. It then becomes your responsibility to deliver the products according to the agreement with the customer, while making a profit. This is very complicated and there is no single correct way to accomplish this task but some ways to manage your backend systems include: Just-in-time production, lean production, and EDI systems for universal data exchange just to name a few. These allow for the optimization of cost and value for the entire supply chain, customer included.
Q: What is e-fulfillment and why are they important to an organization?
A: According to Cambridge Dictionaries Online, e-fulfillment is, ???????the arrangements that are necessary for businesses to sell their products or services on the internet.??????? This set of processes is important to an organization because it allows for the customers???????? request to be filled for a lower cost than traditional fulfillment models. Bottom line is that e-fulfillment is the most cost effective fulfillment method compared to outdated alternatives. Fulfillment includes the supply and value chains chosen by a corporation.
Q: What are the consequences of ineffective e-fulfillment?
A: Consequences of ineffective e-fulfillment is worse than ineffective supply-chains and value-chains because, while supply-chains and value-chains are a portion of fulfillment activities, they are not the entire process. In other words, rather than needing to re-evaluate a portion of the fulfillment process you would need to re-evaluate the process in its entirety. This will surely ruin a company if left ineffective for long. More concrete consequences include lost profits, brand image degradation, and a very real probability that the company will go under.