What Is a Supply Chain? Essay Example

Business management can become quite overwhelming considering the vast amounts of data, transactions, and communications involved throughout every aspect of the field. This is why information technology plays such a significant role in business management, because information technology or (IT) makes it easier to process such large amounts of information much more quickly. The IT system of enterprise resource planning or (ERP) is a type of business management computer application that does just that; organizes, classifies, and relays this information between other computers as well as users. This ERP system is integrated to many business IT applications and applies significantly to human resources. (Beal, 2015)

In order for a business to grow however, their IT management cannot rely solely on the ERP system alone. Most successful businesses are greatly involved with consumer relations because business must generate sales revenue from a product or service in order to grow and this comes from their customers or investors. Also, if a business is in the line of selling a product, then they must maintain accurate documentation in their operations of inventory. The final product to be sold goes through a long process of what is known as a supply chain, where the finished product is attributed back to the raw materials it started from. (Beal, 2015)

This is where a customer relationships management or (CRM) system would come into play. A CRM system is an IT computer application that allows a business to effectively communicate with their customers in regards to customer services as well as sales transactions. The CRM system needs to work in conjunction within the ERP system of planning in order for the business operations to be executed both continuously and adequately. Failure to establish an adequate CRM system may lead to customer demands not being met due to a lack of communications efforts or methods. (Beal, 2015)

Every type of business has some form of inventory. Inventory is a non-liquid asset which is usually used in sales for the turnover of revenue. Examples of inventory may be food items in a grocery store, computers for sale in a tech store, or automobiles being sold by a car dealer. These inventories however, are finished goods. They came from a work-in-process, which started out as raw materials from a manufacturer. Sony may have manufactured many laptop computers, but they are shipped to a retailer to sell to the general consumers. Not all inventories are intended for sales revenue though. Businesses may keep inventory of general office equipment used by their employees. Not all inventories are physical either. Customers may be considered inventory while they are waiting in line at a retail store as they represent a sale. There is also virtual or information inventory. A writer may have many enterprise writings on their computer waiting to be published; such documents may be considered information inventory. This is why it is important for any business to integrate a supply chain management or (SCM) system within their ERP system. (Sunil Chopra, 2004)

Both the CRM and the SCM systems are strongly integrated into any business’s ERP system and this is what makes them successful. In regards to the digital delivery of assets or products, ERP fits into these types of businesses because it is still a kind of service that is being provided. CRM systems are still required to keep up with customer demands from Netflix and Hulu while SCM systems keep track of the CDs being distributed by Red Box. So, ERP plays a role in all forms of digital delivery in business.

References

Beal, V. (2015). ERP – enterprise resource planning. Retrieved from WeboPedia: http://www.webopedia.com/TERM/E/ERP.html

Sunil Chopra, P. M. (2004). What is a Supply Chain? . Retrieved March 28, 2015, from http://www.sbaer.uca.edu/publications/supply_chain_management/pdf/01.pdf