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Supply chain's emerging trends.

Article Excerpt
EXECUTIVE SUMMARY

Described are several technologies for intra-organizational coordination that can enhance the effectiveness of supply chains. The Semantic Web and radio-frequency identification can greatly improve supply chains. The benefits of aggregating data along supply chains and supply chain decision databases are also described.

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Every finished product has gone through a series of transformations. The process begins when manufacturers purchase the raw materials that will be transformed into the component parts of the product. The parts are then supplied to a manufacturer who assembles them into the finished product and ships the completed item to the consumer.

A supply chain can be defined as the series of activities involved in the transformation of raw materials into a final product that is purchased by a customer. While the flow of materials, component parts, and products moves downstream (from the initial supply sources to the end customers), the flow of information regarding the demand for the product is moving upstream (from the end customer to the initial supply source). The flow of information regarding availability of physical goods, pricing, and the status of orders is moving downstream. Within the supply chain, there are many different organizations performing unique activities. For each organization in the supply chain, its customer is the succeeding organization in the supply chain and its subcontractor is the preceding organization in the chain.

It is advantageous to the many companies in a supply chain to coordinate their activities, and information technology makes firm-to-firm coordination of activities feasible. This coordination of activities is the core of supply chain management.

Technologies for coordination

Supply chain planning software coordinates, plans, and optimizes intra- and inter-organizational activities related to manufacturing, demand, supply, and transportation of products and materials along supply chains.

To optimize the effectiveness of integrating and coordinating inter-organizational activities along supply chains, companies should first integrate their intra-organizational activities. Enterprise resource planning software systems are designed to link, integrate, and improve the coordination of various business activities of enterprises.

Internet-based electronic data interchange software is designed to automate inter-organizational communication and thus improve the effectiveness of supply chains that are in reality virtual organizations. EDI is the computer-to-computer inter-organizational communication of business transactions in a standard format. With EDI, order information placed by a company is transmitted directly from the company's computer to its suppliers' computers. Suppliers' billing information is transmitted directly from the supplier computers to the ordering company's computer. EDI technology is helpful in concurrent engineering by allowing instant transfer of graphic files among computer-aided design systems of manufacturers and their subcontractors.

The transmitted data must be sent in a standardized format so that data files from the computers of different organizations can flow smoothly Furthermore, all the application software that is involved...

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