CRG Global would like to introduce the article by Mr Le Ngoc Quang, BDO VIETNAM SOLUTIONS DIRECTOR and CRG Global expert.
Supply chain management
Supply chain management (SCM) is the management of the flow of goods and services from the suppliers to customers. It involves the active streamlining of a business's supply-side activities to maximize customer value and gain a competitive advantage in the marketplace. SCM represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production to product development to the information systems needed to direct these undertakings.
In here, we may define the "company" means the manufacturer or main supplier of the whole supply system, including all its internal activity.
Standard SCM
A supply chain is the connected network of individuals, organizations, resources, activities, and technologies involved in the manufacture and sale of a product or service. A supply chain starts with the delivery of raw materials (or simple the goods) from a supplier to a manufacturer and ends with the delivery of the finished product or service to the customer. With so many places along the supply chain that can add value through efficiencies or lose value through increased expenses, proper SCM can increase revenues, decrease costs, and impact a company's bottom line.
The digital applications used for the standard SCM may be ERP, some specific SCM for each business models or industries and maybe integrated or not with ERP (usually and recommended to be integrated).
Distribution Chain Management
Any manufacturer wants to sell more products and to win the competition, so he has to control more the supply chain. The distribution chain is a farther chain that has more links until the retailer and should be organized more complex than standard supply chain.
The distribution chain includes series of businesses or organizations that are involved in transporting, storing, and selling goods to customers. For example, a manufacturer sells the product to a distributor who sells the product to retailers (stores) that then sell the product to consumers (endusers).
The Distribution Management System (DMS) is a general application for distribution chain management and plays very important role to help the distribution staff to work at low levels of the chain. The distributor level uasually has the role as principal company's stocks keeper. Since the company keeps very little inventory, its supply and distribution chains must be perfectly synchronized to fulfill customer orders successfully.
The digital applications used for general distribution chain may be DMS integrated or not with ERP. The DMS could be with mobile applications (Mobile DMS) for users to collect primary data easily at customer locations. The extra applications may be Mobile Delivery, Mobile Marketing...
Ecosystem of SCM
The distribution business ecosystem is the network of organizations, including suppliers, contractors, distributors, resellers, retailers, consumers, competitors, even agencies, and so on, involved in the delivery of a specific products or services through both competition and cooperation. Each company or person is an independent entity, functions separately but may have business relation or legacy one to the others which can help all the organisms to grow better together.
The digital applications in the ecosystem could be very complex or a centralized cloud base software system that can satisfy most of the requirements of each individual and the whole system.
In the SCM ecosystem, each company may have separately business activity, management system, DMS, SCM... but may have some common elements such as operation items, pairing companies which may clone automatically to the partner as related electronic documents.
This ecosystem may assist the companies have faster operation, more accurate data and better products planning...
Social SCM
It's difficult to imagine that the marketing, social media, social network and other relationship may take part in the supply chain but today it's not only possible but also necessary.
Nowdays, we may say about a new trend of SCM thanks to the fourth industry revolution. The digital technology, big data and artificial intelligence together with sharing economy will create a real "social supply chain" which can be built by main 4 elements:
- Connection: the social factors collaboration by social sales, social CRM, sales share, sales outsource, shipment share, etc.
- Location: created by the community of collaborative and in-house personnel with mobile apps will work at customers' location and also locate them.
- Management: the complex of advanced applications such as ERP, Social CRM, DMS with SCM ecosystem using big data and AI will bring the grate management system for company.
- Information: there are a lot of things that may help the fastest and correct data collection for the whole system such as cloning data, cloning documents, electronic documents, smart contracts, smart payment, block chain, etc.
Big goals of the advanced SCM
The company may get some big goals when reaches the level to have a realtime shops map with all distribution statements.
- Realtime collection data: most trustable data may ever have
- Centralized information: can manage and forecast the products correctly
- Shortest time: shortest time to satisfy market, shortest time to get real customers, shortest time for enduser to get the products
- Shortest distance: shortest distance for delivery, shortest distance to get real customers, shortest distance for enduser to get the products
- Correct measurement: the most accurate data that can have
- Maximize benefits: maximize the services, maximize the customer satisfaction and maximize profit.
Le Ngoc Quang (Just for ideas)
