A01 chaf6542 06 se fm indd

Question

Select a manufacturing sector and then evaluate the 

benefits and risks of applying RFID in this sector.

M06_CHAF6542_06_SE_C06.indd   291

7/23/14   12:22 PM

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292

Part 2  Strategy and applications

Summary

1. 

Supply chain management involves the coordination of all supply activities of an 

organisation from its suppliers and partners to its customers. Upstream supply 

chain activities (procurement and inbound logistics) are equivalent to  buy‑  side 

e‑commerce and downstream supply chain activities (sales, outbound logistics 

and fulfilment) correspond to  sell‑  side e‑commerce.

2. 

There has been a change in supply chain management thinking from a  push‑ 

 oriented supply chain that emphasises distribution of a product to passive 

customers to a  pull‑  oriented supply chain that utilises the supply chain to 

deliver value to customers who are actively involved in product and service 

specification.

3. 

The value chain concept is closely allied to supply chain management. It considers 

how value can be added both between and within elements of the supply chain and 

at the interface between them.

4. 

Electronic communications enable value networks to be created that enable 

the external value chain to be dynamically updated in response to marketplace 

variables.

5. 

Supply chains and value chains can be revised by disaggregation or re‑ aggregation. 

Disaggregation may involve outsourcing core supply chain activities to external 

parties. As more activities are outsourced a company moves towards becoming a 

virtual organisation.

6. 

Electronic communications have played a major role in facilitating new models of 

supply chain management. Technology applications that have facilitated supply 

chain management are:

● 

Email

● 

 Web‑  based  ordering

● 

EDI of invoices and payment

● 

 Web‑  based  order  tracking.

7. 

Benefits of deploying these technologies include:

● 

More efficient,  lower‑  cost execution of processes

● 

Reduced complexity of the supply chain (disintermediation)

● 

Improved data integration between elements of the supply chain

● 

Reduced costs through ease of dynamic outsourcing

● 

Enabling innovation and customer responsiveness.

8. 

Intranets connecting internal business applications such as operational enterprise 

resource planning systems and  decision‑  support‑  oriented data warehouses enable 

supply chain management. Such systems increasingly support external links to 

third parties such as suppliers.

9. 

Key strategic issues in supply chain management include:

● 

Redesigning supply chain activities

● 

Restructuring partnerships which support the supply chain through outsourcing 

or ownership.

Exercises