2.4 Supply Chain Management

This is about supplier and consumer. A company which produces goods needs parts from suppliers. Supply chain management helps both the supplier and the consumer. The ERP system of the consumer can communicate with the ERP system of the supplier. In this case the consumer can check the inventory which in fact is not his inventory but the suppliers inventory. Of course both parties must agree on how this is done.

With a good SCM inventory, costs can be lowered. Kotok and Webber [16] list a project called Collaborative Planning, Forecasting and Replenishment (CPFR) project. According to that project companies ``share'' more data and as a result they reduce expensive inventories and costs. The supplier company as an example has 10 big customers. With its customer data the supplier can optimise its business dramatically. The customers share their planning data, their forecast data, maybe even their planned specials (which means a temporaly higher demand). With this data the supplier can optimise its inventory. The supplier can plan and forecast better. The supplier knows what, when and how much its customers need. So the supplier can provide the goods on time, thanks to the information of its customers. The customers can expect to have the goods delivered on time. The supply chain can spread across multiple hops in the value-added business chain.