The Importance of Planning, Sourcing, Inventory, and Transportation for SCM
Supply Chain Management and Its Role in B2B eCommerce
Any business needs to have supply chain management in place to be successful. Supply chain management refers to procurement, manufacturing, and distribution of products from suppliers to customers. This is the general one-liner answer on supply chain management's role, but what does it mean?
Also, how does a supply chain management system in place benefit business success and eCommerce? This article will provide answers to these questions, elaborating on supply chain eCommerce's role and benefits on business success for the business-to-business eCommerce model (B2B eCommerce).
The Basics of SCM
B2B supply chain management (SCM for short) covers all stages during commerce, from procurement of raw materials to delivering a product to a customer. Product manufacturing, warehousing, inventory tracking, order entry, and management are parts of SCM and distribution of the right product to the right customer at the right time.
When it comes to eCommerce, SCM is also handling the eCommerce platform's front-end, virtually connecting the dots between the customer and the supplier.
How SCM Helps
A successful B2B eCommerce SCM should be based on an effective strategy and applied tactics, serving both the business and the customers. Especially in B2B eCommerce, efficient SCM is key, as eCommerce takes place among businesses, where delivered goods can be further distributed to customers, or used to produce other products, and so on. This means that a company's SCM system could be interconnected to that of another, creating dependencies.
Synchonize With Your Partners
Each of the activities covered by SCM should be conducted in harmony with the others, especially the directly dependent ones. Think of baking a cake for a friend as an example, you cannot mix ingredients if you have not bought them or measured them, and you cannot bake the cake if you have not pre-heated the oven.
If you realize that something is out of stock while you buy ingredients, you will need to either check other stores, check alternatives for that ingredient, or even postpone baking. If someone comes knocking on your door while your cake is in the oven, you might want to consider keeping an eye on the time while chatting or set up an alarm to make sure the cake does not burn. With the cake being ready, you will have to figure out how to transport it to your friend's house.
Keep Communication Lines Open
These action examples and many more can be translated to a supply chain in B2B eCommerce for activities related to manufacturing or distribution sectors. Several departments of a company or even separate business entities will have to be in constant communication orchestration to lead to successful business transactions. These interactions will be on a high percentage governed by demand, as communicated from the eCommerce customer interface.
Another important parameter for SCM interactions is supply, which can affect cost and time, both factors of extreme importance for business success. An effective SCM system needs to monitor supply and demand constantly and try to adapt necessary stages to find the best balance between covering customers' needs timely and cost-effectively, simultaneously maintaining business profitability.