Ifluence of Communication:

According to Yankee Group site, "leading companies operate along with supply chain costs 36% lower than the average company - resulting in a nearly 4% savings to the bottom line". The IBM site says, "according to recent study, companies that practice best-in-class supply-chain-management techniques obtain a 40 to 65% advantage in cash-to-cash cycle time, and a 7% cost advantage over average companies. Typically they all hold 50 to 80% less inventory than their competitors.

• SC is an integrated system. This is not like an interfaced system as normally seen in conventional enterprise.
• SCM is a targeted at and directed towards the end-supply to the customer. This is a domain of strategic decision making rather than operational decision in conventional enterprise. All of the elements of the chain share a common platform and have common objective of total reduction in cost, Increase in market share, customer satisfaction, etc.
• SC negates the fragmented responsibility of each functional unit such like suppliers, manufacturing, and distribution, purchasing and sales. It has been observed that the effectiveness of any element of the supply-chain is very much affected by the performance of the total chain.
• Inventory is nearly linked with information or data-flow in the chain.
• Integration of enterprise through networking and common information- access facilitates prudent decision about inventory management, purchasing logistics, purchasing, and supply and customer service.
• Enterprise, these days, gets more involved in the operation and policies of its suppliers. Vendor audit, vendor development/training, open costing, on-line monitoring of scheduling and delivery of vendors, sharing technological capabilities, providing services of quality team to vendors/suppliers, etc., are few measures which cannot be cost-effective in short run. But, in long run, this union is bound to prove beneficial, cost-effective and reliable.
• Many suppliers to a common unit (say, manufacturing) can collaborate in the logistic arrangements for deriving the benefits of economy of scale. Subcontracting among themselves can also be beneficial in many instances. Though, all is effectively well with mutual trust, only while there exists a common enterprise-wide integration of information along the supply-chains.
• Supplier is connected with the inputs from the end-user regarding specifications, timing and quality. Integration facilitates quick response time. Secondly, their interaction improves cost reduction effort through value engineering technique. Supplier input is upgraded through better manufacturability of supplied items, rapid response time and better preparedness.
• The era of multi-supplier-enterprise network is slowly phasing out. The new paradigm is "dependable, mutually-developed, partner-type, single sourcing". The potential advantages in single sourcing are more evident while integration, data-sharing, technology transfer and vendor development effort are accounted.
• Visibility of complete supply-chain provides executives the ability to see problems before they arise.

The market is competitive. Thus, the supply chain is expected to operate faster. The operative distance among each link (which is different from physical distance) is shortening in most of the cases. This is because of increasing influence of communication and simulation technologies.