Meditech

Managing Supply Chains

Many businesses prosper or fail depending on the success of their relationship with their suppliers and with those who they supply. Businesses that rely on other businesses to this extent are in what is called a supply chain - each supplying each other right up to the final link in the chain, the consumer. The Internet can help make this relationship work more effectively and efficiently. This section of the e-businessguide will explain:

Ð'* what is a supply chain

Ð'* why collaboration is important

Ð'* how the Internet can assist

Ð'* what standards exist that help coordinate online activities

Ð'* the nature of global supply chains

Ð'* how the Australian Government's ITOL program can help businesses

Ð'* what you can do to investigate supply chains in your industry

About supply chains

A supply-chain encompasses all activities and information flows necessary for the transformation of goods from the origin of the raw material to when the product is finally consumed or discarded. This typically involves distribution of product from the supplier to the manufacturer to the wholesaler to the retailer and to the final consumer, otherwise known as nodes in the supply-chain. The transformation of product from node to node includes activities such as production planning, purchasing, materials management, distribution, customer service and forecasting.

While each firm can be competitive through improvements to its internal practices, ultimately the ability to do business effectively depends on the efficient functioning of the entire supply-chain. For example, a wholesaler's inability to adequately maintain inventory control or respond to sudden changes in demand for stock may mean that a retailer cannot meet final consumer demand. Conversely, poor sales data from retailers may result in inadequate forecasting of manufacturing requirements.

However, it is not simply about passing information from one node in the supply-chain to the next. The dispatch and distribution functions need to work effectively as well, so movement of product from one node to another happens in a timely manner and meets production scheduling.

All that said, there can be little point trying to improve your bottom line through transforming your own business without similar changes to the way your supply chain as a whole is functioning. That is, there needs to be consistency between individual business objectives and the objectives of the supply-chain, and access to information in order to provide visibility of data flows.

Collaboration

Technology solutions can support greater data visibility and integration of dispatch and distribution with production scheduling. However, one element that underpins management of the supply-chain is collaboration.

Collaboration means firms share information in an accurate and timely manner so all businesses in the supply-chain can adequately plan forward inputs and outputs, dispatch product, manage risk and maximise return on investment. This improves the overall functioning of the supply-chain and ultimately the individual firm's bottom line. The key to collaboration is communication and the key to better communication is electronic transfer of information.

The Internet

Proven supply-chain models rely on the Internet to transfer