B2B Integration : A Practical Guide to Collaborative E-commerce

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Supply Chain Management (SCM) 413 review, passes it on to the purchasing agent for procurement. The purchasing agent then contacts the appropriate supplier from the approved list of suppliers, considers various factors such as competitive rates, quality, quantity available and lead-time and then issues a purchase order to the supplier. The supplier acknowledges the purchase order, giving details including the date of shipment and mode of transport. The purchasing company warehouse receives the goods in due time and after proper verification, delivers the same to the requisitioner and reports the delivery and acceptance of goods to the accounts department. Simultaneously, the supplier also sends the accounts department the invoice for the goods shipped and accepted by the warehouse. The accounts department then issues instructions to the bank for payment in accordance with the terms of payment agreed upon with the supplier or as mentioned in the purchase order. 14.2.4. Activities in a supply chain A supply chain involves three-tier activity (see Figure 14.3): • Upstream activities; • Internal activities; and • Downstream activities. Upstream activities The first part of a supply chain involves activities, such as material and service inputs of upstream external suppliers who provide raw materials, component parts, end products, services, infrastructure support and computer technology. While most companies rely on one level of suppliers, manufacturers depend upon a complex hierarchy of suppliers in their supply chains. The number of suppliers involved in a manufacturing process is much larger than in any other sector as the product produced tends to be more complex. For example, a typical automobile manufacturer may depend on 60,000 to 100,000 suppliers, due to the requirement of enormous number of parts which make up the end product. As the products are
414 B2B Integration — A Practical Guide to Collaborative E-commerce ?*Tier Suppliers Upstream Internal Downstream 2" Tier Suppliers l**Tier I 1" Tier Suppliers I Suppliers Assembly/ Manufacturing & Packaging I Distribution Centers Ret; ilers 4 Customers 2"" Tier Suppliers Figure 14.3. — Supply chain activities linked to raw materials, manufacturers are linked with their suppliers' information systems for their inventory and replenishment and other issues which are directly relevant to the manufacturing process. Internal activities Internal activities involve the conversion of raw material procured from suppliers into finished product. These are processes to convert raw material procured from the suppliers into finished product. The synchronization of various internal activities at different levels has to be very agile and harmonious, especially in a big organization. Different functions, such as production planning, demand forecasting, manu facturing, order processing, packing of goods and maintenance, need the utmost care and vigilance.
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Chapter 2 Components, Benefits, Cha
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Chapter 4 Enterprise Application In
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Chapter Q Extensible Markup Languag
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Chapter Q Integration Brokers The f
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Chapter "] 2 Wireless Technologies
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B2B Integration : A Practical Guide to Collaborative E-commerce

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