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Essay on effect of supply chain management
Importance of supply chain management to an organisation
Importance of supply chain management to an organisation
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2.5.4. Supplier development: The third approach to achieve supply chain effectiveness is to develop collaborative relationships with suppliers. To clarify, Supplier development programs can remarkably help lessen risk and enhance efficiency and plays an important role in promoting performance improvement and contribute strategically to the overall organizational effectiveness. Supplier development enables companies to better apply their resources, enhance the value added, and allows manufacturing firms to be more effective in facing changing needs. Therefore, outsourcing allows firms to exploit the capabilities and utilize supplier technology to shorter product development and manufacturing cycle time in enhancing supply chain efficiency (Kurniawan et al., …show more content…
Risks in supply chain: Risk management controls activities to decrease vulnerability. To explain, supply chains are vulnerable to risks arising from coordinating problems in supply and demand (Kleindorfer and Saad, 2005). Handfield and McCormack (2007) defined operational, network, and external factors as categories of supply chain risks. Operational risk is determined as the risk of loss originating from insufficient or failed internal processes, people, or systems. To illustrate, quality, delivery, and service problems are instances of operational risks. Network risk is determined as risk originated from the structure of the supplier network, such as ownership, individual supplier strategies, and supply network contracts. External risk is determined as an event driven by external forces such as earthquakes, weather, regulatory, political, and market forces. Uncertainty is another risk that enhances costs due to overreactions throughout the supply chain (Childerhouse et al., 2003). Risk management culture positively moderates the effects of (a) supply chain visibility (b) supply chain flexibility, (c) supplier development, and (d) inventory control on supply chain effectiveness (Kurniawan et al.,
Risk can be defined as “potential disturbances with their negative consequences”. Sharma & Bhat (2011). The objective of this assignment is to examine Mattel’s Toy recalls. In doing so a risk assessment of Mattel’s supply chain practises before the recall will be formed, the actions taken by all parties involved in the production of those toys that were recalled will be examined, the recalls impact on Mattel will be examined, the transparency and accountability of global supply chains will be identified, and Mattel’s current supply chain will be assessed to identify whether they now effectively managing risk.
Amazon Supplier Relationships Subject it to a Number of Risks. We have significant suppliers, including licensors, and in some cases, limited or single-sources of supply, that are important to our sourcing, services, manufacturing, and any related on-going servicing of merchandise and content. We do not have long-term arrangements with most of our suppliers to guarantee availability of merchandise, content, components, or services, particular payment terms, or the extension of credit limits. If our current suppliers were to stop selling or licensing merchandise, content, components, or services to us on acceptable terms, or delay delivery, including as a result of one or more supplier bankruptcies due to poor economic conditions, as a result
Kersten, W., & Bemeleit, B. (2006). Managing risks in supply chains: How to build reliable collaboration in logistics. Berlin: Erich Schmidt.
Supplier evaluation is a term used in business and refers to the process of evaluating and approving potential suppliers by quantitative assessment. The purpose of supplier evaluation is to ensure a portfolio of best in class suppliers is available for use. There are several techniques are used by companies to evaluate suppliers and measure performance. The first step in implementing any of the techniques being discussed is to determine the attributes that should be considered. A firm should focus on the attributes that it finds most important. Some attributes are easy to measure while others are not. Some models are proficient in considering total costs, but they are usually very difficult to implement and time consuming. Thus, the resources
Supply chain management has been defined as that process that involves the management of information, materials, and all the finances that are handled within and across the entire supply chain process (Christopher, 2016). The management is usually done through out the entire supply chain management from that moment when the suppliers are involved through all the manufacturing activities, different distribution activities, and the way that the products are served to the final product consumer (Turban, et al., 2002). The process also includes all the activities that different organizations offers to their customers as after sale services for purposes perfecting their services and products towards their highly valued customers (Christopher,
This chapter details the information regarding sourcing process. The detailed information about sourcing process, different types of souring methods and the factors affecting sourcing also discussed. Along with this information, the vendor management and evaluation methods also described for the better understanding of the sourcing process.
Working collaboratively and cross-functional members of the supply chain Sourcing sets out to achieve alignment with the goals of the SC
As pointed by Parsons A.L (2002), there was increasing dependent on the relationship and customers is demanding to receive high standard of products and services for them to sustain the business in the intense manufacturing environment. Besides, Xu et al. (2008) has highlighted that supplier is developing a long-term relationship with their crucial suppliers to increase the competitiveness and to establish an effective and efficient supply chain. Trend (2005) also mentioned that work closely in partnership with suppliers is the only way to survive in today’s competitive business environment.
Industries in the new era tend to concentrate on linking with other corporations on a geographic level, to bring in all their forces together to create a highly technical & cost effective collaboration. This collaboration also involves joining forces with the suppliers across the product development cycle for easy access & faster processing of the products. This also ensures quick access to markets, lower product cost & better quality. Attaining successful suppliers results in success of the company & enhances its overall performance. It isn’t easy for a company to recognize if the suppliers they choose are capable of supporting their new product development or hinder their growth & effect the company’s performance. Companies need
The stakes are very high in strategic sourcing; it is one of the most benign sources of shareholder value that has been traditionally been overlooked by a more typical view of a purchasing function. The vast majority of companies, particularly manufacturing companies in the United States have an enormous opportunity to incorporate strategic sourcing into the corporate business practices, sadly this is currently untapped. Those procurement office officials that put in place strategic alliances and/or partnerships that yield best practices and improve supply chain processes can reasonably expect a 3 – 5 percent net savings on commodities and services purchased while concurrently doubling the company’s bottom line.
The key performance drivers of Supply Chain Management (SCM) are - facility effectiveness, inventory effectiveness, transportation effectiveness, information effectiveness, sourcing effectiveness, pricing effectiveness, delivery effectiveness, quality effectiveness and service effectiveness. These drivers include various performance markers that may be measured quantitatively by gathering information and applying them in SPSS. The works here may principally be quantitative with spellbinding measurable investigation. In the current world, practical supply chain management to help the triple primary concern, (nature, domain, and economy) is likewise included in the extent of supply chain performance drivers. This is relatively a quite new research region.
A supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products to customers through a distribution system [1]. The basic objective of supply chain is to “optimize performance of the chain to add as much value as possible for the least cost possible.
(2014) deduced that procurement performance can be assessed by focusing ondelivery,flexibility, quality, cost and technology. Optimal performance attainment is dependent onhow current suppliers`relationships aremanaged so asto ensure constant availability of needed quality supplies at the organization. This will ensure that sourced materials are indeed procured at the right costand atthe right time. Procurement performancestrives toenable improvements in the procurement process at the organizationso as to improve on qualitydelivery of firm products and servicesatleast possible time and
19. Sodhi, Sunil Chopra and ManMohan S. Managing Risk to Avoid Supply Chain Breakdown. MITSloan Management Review. [Online] October 15, 2004. [Cited: February 25, 2010.] http://sloanreview.mit.edu/the-magazine/articles/2004/fall/46109/managing-risk-to-avoid-supplychain-breakdown/.
Strategic management is the “identification of one or more sustainable competitive advantages a firm has in the markets it serves (or intends to serve), and allocation of resources to exploit them” (Business Dictionary, 2016). In order for industries and organizations to thrive, they must have strategies in place and strategic management processes to stay competitive, profitable, attractive to stakeholders, and to sustain advantages that set them apart from other competitors (Barney & Hesterly, 2015). The strategic management process involves a set of procedures that lead to choosing a strategy that will eventually lead to competitive advantage (Barney & Hesterly, 2015). The six steps of the strategic management process involves defining