Digital Business – Weekly Assignment

Summary Chapter 6
Aileen Irmina P (19/440371/EK/22297)
Supply chain management capabilities are important for delivering profitability for the
company, mainly on e-procurement and sell-side e-commerce. E-procurement is the electronic
integration and management of all procurement activities (purchase request, authorisation,
ordering, delivery & payment). E-procurement improving five rights of purchasing include: at
the right place, delivered at the right time, of the tight quantity, of the tight quality, from the
right source. Before e-procurement, there was EPS (Electronic Procurement Systems), an
electronic system used to automate all or part of the procurement function. Inventory turnover
is an indication of efficiency of inventory turn calculated by the cost of goods sold divided by
the average inventory.
Supply chain management is the coordination of all supply activities of an organisation
from its suppliers and partners to its customer. Upstream supply is the transaction between an
organisation and its suppliers. Downstream supply is the transactions between an organisation
and its customers. Supply chain network is the links between organisation and all partners
involved in multiple supply chains. Four pillars of supply chain success are customer centric,
powered by people, transformed by technology, and resilient and responsive. Efficient
consumer response (ECR) is creating and satisfying customer demand by optimising product
assortment strategies, promotions and new product introductions. Vendor-managed inventory
(VMI) is when the supply chain partners manage the replenishment of parts or items for sale
through sharing or information on variations in demand and stocking level for goods used for
manufacture or sale. Inbound logistic is the management of material resources entering an
organisation from its suppliers and other partners. Outbound logistics is the management of
resources supplied from an organisation to its customers and intermediaries. Push supply chain
is that emphasises distribution of a product to passive customers. Pull supply chain is that
emphasis on using the supply chain to deliver value to customers who are actively involved in
product and service specification.
Benefits of deploying digital technologies include: more efficient, lower-cost execution
of processes; reduced complexity of the supply chain (disintermediation); improved data
integration between elements of the supply chain; reduced costs through ease of dynamic
outsourcing; and enabling innovation and customer responsiveness. E-procurement is intended
to achieve reduced purchasing cycle time and cost savings.