Week 4 Project

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Supply Chain Management Systems

SCM systems automate the �ow of information among members of supply chains to make better decisions about how much and when to buy, produce, or ship. When information about demand for a product is distorted as it passes from retailer to distributor to manufacturer to supplier, it creates a building ripple effect across the supply chain called a bullwhip effect. Accurate information from SCM systems can reduce the uncertainty and the impact of the bullwhip effect. SCM systems provide data such as inventory turns, �ll rates, and the make/source cycle time for evaluating the performance of supply chain processes. Companies can utilize Extranets to coordinate the supply chain processes shared with their business partners and use intranets to improve coordination among their internal supply chain processes. SCM can help cash utilization by delivering the product sooner to customers and thus receiving payments sooner. It can also reduce the cost of moving a product through the supply chain and improve responsiveness and customer service.

A major challenge of SCM automation is that it extends beyond the walls of the organization and is complex. Suppliers need not guess how much raw material to procure. Manufacturers need not order more than what they require from suppliers to satisfy customer demand. Retailers have smaller quantities of leftover merchandise and empty shelves if they share information about sales patterns and sales with manufacturers.

SCM software includes software for:

Supply Chain Execution: Manages the �ow of products through the �nal stages of production, distribution, and delivery.

Supply Chain Planning: Enables the organization to develop sourcing, manufacturing, and distribution plans and generate forecasts for a product.

We will now learn about ERP systems and their application in an organization.