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GLOBALISATION
OF MANUFACTURING INDUSTRIES THROUGH
WEB - BASED SUPPLY CHAIN MANAGEMENT
S.
Balasubramanian
Teaching Research Associate
School of Management
Anna University,
Chennai - 600025
E-mail:balasubu007@hotmail.com
Phone: 2351445 |
Dr.
R. Radhakrishnan
Assistant Professor
Department of Mechanical Engineering
Anna University,
Chennai - 600 025
E-mail: rrk38@hotmail.com
Fax: 91-44-2350397 |
Dr.
D S Roosevelt
Scientist - EII
Central Leather Research institute
Adyar, Chennai - 600 020
India
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Abstract
This paper illustrates how the web technology can help coordinate
the supply chain activities in manufacturing and Purchasing. Web
based information related manufacturing organization using the
right information to know what products to make, when to make
them, and then making them the best possible product. Supply chain
management is emerging as an important business process to gain
and sustain competitiveness in industries like footwear manufacturing
industries. Supply chain of a company starts at its supplier’s
premises and ends at that of its customers. Production-distribution
system is an important segment in the supply chain management
for multi product organization. The term supply chain management
is used to describe the management of “material suppliers, production
facilities, distribution services and customers linked together
via the feed forward flow of information and the feedback flow
of materials”. The nature of competition is rapidly changing,
and with this change comes the need to redefine and reappraise
the modes of management prevalent, so as to equip ourselves with
more appropriate ways to manage in the 21st century. Web based
supply chain have become the nerve center of most manufacturing
systems and provide the enterprise infrastructure for integrating
manufacturing operations with related business processes, such
as filling orders or product development. Web enabled supply chain
provide a quick response to customer demand and market opportunities.
The supply chain itself has been described by other authors as
“ a network of facilities that performs the functions of procurement
of material, transformation of material to intermediate and finished
products, and distribution of finished products to customers”.
SCM is a customer-oriented approach, designed to deliver maximum
value to the customer.
Keywords: MIS (Management Information system), SCM (Supply chain
management), JIT (Just-in-Time), ERP (Enterprise Resource Planning),
SCN (Supply Chain network)
Introduction
Supply chain consists of the network of organizations that connects
supplier and end-users. It provides the route through which raw
material is converted into finished good into the hand of customers.
The concept of supply chain management is important because it
provides a framework for the integration of information, material
and finance of the enterprise, from right from the suppliers to
the customers. Figure 1 shows the flow of supply chain management.
Supply chain management encompasses management of all the elements
and activities of the supply chain. This includes material suppliers,
production facility, distribution, services and customers; linked
together via the feed- forward flow of information and the feed-back
of materials [Evans, 1995].
Globalized
Manufacturing
The supply chain term is being extended to international /global
supply chain. Figure 2 shows the globalize view of supply chain
integrated with production facility. Most of the manufacturing
companies have global customer / supply base. For example leather,
textile, automobile and electronic industries.
Inventory System and JIT Purchasing
Inventory represents the largest single investment in assets for
most manufacturers, wholesalers, and retailers. There are typically
five categories of inventory. These include raw material and semi
finished item inventory; work-in-process inventory; finished goods
inventory; maintenance, repair and operating (MRO) supplies inventory;
and in-transit /pipeline inventory. The implementation of a just-in-time
(JIT) purchasing system can have a tremendous impact on a firm's
inventory management. In fact, some sources refer to a just-in-time
system as a zero-inventory system because of the goal of virtually
eliminating the storage of production inventory. In JIT, stable
production schedules sent to the supplier on regular basis. Benefits
of JIT purchasing are given below
• Reduced part costs
• Improved quality
• Responsiveness to design requirements
• Productivity improvement
• Responsiveness to customer needs
Web
- based Supply Chain Management Environment
There are four common approaches for evolving a web-based supply
chain management.
Internal integration
- Integrated
system ( e.g., ERP solutions such as people soft)
- Link functions
such as purchasing, manufacturing ,inventory, marketing
- Shared
data and integrated processes
Intra-firm
integration
- Inter-organizational
information system, such as extranet
- Link firm's
system with external entities through web technology - suppliers,
distributors, retailers, etc.
World
wide integration
- e-commerce(Business
to Business, Business to Customer)
Figure 3 shows the web enabled supply chain management process.
In the web-enabled view, all supply chain management processes
are available in web server.
Supply Chain Analysis and Management for Manufacturing Industry
The term logistics is responsible for the physical
movement of all materials through an organization. Materials can
be raw materials, components, sub-assemblies, parts, tools, consumables,
services or any other types of item. Logistics really looks at
three types of movements.
- Movement
of raw materials
- Movement
of Work-in-Process (Handling, movement and storage of goods
during operations)
- Movement
of finished Goods
Logistics controls the flow of materials through
an organization on their journey from suppliers, through operations,
and on to customers. Supply chain management (SCM) is basically
oriented towards the control and co-ordination of three flows
namely, material flow, information flow and cash flow. Figure
4 shows the typical elements in a supply chain design for shoe
manufacturing company.
Client / Server MIS
Figure 4: Typical supply chain design in shoe manufacturing company
Supply Chain Network (SCN) and Web-Infrastructure
To implement information sharing, an infrastructure
is needed to support the various information requirements of the
SCN processes. Figure 5 shows such a framework for supporting
web-based supply chain networks. The enterprise information system
supports supply chain processes and process coordination within
and between enterprises. In addition, the framework also includes
(1) A global information network for supporting various electronic
services, such as brokerage and contracting, payment and banking,
transaction processing, E-governance (2) Electronic access to
external data. (3) Electronic connections to customers that support
activities such as filling orders and customer service. Increasingly,
the way to integrate these infrastructure components is to use
the web infrastructure supported by the Internet. Using the web
infrastructure, Intranet supports intra-organizational business
processes. Extranets, on the other hand, connects enterprises
to their partners and the Internet link the enterprises to their
customers, other institutions, and agencies. The webs facilitate
information sharing and process integration by providing the web-based
infrastructure. The distinct feature of web-enabled information-based
manufacturing is its capability to adapt and react. The goal of
information sharing is coordination between people’s who are conducting
business through web-based system. (4). e-CRM, e-Marketing
Conclusion
Web Technology based supply chain management
facilitates cross-enterprise information sharing through interconnectivity
(World Wide Web) and integration. The focus of this paper is to
show how web technology improves information based manufacturing
through information sharing and supply-chain co- ordination. In
Indian manufacturing sector, supply-chain management is a very
essential tool for re-engineering the industry based on information
sharing and process co-ordination. The benefits of supply-chain
management can be harnessed by better integration of supply chain
in terms of information, material and money flow. Better co-ordination
of different functions is possible through ERP Implementation
/ SCM solution.
References
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B.M, 1999, " Measuring supply-chain performance",
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Figure 5: supply-chain information infrastructure
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