Business Logistics and the Supply Chain

Paper Summary:

This paper examines how, in order for manufacturing companies to be successful in the emerging e-business environment, it is necessary for companies to establish strong relationships within their supply chain. It looks at how a significant part of this process is improved information sharing on all levels of the chain and how the Internet allows for this integration of communication and information technologies from the factory floor to the top office and including the company's vendors and suppliers.

From the Paper:

"Manufacturing companies gather inventory for two main reasons: a lack of information from up or down the supply chain, and the variability of demand. If a company is unaware what its suppliers and clients are going to do, they will build up inventory to make sure that they have the needed product to continue building product. The variability of demand is influenced by factors such as spikes in demand driven by customer orders, manufacturing processes and logistical upsets that disrupt the flow of commerce (such as blackouts). Projected demand can fluctuate greatly day-to-day. One reason for such high variance is the proliferation of options, such as in automotive manufacturing. Limiting available options allows a company to improve their ability to forecast accurately. Better market analysis also allows for the company to better establish the customers' wants and needs."

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