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CHAPTER 1
PRINCIPLES OF SUPPLY CHAIN AND PROCUREMENT MANAGEMENT
payments and banking, business transaction processing, and on-line information
services. An information infrastructure also fosters electronic access to external
environment data on market opportunities, external firms, customers, market
research, global finance and economics. In addition, an information infrastructure
supports the exchange of operational data relating to design, marketing, finance,
manufacturing, distribution and legal issues. Furthermore, an information
infrastructure supports the collaboration of supply chain partners in areas such
as the timeous sharing of demand information, inventory statuses, daily capacity
usage requirements, evolving marketing plans, product and process design
changes and logistics requirements.
1.3.4 INTEGRATE BUSINESS PROCESSES
An information infrastructure allows business processes and systems to be
integrated, making collaboration between supply chain partners easier. The
integration of business processes is the most vital aspect and the pivot on
which the success of the whole supply chain operation rests. It requires real-
time information sharing and planning among the partners across the supply
chain. Business processes must therefore be established both intra- and inter-
organisationally to support the supply chain’s strategic objectives.
These processes, coupled with the information infrastructure, support the
efficient flow of material along the supply chain. Great emphasis has been
placed on understanding business processes within organisations, but it is also
essential to understand what processes must be built inter-organisationally
to leverage and enhance partners’ capabilities. These inter-organisational
processes must be designed to take advantage of the information that drives
daily supply chain decisions.
1.3.5 UNITE DECISION SUPPORT SYSTEMS
An information infrastructure and access to the Internet drive software
development and underpin process support, electronic data interchange,
decision support, database support, etc. Software specialists have designed
and built Decision Support System (DSS) environments that optimise supply
chains [15]. They therefore have a substantial impact on operating behaviour
and, consequently, on overall supply chain performance. How much they
enhance this performance depends on the accuracy of the data that is put into
the system and the modelling approaches employed.
1.3.6 DEVELOP STRATEGIC ALLIANCES AND MANAGE RELATIONSHIPS
Over the past two decades, strategic alliances and relationship management
have become increasingly important ways of improving a firm’s competitiveness
within the supply chain environment. For instance, forming strategic alliances
with suppliers and customers allows manufacturers to focus on the core activities
of providing quality products and services [16]. Besides, closer buyer-supplier
relationships offer numerous technical, financial and strategic advantages [17].