An Online Class Everyone Needs to Take: E-Commerce and Supply Chain Management

Contributed by Estelle Shumann

E-commerce and supply chain management might sound like the subtopics of specialized supply chain bachelor degree programs, they are in fact common courses in many business-oriented programs. As the Supply Chains Rock blog points out in an October 2006 post, conducting business in emerging global markets requires a knowledge of supply chains and the ways in which they function in other regions. In today’s post by Estelle Shumann, she takes a closer look at how e-commerce and supply chain management affect many businesses.

E-commerce and Internet applications have done a lot when it comes to streamlining corporate functions, and nowhere is this perhaps more evident than when it comes to the supply chain. Supply chains are basically the journey any product takes from basic production and assembly to final point of sale, where it ends up in the consumer’s hands. Most modern business models focus on ways to use the Internet to create better marketing, sales, and branding strategies. Leveraging available networks and software platforms to improve the efficiency of the supply chain can also be hugely beneficial, however, allowing companies to save both money and time. The result is often consumers who are better served and more content.

The supply chain is a major—though often undetected—part of any development and sales strategy. It typically involves a number of key players, many of whom the final retailers have no contact with or control over. Britain’s Open University describes the supply chain as a series of related interactions. It is, the university says, “a set of relationships between a number of companies who have a symbiotic relationship with each other in that one company supplies commodities or services to other companies which, in turn, supply commodities or services to other companies, and so on.”

Basically everything from the mining of raw ingredients to the production process for the packaging—not to mention all the transportation needed to move things from place to place—falls within the wide umbrella of the supply chain. Effectively managing this process usually requires a bit of savvy, and a lot of know-how.

It is very important for entrepreneurs to get a firm grasp on supply chain management well before their new company gets too deep into development and delivery. In most cases, success in the chain means success in the shop—though all too frequently, the opposite is also true.

Fortunately, supply chain management is one of many things made easier by the Internet. A new range of tracking tools and product management software programs make coordinating and monitoring different parts of the process as easy as logging in and sending e-mail, and responses are often instantaneous.

A number of emerging Internet-based programs also alert different players about shortages, which can avoid production delays and backorders. “In this way, the distributor never has to worry about running out of a product and disappointing customers and the supplier doesn't have to worry about maintaining a large inventory in expectation of demand,” supply chain technology company Epiq says on its website.

The Internet makes it easy for entrepreneurs and business leaders to quickly make consumer-facing adjustments, as well. “Providing on-line product and other information across the supply chain allows flexibility on price, product portfolio and promotions,” a paper published by two professors at Northwestern University’s Kellogg School of Management asserted. “The Internet makes information located at a central source available to anyone with Internet access, so that a change in price, product portfolio or promotions only requires one database entry,” the paper said. “A traditional mail order company would need to mail new catalogs to all customers to change prices or products.”

The benefits of managing a corporate supply chain online are enormous. Companies save time and money, both of which can be reinvested in improving the consumer experience. The increased choices in today’s marketplace make competition and customer satisfaction more important than ever before. Investing in management technologies—and taking the time to learn them—is usually a decision that pays for itself in short order.