The document discusses virtual supply chains. A virtual supply chain coordinates other companies to do design, production, and distribution without owning physical assets or employees. Dell is used as a case study of a virtual organization that linked suppliers and customers through information sharing over the Internet. This allowed Dell to reduce costs and enhance customer relationships. The conclusion states that virtual supply chains networking all parties through collaboration are inevitable to increase profits and reduce costs in today's digital economy.

1. VIRTUAL SUPPLY CHAIN
BARATH KUMAR B, KAMESHWARI KOWMUDI

2. SUPPLY CHAIN - INTRODUCTION
• A supply chain is a system of organizations, people,
activities, information, and resources involved in
moving
a product or service from supplier to customer.
• Supply chain activities involve the transformation
of natural resources, raw materials, and components
into a finished product that is delivered to the end
customer

3. VIRTUAL ORGANIZATION
• Imagine a virtual organization, one that doesn't exist in a physical sense, but functions nonetheless.
• In this instance, an organization may be an umbrella for several outsourcing operations, but not
necessarily a physical entity.
• There may be figureheads and individuals facilitating all of the third-party relationships, but all core
processes, whether manufacturing, service, administrative, or operational, are performed outside the
"virtual" organization.

4. VIRTUAL INTEGRATION
• In virtual integration the links of the value chain are brought together by informal arrangements among
suppliers and customers.
• Shipments of the components that your firm needs can be easily arranged through the Internet or a
networked computer system.
• The same type of arrangement allows you to fully serve your customers in ordering, services, or any
other needs.
• The vision for many manufacturers is to become virtual companies, owning only the brand and the
customer. The design, system development, product sourcing, logistics, and even final assembly can all
be outsourced to supply chain partners.

5. VIRTUAL SUPPLY CHAIN
• A virtual corporation produces a product or service without employees or buildings. It exists to co-
ordinate other companies that do the design, production and distribution work.
• Virtual supply chain operates in changing business environment. The virtual supply chain often focuses
on the solution to concrete tasks and projects. After solving the task and completing the project, virtual
supply chain is dissolved and new one is formed with new combinations of partners.

8. CASE STUDY
• Case in Point Dell Inc.
• When Dell Inc. first began using the Internet to expand their business, the
company had three basic objectives:
• To make it easier to do business with Dell, To reduce the cost of doing
business with Dell, and
• To enhance their customer relationships.
• Starting in 1996, by 1999 Dell was selling more than $35 million per day over
the Internet.

9. CONT..
• "But for Dell, online commerce was only the beginning," writes Michael Dell, the Founder & CEO of Dell
Computer Corporation . “ Because we viewed the Internet as a central part of our IT strategy, we started
to view the ownership of information differently, too.
• Rather than closely guarding our information databases, which took us years to develop, we used
Internet browsers to essentially give that same information to our customers and suppliers – bringing
them literally inside our business. This became the key to what I call a virtually integrated organization –
an organization linked not by physical assets, but by information.
• By using the Internet to speed information from between companies, essentially eliminating inter-
company boundaries, it would be possible to achieve precision and speed-to-market for products and
services in ways not dreamed possible before. It would be the ultimate business system for a digital
economy."

10. CONCLUSION
• The Internet, as a means of virtual organizing, has become a central part of a commercial drive towards
systemic innovation and the re- evaluation by many of value creation. A major shift in the
communications between business organisations is taking place, which is actually redefining
organisations and commercial transactions. The Internet has become a key element in molding and
propelling business into new directions in the traditional marketplace and emerging marketspace.
• Finally, a virtual supply chain that networks all parties together is something that is inevitable in order
to increase profitability and reduce costs. Collaboration amongst different parties is necessary in the
virtual world as this is the only way in which businesses can thrive. Failure to adopt new and better
management strategies will only be detrimental to the business as competitors take over and are able
to do a much better job than you. In fact, these practices will be more of the norm in the near future.