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324 Chapter 11 • Supply Chain Management

happening. In sum, RFID is a growing technology that has yet to see its full potential. With
industries consistently driving to cut labor costs and increase speed and accuracy of data flow,
not implementing an applicable ERP RFID solution is money being lost. The data generated
from a RFID system are immense; ERP increases the speed and accuracy with which these data
can be useful for business decisions.

IMPLICATIONS FOR MANAGEMENT
Managers should understand that SCM is an important component for the successful implemen-
tation of ERP systems. It does not matter whether SCM is an external or internal component of
ERP as long as there is seamless integration between the two applications.
Balancing the supply chain efficiency and responsiveness is more an art than science. The
competitiveness of products and services in the global economy is increasingly measured both
by individual product or service characteristics and by the efficiency and responsiveness of
the supply chain of products and services in catering to differentiated customer requirements. In
the face of shrinking product life cycles, differentiation and diversification of customer require-
ments, and cost transparency and accountability, there is constant focus on supply chain efficiency
and responsiveness. For supply chain managers, this translates to a need for managing and
monitoring the partnerships in the supply chain with a strategic view to sense opportunities for
improvement and growth. This also translates operationally to the need for balancing customer
service requirements with the costs of operating the supply chain. SCM are complex systems
whose success often depends on external environment. These systems need to be integrated or
linked with the systems of a company’s trading partners, suppliers, clients, and other external
sources. The success of the system often depends more on standardization and agreed policy
between trading partners rather than on sophisticated information technology. Management
emphasis for IT departments should be on collaborative design rather than on a stand-alone
design for SCM systems.
E-supply chain provides great competitive advantage in today’s Web-enabled economy.
High-speed, low-cost, communication and collaboration with customers and suppliers are
critical success factors to managing the supply chain more effectively. The very essence of
SCM is effective information and material flow throughout a network of customers and suppliers.
The potential of e-supply chain for improved productivity, cost reduction, and customer
service are enormous. Of course, the benefits are based on effectively employing the right
processes and supporting IT. Providing the right amount of relevant information to those who
need to know it, and when they need to know it, is in fact effective SCM from information
point of view. Fast access to relevant supply chain information can pay off remarkably in lower
costs, reduced inventory, higher-quality decision making, shorter cycle times, and better
customer service. One of the biggest cost savings is in the overhead activity associated with a
lot of paperwork and its inherent redundancies. The non–value-added time of manual transac-
tion processing can instead be focused on higher revenue creation activities without
proportional increases in expense. The result in cycle time compression, lower inventories,
decision-making quality, and reduced overhead costs, among other benefits, makes e-SCM a
highly desirable strategy. Supply chain processes are more streamlined and efficient today. For
many companies, more effective e-SCM is where the profit and competitive advantages will
emerge and be sustained. For e-commerce to be successful, efficient fulfillment of orders and
good customer service are extremely important. E-SCM systems are critical components for
serving better back-end business processes in e-Business. Companies similarly will not be