An Investigation into the Best Current Practice of Supply Chain Management

An Investigation into the Best Current Practice of Supply Chain Management

This report documents an investigation into best current practice of

Supply Chain Management. Various methods of materials procurement are

outlined in addition to their relevance to examples in modern

industry. The report discusses the ideal characteristics of a

successful supply chain. From a traditional perspective, this has

proven to be based around the development of strong inter-firm

relationships among the participating organisations that make up the

supply chain. Additionally, a detailed strategy of materials

management is proposed for a manufacturer of earth moving equipment;

JCB, and a digital camera manufacturer; Sony.

Management Practice Supply Chain Management

Materials procurement from the 60s to the 90s

Although developed prior to this period, Henry Ford introduced a

strong foundation for businesses of the 1960s with Vertical

Integration. Ford attempted to control all of the operations in his

business by buying other companies in the distribution channel. The

Ford Motor Company owned the suppliers up the channel in backward

integration and down the channel in forward integration, thereby

gaining total control of all stages of the process from raw material

extraction to finished car showrooms. Organisations of the 1960s

maintained this Vertical Integration structure, in addition to

somewhat adversarial inter-firm relationships that were a prevalent

characteristic among 1960s businesses. Buyers and sellers typically

operated at arm's-length, independent relationships, competing for

resources rather than collaborating. The primary benefits associated

with the arm's length philosophy were concerned with cost

effectiveness when managing external sources. This arm's length

approach to merchant and customer relations was balanced with the

vertically integrated structure, as primary functions of the

organisation were mostly under the firm's control. Before long, this

vertically integrated organisational structure began to flatten, which

gave rise to the supply chain organisation. Many organisations began

to sell their units acquired by vertical integration and chose to

partner with other companies that provided these services.

Consequently, the concept of supply chain management developed, as

organisations were attempting to achieve ...

... middle of paper ...

...o a lack of motivation of the

organisation in ensuring the success of the relationship with the

supplier. It is anticipated that this work has demonstrated the

importance of the role of the supply chain manager in establishing

strong relationships with suppliers.

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Online

JCB Groupn http://www.jcb.com

Sony Corporation http://www.sony.com

Duxbury. (2004), What is Supply Chain Management?, [Online].

Available:

http://www.duxbury.com/statistics_d/templates/student_resources/0534373631_shapiro/introduction/introduction.html

[2004, November 21].

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