Supply Chain Management Technologies and their

applicability in the Supply Chain operations

Fadhili Kiyao

School of Management Studies

CUSAT, Kochi - 22

E-mail:fkiyao@gmail.com

Abstract: Supply chain management is a popular concept in business theory. Its research results are widely used in practice, too. During the development of supply chain management (SCM) useful practices have emerged. These practices or management tools aim at enhance supply chain (SC) effectiveness and/or efficiency by introducing new planning, controlling and monitoring methods. The success of their implementation, however, depends on several factors which have to be analyzed before making decisions on the application. Technology also plays an important role in the success of supply chain management. Even though the supply chain concept pre-dates the Internet, only through the use of web-based software and communication it can truly reach its full potential. Before the Internet, companies were limited because they were not able to receive or to send updates, feedback, or other important information in a timely fashion. Using the Internet to handle most of the elements involved in supply change management, including procurement and communication, makes the exchange of data and the running of the supply chain faster. Internet based Supply Chain Management is the solution that supports collaboration in the Supply Chain as the foundation for gaining competitive advantage and maintain market share. There are many Web technologies necessary for the design and implementation of a Web based SCM application, their employment being determined by the SC partner’s information systems and applications and the level of integration needed.

Key words: Cloud based SCM, mSCM, RFID, eSCM, GSCM, SCM technologies, SC Operations

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1.0 INTRODUCTION

1.1 General

A Supply Chain is a network of suppliers, manufacturers, warehouses, distributors

and retailers who, through coordinated plans and activities, develop products by

converting raw materials to finished goods. Supply Chain Management (SCM)

involves various approaches used to integrate suppliers, manufacturers and

distributors in performing their functions: materials procurement, materials

transformation in intermediate and finished products, the distribution of these products

to distribution centers and from here to point of sales and to the final customer. The

management of Supply Chain assumes to provide the appropriate strategy to deliver

products and services to customers in the right quantities, to the right locations and at

the right time to meet the required service level with minimal cost. Through

collaboration, information sharing and usage of internal information systems and

Internet technologies, companies can create efficient value systems, and get

competitive advantage. The Internet has brought new opportunities for the Supply

Chain field. Companies have to adapt their Supply Chain to the Internet and to

connect through Web technologies with their business partners to create Supply

Chain networks [1].

2.0 CLOUD-BASED SUPPLY CHAIN MANAGEMENT (SCM)

Enterprise Application Software companies have been toying with a transition into the

cloud for the past few years and more are starting to take the dive. Once thought of as

a technology that would replace legacy systems, the cloud is now viewed as a

complimentary delivery option, allowing for two types of next generation applications.

The successes of cloud-based companies such as Salesforce.com have proven that

cloud enterprise applications are not only cost cutting, but sustainable and innovative.

Given this success, more companies are apt to start focusing on the cloud as their

application delivery method of choice.

The growth of cloud-promoting technologies (faster internet connectivity, mobile

technology, net books, social networking, etc.) is helping to spur increased interest in

cloud technology. This is evidenced through CDC Software’s recent acquisition of

Trade Beam, a provider of on-demand software-as-a-service (SaaS) supply chain

visibility and global trade management solutions, as well as e-Commerce giant GSI

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Commerce’s recent acquisition of Vendor Net, a provider of e-commerce SCMs, to

expand its multi-channel expertise [2].

2.1 What is an SCM Cloud?

The SCM cloud is a set of services that provide SCM functions to any cloud user in an

efficient, scalable, reliable and secure way. It abstracts the inherent details of package

implementation and the challenges associated with integrating these packages with

the other enterprise applications. This enables the user to get a simplified view of

SCM functions (rather than SCM applications) like order management, warehouse

management, demand forecasting etc. A user merely signs up on the cloud,

subscribes to the necessary SCM functions, and starts using it. It is that simple.

Figure 1 provides an illustration of the layer of abstraction provided by the SCM

functions that leverage machine instances from the infrastructure cloud [3].

Figure 2 presents a detailed view of various tiers of SCM applications consisting of a

variety of associated vendor-specific hardware and software components.

Traditionally, retailers must go through a laborious and time-consuming exercise to

find a suitable application that can place, manage and fulfill orders. They need to

choose a product after evaluating many of the best-of-breed solutions and

accommodate technology constraints that come with it. They must then configure the

product to meet business logic, integrate the application with other applications, test,

procure the hardware to host the application stack, and finally, go live. After this

comes the additional challenge of post-production maintenance [3].

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Figure 1 SCM Cloud providing an abstraction of SCM functions

F

igure2 Detailed view of a multi-tiered SCM application

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This is an onerous process considering the fact that most retailers are only asking for

a simple mechanism to capture, manage and fulfill orders. Only retailers with mature

IT departments and big budgets can sustain the long process of software

implementation. However, with the advent of cloud computing, a layer of abstraction

can be built to mask the inherent details to have an order management system

offering in a more economical way. With SCM cloud, Figure 3 gets transformed

to Figure 3 - a simple SCM function instance for order management.

This model also works well for small businesses which lack dedicated IT departments

and cannot afford a data center. The cloud also provides these abstractions in a

scalable, reliable and secure way which aligns the solution in line with the business

growth pattern. In sluggish economic conditions, downsizing the environment also

becomes equally easy. 

Figure 3 SCM function instance for order management.

2.2 Implementing an SCM Cloud

Although the enormous benefits of an SCM cloud are obvious, ranging from scalability

and cost control and requirement-based expansion and reduction in capacity, much

still needs to be done in terms of streamlining the process. The following are some

key factors that must fall in place for SCM cloud implementation to succeed.

The SCM Cloud can provide a win-win situation for all participants – infrastructure

vendors, SCM product vendors, service providers, and users. In the reverse order,

users benefit because of reduced CAPEX and huge OPEX savings, service providers

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benefit because they are the builders of such logical groups of functions, SCM

product vendors and infrastructure vendors gain because the SCM cloud opens up

the gates to a legion of users who would have otherwise resorted to age-old ledgering

and suffered growth.

Further, it is possible for developers to come up with their own ideas and host them as

a service on the cloud and get paid when users sign up and use their services. A

good example is a rule-based engine for demand forecasting. Users can prepare the

inputs for a forecasting function and use it only once every quarter to generate the

demand forecast and unplug from the forecasting function. If Vendor A's forecasting

service does not work well, user can easily switch over to Vendor B the next time. In

essence, there is a lot of potential in Cloud Computing for everyone including IT

service providers. It is therefore imperative to adapt to the change in the way IT

applications are packaged, configured, hosted and used and accept the challenges

this notion has to offer and strategically work towards solving them. Sooner or later

this is a cold that everyone ought to catch and when they do, they will want the luxury

of proactive and reactive environments for their applications but at a cheaper price.

This view of the cloud makes us, the service providers the best ones to take the

cudgel to implement the CLOUD. We must therefore prepare a pool of requirements

and a pool of plausible technologies and create a layer of abstraction to free the user

from choosing packages, best-of-breed solutions, databases, integration middleware,

and infrastructure and think only about the required functionality and how much he

can/should pay for it. Here is a simplified tiered-illustration of SCM cloud components

[4].

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Figure 4 illustrations of SCM cloud components

Manufacturing companies around the world, with their inherent penchant for low IT

budget, are paying much closer attention to cloud computing and its potential value to

supply chain processes - from sourcing to after-sale service.

Supply Chain Management space is the ideal breeding ground for cloud computing.

Let's start with procurement. Enterprise applications in supply chain space, and

especially in procurement domain, are mostly about B2B or inter-company

coordination and collaboration among hundreds of supplier companies on a global

scale. This geographical spread and need for collaboration makes it an ideal

candidate for Cloud computing. One of the main value-proposition from Cloud

computing is said to be reduction in 'total cost of ownership' and it is also the most

commonly cited success metric in sourcing and procurement.

Now let's move to Supply Chain Planning. Production planning and forecasting are

not normally the core components of companies' ERP systems. Clients therefore can

run one vendor's ERP application and can leverage another's best-of-breed planning/

forecasting application via the Internet [5].

Now coming to Supply Chain Execution and visibility, Control Tower Systems, the

most recent addition to supply chain visibility tools is now available in cloud. Control

Tower technology for supply chain, in simple terms, is a Single-Version of Supply

Chain Truth. A platform that makes that truth available across the value chain in an

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agile manner and that connect trading partners and service providers to create a

vibrant, "always on" electronic community.

This inevitable and imminent adoption of cloud is going to bring about a paradigm shift

in the way enterprise applications are dealt within manufacturing industry. The supply

chain application vendors who are quick to internalize this change are going to hugely

benefit from this [5].

3.0 MOBILE SUPPLY CHAIN MANAGEMENT (mSCM)- KEY

TECHNOLOGIES AND APPLICATIONS

Modern supply chain management is often based on extensive usage of information

communication technologies. In order to improve the quality of service and goods and

provide more efficient work and better communication and coordination among all

participants in the supply chain, in the recent years a special emphasis was put on the

implementation of mobile devices and wireless communication systems [6].

Also, the main characteristics and applications of mobile supply chain management

are presented. The most obvious advantage of using modern wireless and mobile

technologies in supply chain management is in providing highly efficient, fast and

accurate means of collecting and sharing information and data on the movement of

goods and other important events. These features make it easier to control and

monitor work activities and provide updated information on the status process, which

enables a company to establish and maintain complex adaptive supply chain network

[6].

3.1 Mobile Supply Chain Management

Mobile supply chain management (mSCM) is defined as the use of mobile devices

and applications to assist in the efficient and effective management of various

activities in modern supply chains, contributing to better company's operations by

reducing costs, faster response system and achieving competitive advantage. The

most obvious advantage of using wireless and mobile technologies in the

management of modern supply chains is that companies are now able to provide

customer service no matter where they are and at a time that best suits them. In

addition, mobile applications for supply chain management can be used to improve

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the business processes of different business functions by ensuring efficient flow and

exchange of information and goods between the various supply chain activities, from

product concept, its design, manufacturing, sales, customer service, and all by the

end of its life cycle, i.e. use. Mobile systems for supply chain management integrate

software applications with mobile devices (e.g. mobile phones, PDAs, pocket

computers, etc.), in order to provide flexibility for users to work in the wireless

computing environment from any location (e.g. shop or warehouse, using mobile

devices and possibly other wireless units (e.g. RFID readers)). Mobile devices

connect to the company server via a wireless infrastructure (mobile network or WiFi-

WLAN), which enables data and information exchange between different functions

within a company and along the supply chain. In this way, a software application for

mobile supply chain management enables intra-company and inter-company business

systems, enabling participants in the supply chain to realize business activities such

as online transactions, share and exchange of updated information, providing

customer service, logistics and transport management, warehouse management, and

so on.

Application areas Information – Information management i.e. fast and efficient

reception, transfer and exchange of information is one of the key aspects of mobile

supply chain management.

Mobile inventory management – Accurate and efficient inventory management, based

on the solutions with bar codes or RFID tags, is used to track the level of the stocks of

those products that are critical for the company. In this way, companies can reduce

the problems of duplication or lack of entries, and enable people to know exactly

where some item is.

Mobile sale - Using mobile systems for supply chain management, retailers can

increase sales by providing the right amount of right products at the right place at the

right time. The system improves customer satisfaction by informing them about the

status of their orders and reducing the probability of delays or incomplete orders.

Tracking goods in supply chains – By using GPS systems, mobile devices and

networks, now is possible to monitor the progress of each transport vehicle in real

time efficiently, and thus to know exactly its position and time of arrival at the final

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destination, and the type and quantity of goods carried by transporter, thus opening to

possibilities of transport optimization and lowering the costs.

4.0 RFID

RFID (Radio Frequency Identification) is a technology which uses radio waves to

communicate and exchange data between a reader and tags attached to an object,

for purposes of identification and tracking. RFID tags are being developed to replace

bar codes. Bar codes have a number of limitations: they require optical visibility with

scanner, are printed on paper and can easily be tear, soil or lose, only identify the

manufacturer and product, but not individual items, etc. Each RFID tag has a unique

identifier, assigned to a particular product or packaging. Depending on whether they

have their own power supply (battery) or not, tags are divided into active (with own

power supply) and passive. Reader through the electromagnetic (radio) waves reads

data from the tag and forwards them to the system for data exchange and

management for further processing. Active RFID tag reading range is 10-100 m, and

for passive ones is 10 mm to 5 m. Tags are becoming smaller and smaller (Hitachi

has made RFID chip measuring 0,05 x 0,05 mm, which can store 38-digit number).

Compared with its predecessor, the bar code technology, RFID has the following

advantages:

does not require optical visibility for reading, can store a larger amount of data than bar code (e.g. it is possible to keep the

information on each individual product, not just a class of type) smaller size, come in many forms and shapes, Much safer. Given that the electronic nature, may use content protection code, so it's

not easy to read and forge the content data is stored in the RFID tag can be changed or added, resistant for work in dangerous environments, a large number of RFID tags can be read almost instantaneously, rapid response system, Cost reduction (in the long run), and so on.

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Figure 5 The structure of RFID-based Chain

RFID technology has increasingly been applied in different areas of the economy and

parts of the supply chain, such as: the production, receipt and issue of goods,

transportation, distribution, warehouse operations, retail, etc. Some of the world

largest retailers (e.g. Wal-Mart in the U.S., Tesco in the UK) and government

institutions (US Ministry of Defense) bind all of its suppliers to introduce RFID

technology.

4.1 RFID Applications in Supply Chain Management

There are as many RFID applications as there are businesses.  Some RFID

applications have been around for decades, others are just starting to emerge. RFID,

itself, is not a new technology; however, it is being used in many new and different

ways. The roots of RFID technology can be traced back to World War II when radio

waves were used to identify friendly aircrafts; in the 1970s New York Port Authority

introduced an RFID device used for toll collection.  While RFID applications used

earlier are still around today, many more RFID applications have emerged since then.

Today, the largest RFID application aids companies and governments in supply chain

management. RFID is being used to manage products through production, distribution

and retail. Manufacturers can especially benefit from implementing RFID applications

in supply chains because they can decrease costs associated with product tracking

and inventory management and increase the accuracy and timeliness of inventory

data. Experts say that early adaptors of RFID applications in supply chains have seen

a significant increase in revenue.

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RFID Applications in the Distribution Chain: RFID Applications can be used to monitor

and manage the movement of the finished products throughout a supply chain.  RFDI

tags can be attached directly to the items and materials or they can be attached to the

containers that carry them.  Pallets, trailers, totes, carts, cargo containers, and

reusable transport items can all be tagged. Readers placed throughout a facility can

monitor movement and location of inventory, thus providing real time data.  This can

be within a warehouse, a freight yard or within a retail location. RFID applications in

the supply chain enable more frequent and accurate inventory counts RFID

applications in the supply chain can also decrease costs associated with inventory

counting

In addition, RFID applications in fleet management have demonstrated significant

ROI.  RFID applications in fleet management enable a more cost-effective long-range

tracking solution, global tracking of containers and cargo, reliable tracking of capital

and inventory assets during transportation and increased security. By placing RFID

tags on long range vehicles, trailers or other mobile assets, companies can gain

visibility into their business’ assets’ utilization.

RFID Applications in Retail and Product Marketing: As in the distribution chain, RFID

application in retail can greatly aid in reducing the cost of keeping accurate inventory

data.  With fewer people and less time, retailers can keep accurate inventories. 

Associates can spend more time providing service to customers rather than counting

product. RFID Applications in retail can greatly aid in ensuring proper product mix and

availability are maintained for customers.  The accuracy of the real time inventory data

that is provided by RFID applications, enables product marketing managers to ensure

that hot selling items are properly stocked and to ensure replenishment order for

these items are placed as quickly as possible.  Slow moving items can be quickly

identified.  This allows product marketing managers to take corrective action to goose

demand through promotional or advertising activity before a ‘fire sale’ is needed. Thus

RFID applications help product marketing managers maintain their margins. RFID

applications are, also, a significant aid in deterring theft in retail environments. Items

tagged with RFID devices can trigger alarms when they are removed from the store

without being properly deactivated.  RFID applications have been successfully

deployed for anti-theft purposes for several decades.

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RFID Applications in Brand Protection: RFID applications can be used to protect

brand identity by product marketing managers and to protect consumers from

counterfeited products. RFID applications in anti-counterfeiting are, generally, aimed

at high-value end consumer products.    The unique identification number on standard

RFID tags can be used to verify the authenticity of the products to which they are

attached.  These unique numbers combined with encryption algorithms can create

authentication schemes that are extremely difficult for counterfeiters to circumvent.

RFID applications in anti-counterfeiting can be used in many industries, including

pharmaceuticals, electronics, entertainment, retail, IT and many more. It is estimated

that counterfeiting costs legitimate companies nearly $600B worldwide each year. 

The payback even modestly successful anti-counterfeiting efforts can be very high. 

RFID applications represent one of the most promising methods for countering this

major problem.

By placing RFID tags on products at the point of manufacture, manufacturers can

trace products throughout the supply chain. The pharmaceutical industry is creating

an RFID application that will document the authenticity of their products at retail.  Not

only will the products have a unique ID, but information about the chain of custody for

the product will be stored on the RFID tag or in an associated database.   If the

product is not properly tagged or the tag is not associated with the proper chain of

custody – then you know the product is counterfeit.

While many anti-counterfeiting efforts are a large expense that most US companies

face, RFID applications in anti-counterfeiting have a high ROI. By placing RFID tags

on products at the point of manufacture, not only can products be traced throughout

the supply chain, but it can also prevent counterfeit products from entering into the

supply chain [7].

5.0 ENHANCING SCM WITH VOICE TECHNOLOGY

With small mobile computers, smart phones and applications hosted offsite and

accessed through the internet cloud, users with only the need of a web browser can

perform the same tasks as it used to take dozens of individuals working on a large

enterprise system. The newest technology impacting how business is operated is the

implementation of voice technology. Now employees with mobile computers do not

even have to touch a keyboard in order to run business applications. Voice

technology is even providing new opportunities in supply chain management [8].

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Now voice recognition software and associated technologies provide efficiencies to

the supply chain management process by allowing employees to order and ship

supplies using simple language instead of a computer keyboard. Using the most

widely used supply chain management software, employees selecting orders from a

supply warehouse have reported as much as a 25% increase in productivity and a

35% decrease in human error.

When integrating voice technology into the supply chain management system,

workers use a headset and microphone connected to a mobile computer that they

carry with them. The mobile computer communicates wirelessly with a server that

hosts the supply chain management software package. Information from the server is

translated into simple language that can be heard through the headset. For example,

the worker is told that an order has been filled and is then directed to the location

where the items can be retrieved in the warehouse. The worker can also

communicate information back to the server using simple language spoken through

the microphone. Without the need to input information or read a screen, the worker

can tell the supply chain management system that the order has been physically filled

and that it has been transferred to shipping. This type of voice technology integration

is not limited to supply chain management but has also been used to operate factories

and distribution centers for almost a decade. Applications that have proven to be very

successful are those that support quality control, package sorting, and inventory

management.

Right now the use of voice technology for supply chain management has still only

been implemented in a small percentage of the large distribution centers. In addition

to decreasing costs, new features such as multilingual voice recognition and synthesis

and new supply management functions, such as restocking, will increase utility and

drive continuous growth in sales and market penetration.

Although, at this point, voice technology integration with supply chain management

may not be a solution for all small businesses, it is a tool that will eventually be part of

most warehouse and distribution centers. Business owners should take the time and

research existing solutions to see if any of them would be appropriate for their

particular business. It seems that the continued trend for supply chain management is

to increase safety, decrease errors, and decrease management costs by freeing

employees from the need to physically interact with the company’s computer system.

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6.0 SOFTWARE AGENTS

Monitoring and Surveillance agents and Data mining agents are being considered for

applications in SCM. For example, NASA's Jet Propulsion Laboratory has an agent

that monitors inventory, planning, and scheduling equipment ordering to keep costs

down, as well as food storage facilities. These agents usually monitor complex

computer networks that can keep track of the configuration of each computer

connected to the network. Agent-based solutions are being introduced for SCM. Air

Liquide America LP, a producer of liquefied industrial gages, reduced its production

and distribution costs using agents. Merck and Co, a leading research-driven

pharmaceutical company used agents to help it find more efficient ways to distribute

anti-HIV drugs. Proctor and Gamble used agents to transform its supply chain network

into a network of software agents whose behaviors are programmed through rules.

Artificial Intelligence emerged into the paradigm of software agents with the

application area of multi-agent systems. A software agent is a software system, which

has attributes of intelligence, autonomy, perception or acting on behalf of a user.

Agents can behave autonomously or proactively. The intelligence of an agent refers to

its ability of performing tasks or actions using relevant information gathered as part of

different problem-solving techniques such as influencing, reasoning and application

specific knowledge. Java has been the most common tool for building such intelligent

agents which are increasingly becoming mobile. Most of the agent platforms available

today like AgentBuilder, Aglets, Voyager, JADE, ZEUS and FIPA are implemented

using this language. One classification of agents given by Haag (2006) suggests that

there are only four essential types of intelligent software agents [9]:

• Buyer agents or shopping bots - Buyer agents travel around network (i.e. the

internet) retrieving information about goods and services. These agents, also known

as 'shopping bots', work very efficiently for commodity products such as CDs, books,

electronic components, and other one-size fits- all products. Amazon.com is a good

example of a shopping bot. The website will offer you a list of books that you might

like to buy on the basis of what you're buying now and what you have bought in the

past [10].

• Monitoring and Surveillance Agents are used to observe and report on equipment,

usually computer systems. The agents may keep track of company inventory levels,

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observe competitors' Prices and relay them back to the company, watch stock

manipulation by insider trading and rumors, etc.

• User agents (personal agents) - User agents, or personal agents, are intelligent

agents that take action on your behalf. In this category belong those intelligent agents

that perform tasks like checking your e-mail and sorting it according to the user's

order of preference, and alert you when important emails arrive; Play computer games

as your opponent or patrol game areas for you; Assemble customized news reports

for you. There are several versions of these, including newshub and CNN.

• Data mining agents - This agent uses information technology to find trends and

patterns in an abundance of information from many different sources. The user can

sort through this information in order to find whatever information they are seeking.

Classification is one of the most common types of data mining, which finds patterns in

information and categorizes them into different classes.

7.0 ELECTRONIC COMMERCE

Electronic commerce refers to the wide range of tools and techniques utilized to

conduct business in a paperless environment. Electronic commerce therefore includes

electronic data interchange, e-mail, electronic fund transfers, electronic publishing,

image processing, electronic bulletin boards, shared databases and magnetic/optical

data capture [11]. Companies are able to automate the process of moving documents

electronically between suppliers and customers. This system provides access to

customers all over the world and thus eliminates geographical limitations [12].

Some of the E-commerce applications with applications in B2C (Business to

Consumer) and B2B (Business to Business) space, which are changing the dynamics

of Supply Chain Management include:

E-tailing: using the Internet for selling goods over the internet. The archetypal e-tailing

application is that of a bookseller such as Amazon. This company is renowned for the

fact that it only sells books over the internet and doesn't even take telephone orders.

Customers of Amazon interact with its website and carry out a number of functions

including:

browsing readers’ reviews of books; reading feature articles about books and authors similar to those found in magazines

and newspapers;

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searching for details of a book based on information such as the author's name or the title of the book;

browsing the books which are the Amazon bestsellers; ordering books using credit cards or some other similar payment method; tracking the progress of an order.

e- Procurement: The term procurement is used to describe the purchase of goods and

services which are not directly used in the main business of a company. For example,

a car manufacturer will procure stationery for its employees or procure training

courses for them to attend in order to improve their skills. An e-procurement system

which would automatically take the form produced by the person making the

procurement, check that it satisfies all the company rules for procuring the item that is

required, carry out authorization if it is below a certain limit or send the form to

someone who can carry out authorization and then log the purchaser into the site of

the supplier. He or she is then able to use this site to make the purchase, quoting an

automatically generated procurement requisition number.

E-Auctions: These are sites on the web which run conventional auctions. There are

two types of auction: those that are carried out in real time, where participants log in to

an auction site using a browser at a specified time and bid for an article until the

highest price is reached and no other bids are forthcoming. The other type of site –

and the most common – is where an item is offered for sale and a date advertised

after which no more bids are accepted. Such sites make a profit from two sources:

first they usually charge a commission on the items that are sold and, second, they

display adverts which are viewed by visitors to the site. The auction site will then

receive some fee for displaying the advert, a further fee if a visitor clicks on an advert

and it takes them to the advertiser's website and another fee if they purchase

something from this site. Again, this is just an online analogue of a conventional

business.

7.1 Electronic Supply Chains

Electronic Supply Chains (ESC) refers to those supply chains that are electronically

facilitated between or among participating firms. Also called Virtual Supply Chains,

these are realized in two forms, EDI-based or Internet based. EDI generally connects

firms through proprietary Value Added Networks (VAN) [13], whereas the Internet

generally connects firms through open networks which use standard protocols. The

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ESC links trading partners to allow them to buy, sell and move products, services and

cash. Due to the low implementation costs, the introduction of the Internet has

brought about opportunities that allow firms to transact with other enterprises

electronically. Amazon is one such example. New types of intermediaries have been

created as a result of virtual supply chains. The e-supply chain also envisages use of

internet-based applications to transact and exchange information like product and

inventory information with their downstream or upstream trading partners. Supply

Chain initiatives like Collaborative Planning, Forecasting and Replenishment (CPFR),

Vendor Managed Inventory (VMI), Efficient Customer Response (ECR) and Quick

Response have been increasingly facilitated in the new e-supply chain paradigm.

Information sharing among suppliers, manufacturers, distributors and retailers are

greatly improved.

7.2 Virtual Market Places

Virtual marketplaces have many names such as e-markets, net market places, and

electronic markets. These markets all have common characteristics [14]:

Producers Reliance on the Internet Buyers and Sellers come together without an intermediary Neutrality (all buyers and sellers are treated the same) Information is provided about sellers and products

Metal Junction [15] is the virtual marketplace owned by two of India’s largest steel. In

its most fundamental form, a virtual market place brings together buyers and sellers

through the internet. At its highest level, a virtual market place gives a purchaser and

supplier the opportunity to re-engineer the sales administration process, improve

forecasting and scheduling, renew its go-to-market approach, shorten its order-to-

cash cycle, and enhance customer service. Ideally, virtual market places are centered

on a particular industry. Some prominent examples are steel, agricultural products,

and automotive parts. In addition to providing information on vendors and general

information about its products, a virtual market may also offer product specifications,

side-by-side comparisons, technical papers, and market analysis.

Many challenges exist in setting up an e-marketplace. Primary among these are

identifying the tools necessary to use the market, providing a secure environment,

pricing, payment, and fulfillment. For an orderly marketplace, Internet protocols must

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be selected. The cost of the technology to access and engage in the market must not

be prohibitive. Security and privacy must be adequate to ensure confidential

transactions. Authentication and authorization of users from many organizations must

be possible. Private communication must be assured.

Pricing policies may be set or bartered. A common example of bartering, or

auctioning, is E-Bay for consumer products. Payment procedures can be

predetermined or arranged between the buyer and the seller. Finally, fulfillment of

orders must be insured. As in the case of traditional marketplaces, failure to deliver in

a timely manner will result in firms losing market power and ultimately may lead to

failure.

8.0 GREEN SUPPLY CHAIN MANAGEMENT (GSCM)

Patrick Penfield of the Whiteman School of Management defines Green Supply Chain

Management (GSCM) as "the process of using environmentally friendly inputs and

transforming these inputs into outputs that can be reclaimed and re-used at the end of

their lifecycle thus, creating a sustainable supply chain.”

GSCM integrates ecological factors with supply chain management principles to

address how an organization's supply chain processes impact the environment.

Organizations are increasingly becoming aware of the impact of tight integration of

supply chain and environmental management systems in enabling a sustainable

business strategy. Many are now seeking out solutions and guidance on how to

implement a sustainable supply chain. A sustainable supply chain is supply chain that

is not only optimal for the organization, but is optimal relative to its limited

environmental impact.

8.1 Software Perspective - Streamlining / Transforming Business

Processes

Green Supply Chain Planning: Information Technology can optimize transportation

planning routes and ensure that goods/services are delivered in the most energy

efficient and cost- effective manner. Automation of the transportation planning

process enables transportation managers to manage by exception to mitigate the

effects of unexpected events. The Supply Chain Council has documented the best

practices for transportation and distribution in its SCOR framework. Some

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organizations like IBM have developed Business Process Modeling software based

on the SCOR framework to enable efficient planning of supply chain functions. Many

IT solutions exist that can evaluate the impact that various supply-chain network

configurations and transportation strategies have on the carbon footprint. For

example, LogicNet plus XE solution with the carbon extension from ILOG takes into

consideration multiple parameters-including environmental factors - to help

organizations choose the right kind of supply network configuration.

Green Supply Chain Execution: Information can help in streamlining business

processes and thereby, enable reduction in resource usage while executing business

processes. For example, visibility solutions provided by Cognizant to leading logistics

players for asset tracking helped them reduce their resource consumption while

achieving higher service levels. Automation for enabling end-to-end paperless

operations is a major target for waste reduction.

RFID technology can also be a huge enabler for GSCM strategies. RFID-enabled

tracking of energy footprint data can make it possible for organizations to understand

the “who, why and how” a product reached a particular stage in the supply chain.

RFID labels can carry information related to the carbon/energy footprint and help

organizations more accurately analyze their supply chains from a variety of

environmental perspectives. At Cognizant, there is a dedicated Center of

Excellence for RFID that has helped in the implementation of RFID solutions

for leading logistics providers and retailers.

Green Supply Chain Collaboration: Collaborative Transport Management

(CTM) goes hand-in-hand with GSCM. IT solutions for facilitating the

involvement of all partners in the supply chain can help organizations

achieve better utilization of transportation assets and reduce overall

energy requirements [16].

IT can also facilitate collaborative planning forecasting and replenishment

resulting in higher accuracy of forecasting thus reducing the resources

consumed in production.

9.0 CONCLUSION

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There is estimated to be around $107 billion in overall revenue opportunity for the

cloud-based market in the next three to five years, and there is seemingly no limit to

what the cloud can contain for enterprise applications. As the definition of “cloud”

becomes more all encompassing, so does the technology companies are rolling out

for clients. The market for cloud-based services is expected to reach nearly $150bn

by 2014. Manufacturing companies around the world, with their inherent penchant for

low IT budget, are paying much closer attention to cloud computing and its potential

value to supply chain processes - from sourcing to after-sale service. RFID application

in the supply chain offer solutions when it is impractical to use other technologies or

manual labor to collect data. RFID applications have many benefits; RFID applications

can help in asset tracking, inventory and product management and provide solutions

for anti-counterfeiting. Data collected to accomplish all these goals can provide

suppliers and end users with the tools and information to make management

decisions on the fly resulting in a better ROI. Voice technology is even providing new

opportunities in supply chain management. Now voice recognition software and

associated technologies provide efficiencies to the supply chain management process

by allowing employees to order and ship supplies using simple language instead of a

computer keyboard. Using the most widely used supply chain management software,

employees selecting orders from a supply warehouse have reported as much as a

25% increase in productivity and a 35% decrease in human error. With increase in

environmental concerns during the past decade, a consensus is growing that

environmental pollution issues accompanying industrial development should be

addressed together with supply chain management, thereby contributing to green

supply chain management. Green supply chain management has emerged as a

proactive approach for improving environmental performance of processes and

products in accordance with the requirements of environmental regulations.

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