Topic 8: e-Supply Chain Management

Supply Chain Management (SCM) is the process of planning, organizing, implementing, and controlling the operations of the supply chain as efficiently as possible. It encompasses all activities involved in sourcing, procurement, conversion, and logistics management — coordinating suppliers through to final delivery to customers.

An effective SCM optimizes three core flows: Information Flow, Product Flow, and Cash Flow.

Era	Key Development
Creation Era	Term coined by Keith Oliver (1982); focus on large-scale re-engineering and cost reduction; influenced by Japanese management practices
Integration Era	Emerged with EDI systems (1960s); matured with ERP systems (1990s); added value through integration and cost reduction across 3 stages (isolated → ERP → vertical integration)
Globalization Era	Supply chains extended beyond national borders; global sourcing for competitive advantage and cost reduction
Specialization Era I	Companies focused on core competencies; OEMs became brand owners; popularization of vendor-managed inventory
Specialization Era II	Transportation brokerages and warehouse management; evolution from ASP → on-demand → SaaS delivery models
SCM 2.0	Web 2.0-inspired; supply-chain collaboration platforms; connects buyers, suppliers, financial institutions for automated supply-chain finance transactions

Aspect	Push Model	Pull Model
Basis	Forecast-driven production	Customer-demand driven
Aim	Optimize cost and efficiency	Enhance product/service quality
Inventory	High inventory levels	Low inventory levels
Cycle time	Long response times	Short cycle and response times
Technology	Limited EDI; independent data management	Extensive EDI and e-commerce; integrated systems
Research	Manufacturer-led NPD	Market-research driven

• Level 1 — Improving internal processes (cost reduction in sourcing/logistics within a single business unit)
• Level 2 — Dismantling internal silos; corporate integration; departments collaborate to synchronise procurement, processing, and shipping
• Level 3 — External, customer-centric view; customer satisfaction becomes the key supply chain success metric
• Level 4 — Trading partners and suppliers are involved; beyond buy/sell agreements; information sharing to achieve shared customer goals
• Level 5 — Fully automated inter-business connections; electronic information exchange; real-time inventory visibility reduces forecasting errors

Period	Model	Key Features
1960s–70s	Physical Distribution Management (PDM)	Managed stock, warehousing, order processing as related activities; paper-based systems; early use of EDI on point-to-point basis for purchase orders and invoices; limited to finished goods only
1970s–80s	Logistics Management (MRP & JIT)	Just-In-Time seeks minimum stock and flexible manufacturing; Materials Requirement Planning (MRP) maintains optimal resource levels; lean production eliminates waste; design for manufacture simplifies components
1980s–90s	SCM & Efficient Consumer Response (ECR)	Closer integration between suppliers, customers, intermediaries; maximising efficiency and stock availability; SAP ERP systems automate ordering and distribution; technology reduced need for warehouses near markets
1990s–2000s	Technological Interface Management (TIM)	ERP systems updated with EDI and XML interfaces; SAP mySAP for managing exchanges; XML as technical standard; intermediaries valued for information rather than inventory (Hagel & Rayport, 1997)

Founded in 1995, eBay is one of the world's largest online marketplaces with over 185 million active buyers and more than one billion listings, connecting individuals and businesses globally across categories including electronics, fashion, home & garden, and automotive.

For Buyers	For Sellers
Trust	Access to broad global markets
Value	Efficient marketing and distribution
Selection	Opportunity to increase sales
Convenience	Low barrier to entry

DSR is a feature where buyers rate sellers on four criteria:

• Item as described
• Communication
• Delivery time
• Postage and packaging charges

DSR improves the conversion rate by encouraging sellers to provide accurate descriptions with better pictures and avoiding excessive shipping charges, thus enhancing the positive shopping experience.

The main risk factor for eBay is Fraud. eBay counters this through Trust and Safety Programs that are critical for reassuring customers in an online environment prone to fraud. Key mechanisms include:

• eBay Feedback Forum — community-driven reputation system
• Top Seller Status — badge system rewarding reliable sellers

1. Register / log in at www.ebay.com and click the Sell button
2. Enter what you are selling; eBay provides category recommendations
3. Select a category (recommended or from all categories)
4. Choose a matching product from the library or "Continue without match"
5. Fill in product details: Photos/Video, Title, Item Specifics (Style, Brand, Type, Theme, Color, Material), Condition, Description
6. Set Pricing (Buy It Now or Best Offer), Quantity, and optional Volume Pricing
7. Configure Shipping (domestic and international), handling time, and return policy
8. Set Payment preferences; optionally enable Promoted Listings
9. Click "List it" — the listing goes live and appears under the Active tab in My eBay Selling

In most organisations, the supply chain has two sides:

• Upstream supply chain — activities from suppliers to the organisation (equivalent to buy-side e-commerce; inbound logistics)
• Downstream supply chain — activities from the organisation to the customer (equivalent to sell-side e-commerce; outbound logistics)

SCM also includes intermediaries — supplier's suppliers and customer's customers. Technology is vital as it manages the flow of information and transactions between all these parties.

Functionality	Description
Purchasing	Process of buying materials needed for manufacturing. Requires close communication and coordination between manufacturer and supplier to ensure timely delivery.
Operations	Day-to-day activities including demand forecasting. Accurate forecasting must align with inventory management and production schedules to manufacture the right amount of product.
Logistics	Coordination of warehousing, inventory management, and transportation. All participants must communicate effectively to ensure products reach consumers timely and in the right form.
Resource Management	Planning, organizing, and controlling resources (labour, raw materials, technology) throughout the manufacturing process. Right resource allocation to the right activities optimises the entire system.
Information Workflow	How information moves between supply chain members. Poor communication causes disruptions, delays, and mistakes. A systematic approach ensures the right company has the right data at the right time.

• SAP Supply Chain Management
• Infor Supply Chain Management
• Blue Yonder
• NetSuite SCM
• Shippabo
• Magaya Supply Chain
• Logiwa WMS

Aspect	eBay	Daraz
Founded	1995, global	South Asian market (Sri Lanka, Pakistan, etc.)
Registration	Simple online form (name, email, password)	Phone-based + ID & bank verification required
Verification	Minimal at signup	ID card (front & back) + bank passbook/statement
Listing Cost	Free to list; final value fee on sale	Free registration and listing
Shipping	Seller arranges; buyer pays or seller absorbs	Daraz logistics network (Fulfillment by Daraz)
Payment	Managed by eBay	Directly to verified seller bank account
Seller Tools	Promoted Listings, DSR, Top Seller Status	Seller Center, Daraz University, Ad Solutions

1. Register at sellercenter.daraz.lk using phone number
2. Add Profile (Store Name, Email)
3. Add Address
4. Verify ID & Bank — upload ID card (front/back), bank passbook/statement, account details
5. Add Product — after verification, list products with images, description, variants, price & stock

FBD is a service where Daraz is responsible for processing, packing, and shipping seller orders. Products are stored in the Daraz warehouse and only a shipping fee is charged per order shipped.

FBD Process Steps:

1. Seller sends products to Daraz fulfillment center
2. Daraz stores the products
3. Customer places an order
4. Daraz manages packaging and handling
5. Daraz delivers the product to the customer
6. Return management is handled entirely by Daraz

Benefits of FBD:

• Improves customer satisfaction by speeding up fulfilment time
• Higher sales lead to a higher conversion rate
• Saves cost and time — no warehouse or additional employee cost for the seller
• Easy business expansion through unlimited Order Volume Limit (OVL)

• Adding and managing products
• Overseeing orders (Pending, Ready to Ship, Delivered, Returned, etc.)
• Handling stock and inventory
• Joining promotional campaigns
• Using seller tools (Ad Solutions, Seller Advisor)
• Contacting the seller support team
• Accessing Daraz University for training