E-commerce is about doing business with Internet either buying or selling things on the Internet. Internet defined in technology terms is a global network where computer systems are connected around the globe. Supply chain system (SCS) is one of the systems in enterprise application which helps the company in managing its relationship with its supplier. They share information to source produce and deliver goods and services efficiently. Their main objective is to get the right amount of products from their source to their customers at the shortest time and the lowest cost. This increases the firm’s profitability and allows managers to make better decisions. Coca-Cola Company, Colgate, Zara and Amazon are one of many successful companies with good supply chain system.
The first benefit that supply chain system (SCS) in organization can have lower costs to raw materials. It plans for materials to be brought to organization at the lowest cost and fastest correct time. With low costs, the organization can invest on other things to improve and increase the profits of the company. Colgate, for instance uses SCS to ensure the logistics are well-planned ahead so that there is enough materials with a minimum list to lower operation cost. By planning ahead, Colgate ensures that the required raw materials are sufficient and maintain the inventory to lowest so that the cost for operation is less than normal amount.
SCS also helps organization in making the quality of the products are consistent. Through negotiations with their suppliers, organizations can ensure that the product they sell will be of a high and equal mass quality. This could reduce the cost of quality control which can be another plus of SCS. Since the quality will be same regardless the quantity, organization may not need to check the supplies to comply with standard which could reduce cost and improve efficiency of the supply chain. Nike, one of the largest athletic footwear seller, uses SCS with quality control as one of their activities. They have long-term supply contract with some factories that can produce their strict and constant quality products.
With SCS, organizations can improve their relations with their suppliers with better communication and responsiveness. With improved relations and continuous communication, organization can ensure the suppliers are aware of demand changes and ensure the correct supply level. This can reduce the risks of wastes and delivery delays. McDonald is also one of the successful companies that uses SCS where they ensure to be on same page as their suppliers in long-term. They will hold meetings where they can openly discuss and make decisions hoping what’s best for their system.
SCS helps organization with decreasing the time it takes to for products to reach to customers. Time-to-consumer is important as it is better if the time it takes for customer to get their goods decreases to ensure they are satisfied. This ensure the efficiency of the product flow. Amazon, since it’s been founded, has skyrocketed its annual revenue from $7 billion to $136 billion in of more than 10 years by using supply chain system. It has a delivery option where customers can choose when they want their products to be delivered making it quick and efficient as they can plan at what time they want reducing waiting time.
A good SCS ensures that the relationship between the suppliers and customers with organization by having uninterrupted information flow since it can lead to poor relationships and great costs if otherwise. Fragmented supply chain with scarce information flow costed at least £1.2 billon. (Oracle, 2010) With smooth information flow, organization can evaluate the value of information sharing and enforce solutions to fill gaps. Coca-Cola, with a successful SCS, aims to meet customers’ expectation by trying to catch with trends, technologies and processes. They maintain their relation with their supplier through frequent meetings with their major suppliers and with customers by changing their market to an on-demand market where they will provide what the customers want.
In conclusion, supply chain system deals the organizations’ relationship with their suppliers to ensure that they gain a competitive advantage over other organizations in the global world. Having supply chain ensures low cost, quality of goods with equal standards, better relations with suppliers for better responses, reduced time for delivery and also uninterrupted information flow between suppliers and customers. These benefits makes a difference between a successful organizations and a struggling one based on how they adapt and maximize the use of these benefits to maintain their supply chain from start till the end.