The Internet Encyclopedia (Volume 3)

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SUPPLYCHAINMANAGEMENTTRENDS 395

database management system is required so that applica-

tions in different operating environments can participate.

Although not as robust as the message queue approach (it

generally does not facilitate real-time interaction), it does

provide a degree of application integration without having

to interface each application to the other individually.

NETWORKS

There are three levels of networks used to support supply

chain communication (Turcotte, Silveri, & Jobson, 1998):

intranets, extranets, and the Internet. An intranet is used

within the boundaries of a company. It contains sensi-

tive information restricted to those within the organiza-

tion. Proprietary systems, such as ERP and CRM, and the

data to run them are found on intranets. An extranet is

an external intranet shared by two or more companies.

Data shared among companies within a supply chain is

protected form the outside world on the extranet. This is

where many active collaboration activities are conducted.

The Internet is the public network we all know and use.

Data the supply chain members want to share with the

outside world is routed here.

DATABASES

Databases are an integral part of any information sys-

tem. In the supply chain environment, the database

management system should be standardized for all appli-

cations. It should also be an “enterprise class” database,

that is, one that can operate on multiple computing plat-

forms and is highly scalable.

APPLICATIONS

Applications involved in managing the supply chain

are varied in functionality and address information-

processing needs along the whole chain. Some operate

exclusively within a firm, whereas others are external to

the firm, most often linking members of the supply chain

together. Applications such as ERP provide comprehen-

sive sets of modules that cover a wide span of technology

processing within organizations. Others, like CRM, focus

on a specific area. A list of commonly used application

technologies follows. Many of these have been discussed

in this chapter, and more information about the others

can be found in the Further Reading section.

Advanced planning and scheduling


Active collaboration technologies


CRM systems


Data mining and warehousing


Demand management


Distribution resource planning


EDI


Enterprise resource planning


Groupware


Logistics network design and execution


Manufacturing execution systems


Supply chain simulation and optimization

Sales force automation


Warehouse management systems


Supply chain management solution providers

Solution providers in the SCM arena fall into three

basic categories: software providers, hardware providers,

and services providers. Any attempt to put together a com-

prehensive list of every firm involved in supply chain tech-

nologies would be fleeting at best. The most current re-

source for locating a company involved in a particular

area of interest is the Internet. There are a number of

Web sites dedicated to SCM, and virtually every SCM ven-

dor and service provider has a presence on the Web. A

fairly comprehensive list of companies and what they pro-

vide can be accessed at http://www.business.com, following the

links Home⇒Management⇒Operations Management

⇒Supply Chain Management (SCM).

SUPPLY CHAIN MANAGEMENT TRENDS

SCM technologies have evolved from internally focused

applications to widely dispersed external systems with

many participants. Communication and visibility are the

new challenges as members seek to collaborate across the

entire supply chain. Every member of the chain needs in-

formation from the other members. Information regar-

ding customer orders, forecasts, and component availabi-

lity must flow up and down the chain. Input for ERP, APS,

demand planning, and other systems needs to be readily

available to everyone. The visibility of this information,

providing the ability to monitor and control the supply

chain in real time is critically important. Focus must be

on total system performance for the benefit of the entire

supply chain.

SCM solution offerings are moving away from tightly

integrated technologies that try to do everything and

trending toward modular applications that can be inte-

grated with other products (Reddy, 2002). This reduces

the risk of implementation by focusing on a narrow area

of functionality. It also reduces the cost of getting started

with SCM. Businesses can start small and add modules

as required.

The linear supply chain model is being replaced by a

network (Web-like) model. The traditional model is se-

quential in terms of the product and information flow

(O’Brien, 2000), from one member to the next, up and

down the chain. The new model allows information to be

available to all members at once. It’s no coincidence that

the supply chain model is taking on the form of a Web. The

Internet has facilitated fully linked participants, allow-

ing the collaborative management necessary in today’s en-

vironment.

The Internet has spawned e-business applications for

buying, selling, product design, and collaborative plan-

ning. These technologies are playing ever more impor-

tant roles in optimizing supply chain performance. This

has changed the way supply chains are managed and con-

trolled, allowing different companies within the chain to

synchronize their planning activities and work together

toward common goals. At the same time, new channels

of distribution are emerging from the use of the Internet,