Page 4: Rationalising the supply chain
Microsoft was one of the first companies to appreciate the significant benefits to be gained by using e-commerce to make core business applications more efficient. In particular, the Internet can increase the speed and accuracy of communications with suppliers, distributors, retailers and other commercial partners. E-commerce makes it possible for organisations to link their systems together into an electronic chain, allowing information to be accessed much quicker, more accurately and enabling significant cost reductions.
Microsoft launched a ‘Value Chain Initiative’ (VCI) to dramatically improve the efficiency of the supply chain, from the raw materials right through to the point of sale. More than a hundred software vendors and Microsoft’s ‘partners’ are dedicated to achieving the VCI goal.
Electronic supply chains offer business benefits in several ways:
- Greater speed, accuracy and reliability
- Decreasing the cost of transactions and making the system accessible to all sizes of firm
- Simplification of the data shared by the participants in the supply chain
- Integration of the operations of customers, suppliers and other business partners.
An example of supply chain communications is the leading tile manufacturer, H&R Johnson. Working with the Microsoft e-commerce partner, ABS, the company has developed an online supply chain system, linking suppliers right through to distributors. This system has enabled H&R to streamline its stock control and order processing, dramatically improving efficiency.