Electronic Supply Chain Management has experienced ups and downs during the past few years due to global disease. In spite of that, this sector is still expected to strongly thrive in the next years. Electronic Supply Chain Management (usually shortly called e-supply chain management or e-SCM) can be more diverse to reinforce their resilience as well as enhance efficiency.
Every sector has its own pros and cons and so does e-SCM. Below here are the benefits as well as weaknesses of supply chain service that you should know. Prior to diving into the details of the pros and cons, it is better to understand what an e-supply chain means.
What is Electronic Supply Chain management about?
Electronic Supply Chain Management indicates the process of providing goods and services from the manufacturers to consumers. This providing process is from wholesalers or retailers through the Internet.
E-SCM for worldwide businesses
E-SCM is a technological adaptation to supply chain activities and supply chain management operations. The Internet does also play a significant role in transferring goods and services from manufacturers to end users. This is how e-SCM is born.
The benefits of Electronic Supply Chain Management
Here are the benefits that are believed to be the strengths of e-SCM:
The supply chain service is usually less costly
Outsourcing tasks to other countries for some advantages has been a preferred thing in the supply chain. Those advantages are diverse. For instance, there will be a decrease in the costs of labor as well as the costs of supplies.
The reason why there are outsourced tasks is due to the increase in labor costs. Therefore, a large number of supply chains tend to choose to use outsourcing services to hope for cheaper materials.
It is important to make the supply chain more diverse for working on a worldwide scale. By doing so, you can approach a broader market. Then, finding less-costly materials is within your reach. Besides finding supplies through the worldwide market, you can also find more electronic components.
Have more chances to connect to more trusted supply chain partners
Once you have diversified your e-SCM, you have more chances to reach further electronic component suppliers as well as more supply chain partners. It is good to expand your network because working with more partners will help to improve the services. Besides, it also promotes competition for businesses.
Therefore, instead of just collaborating with local partners, it is always better for supply chains to find and connect to more partners in the world.
Electronic Supply Chain Management helps to transfer goods and services much faster
There is no denying that e-SCM has faster delivery times. This is thanks to having producing facilities sited at worldwide areas. When you reach more worldwide areas, you will find it easy to transfer your goods and services to the end users without taking a longer period of time. Aside from that, the shipping costs to the end users will also be dramatically decreased.
E-SCM pros & cons
In spite of having some benefits, Electronic Supply Chain Management still faces some small disadvantages
Below here are the disadvantages that supply chain service usually encounters.
It is hard for the supply chain to control the quality well
The international supply chains indicate that consumers will set a distant relationship with the suppliers. Whether it is a stable relationship or not, the communication between two parties may face issues like different time zones for instance.
When the communication faces challenges or both sides cannot catch up with each other, the quality control will be in bad condition. Global supply chains will also find it hard to manage the quality due to disasters or crises.
E-SCM may pose a threat to cyber security
Electronic Supply Chain Management mostly depends on data transmission. There are various documents in this transmission, for instance, invoices, networks, etc. Therefore, this easily leads to a risk of cyber attacks.
When cyber attacks happen, the information exchanged between two parties will be insecure, causing e-SCM to be in danger.
Fluctuated currency exchange rates for global supply chain service
The currency exchange rates are not always stable. Instead, it fluctuates frequently, leaving a big influence on profitability.
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