Indian Business Scenario - Opportunities and Challenges

Supply Chain Management: Integrated Consumer Demand Forecasting System *Dr.P.Paramashivaiah **R.Shashidhar ***Dr.Pramod Gonchkar *Professor & Chairman, Department of Studies & Research in Commerce, Tumkur University, Tumkur **Assistant Professor, Department of Studies & Research in Business Administration, Tumkur University, Tumkur ***Assistant Professor, Govt. R.C College of Commerce, Bangalore Abstract Rapid growth of e- commerce in the past years has given rise to number of business processes that leverage the system and speed of the Internet for better collaboration and participation among business partners.Integration of consumer demand forecasting process with Enterprise Resource Planning (ERP) of supplier by E commerce Web site leading to streamlining the supply chain. With supplier point of view, Accuracy level in forecasting the Market Demand will lead to better production planning, improving efficiency in procurement and inventory level .At the same time this process would also benefit E -commerce web site in optimizing its inventory cost and reducing delivery time to the End customers thereby causing enhancement in the customer satisfaction. Joint forecasting------ ERP of supplier-------- MRP of supplier ------- Production-----E commerce Website---End consumer Key Words: ERP (Enterprise Resource Planning), SCM (Supply Chain Management), Inventory, Forecasting, E-Commerce. Introduction Supply Chain Management is the process of planning, implementing and controlling the operations of the supply chain with the purpose of satisfying the customer's requirement as efficiently as possible. Supply Chain spans all movement and storage of raw materials, Work-in-process, inventory and finished goods from the point of origin to the point of consumption. Since the stake for the different players is extremely high making it imperative for the partners including suppliers, manufacturers, distributors and customers behave as if they are part of the same company. This way only they can enhance performance significantly across the chain. This amply defines the scope of supply chain management which has to monitor and control the activities right from customer's customer to supplier's supplier. Management of supply chain as such is management of various functions carried out in a continuous supply chain environment such as demand forecasting, production planning, procuring raw materials for production, manufacturing, managing inventory, processing input to convert into output and finally arranging smooth distribution of the finished product to the retailers. The geographic reach of Supply Chain Management is immense. Today, a firm producing readymade men's shirt procures the raw materials from African countries, gets manufacturing process done in Asia and sells the product in different parts of the world. With great strides being made in the way information is generated, disseminated and collected through the use of Internet , Emails etc great Supply Chains are Archers & Elevators Publishing House www.aeph.in 1

Indian Business Scenario - Opportunities and Challenges being witnessed in practically all the processing industries horizontally as well as vertically. From complex and multi supply chains witnessed in production of Iron and Steel , cement etc to small values retail products such as clothes, vegetables are getting into the domain of the supply chain , cutting across the boundaries of the nations. Very aptly, the supply chain has thrown up relevant educational courses and plenty of jobs in the area of procurement, inventory control, strategic planning, distribution, transportation etc. As the reach of Globalization expands so shall the domain of Supply Chain Management which is being recognized as a major competitive edge of business today. The importance of Supply Chain Management thus is in * Reduced inventories along the chain * Better information sharing among the partners * Planning being done in consultation rather than in isolation The benefits too would be reflected in terms of :

Lower costs Better customer service Efficient manufacturing Better trust among the partners leading to win-win

Process integration and other efforts result in improved quality as higher profit margins shall get reflected in creation of better facilities for manufacturing, product design research, and enhanced customer service. A well designed supply chain shall provide the following benefits :

Operations can be located in the best locations irrespective of customers locations Bigger facilities can be created and hence economies of scale can be thought of Large stocks need not be kept at the producer's end as the same can be kept with wholesalers near the customers Retailers carry less stocks as whole sellers provide them the materials whenever needed Lead times for retailers are short Uninterrupted availability to customers Transport is simpler and routine

Integrated consumer demand forecasting system In a typical, extensive supply chain there could be many sub-supply chains extending over a number of independent organizations to produce the final result that is of reaching out to the customer .If each organization involved in the chain looks only at its operations, ignoring others' the boundaries do exist resulting in inefficient movement of materials and incurring of higher costs. External integration removes such in general; there are three levels of integration.One that is a recognizable separate set of activities within an organization.Second, an integration within the organization and the third one an external integration, with an outside organization. Archers & Elevators Publishing House www.aeph.in 2

Indian Business Scenario - Opportunities and Challenges Joint forecasting------ ERP of supplier-------- MRP of supplier ------- Production-----E commerce Website---End consumer Joint forecasting system exercise would benefit both parties as it will reduce cost of inventory and transportation in big way. Both supplier and E-Commerce need to integrate their ERPS for accurate forecasting of sales from E commerce website perspective and raw material and finished product inventory with regard supplier. Methodology (Process of Integration) Step I Joint forecasting by both businesses partners (Supplier & E commerce Site) and collaborated sales Order Management- By synchronizing E comm. Site ERP with supplier ERP, supplier will know exact requirements of particular product during specified period of time. This would also help supplier in streamlining the inventory. Fore cast data exchanged between two ERPS will be integrated with Material requirement planning at production level. E comm. site can supply ready product on time to customer by reducing delivery time. Step II Integration of above process with ERP of suppliers- this is purely technological suggestion which needs more detailed research in to this concept by both supplier and E comm. site. Step III Capitalizing supply chain benefits by both supplier and E Commerce Web sitesBoth parties to analyze the significant economic benefits from the integration system and pass those benefits each other. Conclusion Increases the efficiency of order management system, this integration system enables the end customer to view the product and order the same immediately the product is launched from supplier there by reducing the time required for ECommerce site to get the information from Supplier. Reducing order-Delivery Cycle time. Integrated demand forecasting system improves customer satisfaction leading to repeat purchases, and effectiveness in the supply chain management. Future Research Scope Consumer demand estimation process by both supplier & E- Commerce. -There could be various methods adopted by both in forecasting their sales, but E- Commerce site need to calculate accurate forecasting to avoid high delivery time and high ordering time with supplier so both parties need take up precise system for forecasting consumer demand. Multiple suppliers ERP integration with E -Commerce Website - E- Commerce site will have many suppliers for its requirement so they need to integrate their ERP and CRM systems with all the suppliers for information flow in & out from the site. Delivery system- Supplier ---End consumer for Cost efficiency. - By integration E- Commerce site can send customer info to supplier via ERP and ask them to directly supply the product to end customers. here Archers & Elevators Publishing House www.aeph.in 3

Indian Business Scenario - Opportunities and Challenges research needs to be on cost benefit sharing and studying supply chain efficiency at supplier end. References 1) Modeling the supply chain by Jeremy F. Shapiro, Edition 2002 2) Supply chain Architecture by William T.Walker, CFPIM.CIRM.Ed:2005 3) Project papers, Business Journals and News papers. 4) Simchi-Levi D., Kaminsky P., Simchi-levi E, Designing and Managing the Supply Chain, third edition, McGraw Hill 2007. 5) Supply Chain Management by Drucker, 1998; Tapscott, 1996; Dilts, 1999

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