The transformation of twenty-first century business is under way. At the heart of this wide-ranging transformation is the use of technology to digitize complex services provided by various organizations. Largely due to improvement in communications, globalization is dramatically impacting the way business is managed and transacted, even on the most local levels. No area of a business is affected more by the trend to a global business environment than the supply chain.

An effective supply chain is the new organizational and operational model for the "information age" as we call it. Supply Chain Management (SCM) is a business process that enables a virtual integration of business partners to achieve new levels of efficiency and productivity, as well as extraordinary returns to investors. The supply chain in SCM is made up of all the activities that are required to deliver products to the customer .i.e. from designing product to receiving orders, procuring materials, marketing, manufacturing, logistics, customer service, receiving payment and so on. Anyone, anything, anywhere that influences a product's time-to-market, price, quality, information exchange, delivery, among other activities is part of the supply chain.

Manufacturing, distribution, sourcing of materials, invoicing and returns have all been significantly impacted by the increased integration of a global customer and supplier base. Many companies find their existing processes and technology not flexible enough for this new business environment and are working out ways to overcome this shortcoming of theirs. Also, in the current scenario, the kind percentage of output coming out from the service economy can largely determine whether a country is a developed country or a developing one. Developed countries often possess healthy and strong service industry. Cutting edge SCM business software, can act as a driver for many service operations.

A key trend affecting the World Supply Chain Management industry is the transition from local economies to a large scale global one. For enterprises, the effective management of supply chains across the globe becomes very critical, especially as the complexity of supply chains increases. Supply chain visibility is gaining ground nowadays and, as a result, the supply chain coordination segment is expected to witness steady growth in the near future. Additionally, this segment is expected to bring in more investments from the venture capital community.

The right Supply Chain Design is critical to managing the changes brought about by rapid globalization. A well thought-out Supply Chain Network Design can optimize the network and the flow of materials through the network. In doing so, network design captures the costs of the supply chain with a "total landed cost" perspective, and applies advanced mathematical technology to determine optimal answers to both strategic and tactical questions. Also, the advantages of achieving excellence in service supply chain management can be compelling. They include increased customer satisfaction and retention, product sales, and service contract revenue as well as higher margins.

A supply chain system consists of SCM business software, hardware to run the systems, planning, and execution of processes. The implementation of an efficient supply chain strategy has the ability to create a sustainable competitive advantage over a given company's competitors. The implementation of supply chain revolves around strategic planning, system analysis, supply chain implementation and supply chain coordination. Generally, SCM business software contains features that allow companies to manage inventory, plan production, track sales, handle payments, and see where their shipments are. All of this information also can be used to communicate with other partners. The core of SCM business software is inventory or demand forecast developed from the inventory management practice.

The service supply chain is more complex today than it has ever been. With rapid growth in new products; shorter product lifecycles and global expansion are driving operating costs and service parts inventories higher than ever. Despite these obstacles, there are companies who are achieving higher customer service levels at lower operating costs while increasing both their revenue and their profitability with the help of highly responsive service supplies chains that sense and respond to real-time supply and demand conditions.

For a large retailer like Wal-Mart, which has many regional distribution centers, SCM business software, will enable them to effectively coordinate between suppliers of clothes, paper products and Wal-Mart's retail stores to reduce the inventory cost. Wal-Mart is able to pass the saving of inventory cost to customers so it can offer lower prices for many everyday products.

An efficient and responsive supply chain also helps to maximize the overall value generated. The value a supply chain generates is the difference between what the final product is worth to the customer and the effort the supply chain expends in filling the customer's demand. It is strongly correlated with the supply-chain profitability, the difference between the revenue generated from the customer and the overall costs across the supply chain. Therefore, in a nutshell, SCM looks to achieve a 'strategic fit' between a company's competitive strategy and supply-chain strategy and invariably acts like a backbone for the service economy of a country.

About the Author

Author is a Marketing Executive with an Offshore Software Development Service provider located in India. The company deals in offshore software development and offshore outsourcing. For more detailed information about the company and its services visit : www.otssolutions.com